220% duty imposed on U.S. bound Bombarier C Series Jets

[BlueChinchillaEatingDorito]

I haven't been a fan of Boeing ever since their merger with McDonnell Douglas, and this just adds to that. 

Quote

The U.S. Department of Commerce has clobbered aerospace giant Bombardier with a hefty 220 per cent countervailing duty on the sale of its CS100 commercial jets to a U.S. airline following a trade complaint from an American rival.

It's pretty ironic that Boeing is continuously complaining of rivals benefitting from Government subsidies while themselves rely on tax breaks and incentives from multiple levels of Government. Not to mention that is about a plane that Boeing doesn't have a aircraft that would compete against the segment the C Series is in. The CS100 is a regional jet that seats roughly 100 passengers. Boeing smallest jet in their lineup is the 737 which seats at least 150.

 

What's your take on this?

 

Source: http://www.cbc.ca/news/business/bombardier-cseries-duty-1.4308590

 

[SansVarnic]

- Merged Topics -

[BlueChinchillaEatingDorito]

12 minutes ago, SansVarnic said:

- Merged Topics -

I searched and didn't find anything... ugh... this search function.

[BlueChinchillaEatingDorito]

12 hours ago, Blind Krill 796 said:

This whole thing originated because Bombardier was getting absurd subsidies to the point where they could sell aircraft below cost.  Of course that is going to create an unfair advantage for them and Boeing has the right to contest that.  Plus, the pending sale was worth like 5 billion which isn't pocket change.  This is fairly normal in the aerospace and aviation industry.   Regardless, Delta has not withdrawn the sale and all this does is reduce the profit margin the company will make on the aircraft or will increase the cost to Delta.

 

As to the F-18, a similar aircraft from another manufacturer doesn't really exist.  It outperforms just about everything with the exception of possibly the Sukhoi S-35 (Russian made) which the Canadians would have a fun time buying.

The same thing happened when Boeing launched its 787 Dreamliner and no one batted an eye.

[BlueChinchillaEatingDorito]

11 hours ago, Captain Chaos said:

How is this TECH news? 

Are you implying just because it's aviation, it isn't technology? How is this different than the whole AMD's RX Vega pricing debacle? 

[CrazyRed98]

Disclaimer: These are my own opinions and don't represent these two companies spoken of.

 

As most cases it is never as simple as it seems. First the prices that Delta paid for the C-Series was never released to the public. As for government subsidies... this is a fact across all industries but may be termed/called differently so that people don't have to say "government subsidies" . The claim Boeing made was that Bombardier sold its C-Series to Delta at below actual cost (manufacturing cost), hence "dumping". Many companies have sold their products at below cost to increase market share. So the company takes a hit cash flow wise by taking on losses, but in return can gain market share in a new market/region. In normal situations this isn't a problem. It becomes a problem when someone believes that you're not taking on losses because you're covered by all this "extra government money".

 

So did Bombardier dump the planes? I don't know. It all depends on the sale price as compared to actual plane cost, but that hasn't been released to the public. I think Boeing might know something because they have left $5billion on the table with the F-18 contract, and loosing Canada's support with Boeing Canada and Boeing's suppliers in Canada.

 

One of the reasons Boeing may be pushing hard on this is because they don't want to be burned like they were with Airbus entering the U.S. market. As a side note Boeing is 1 of 12% of Fortune 500 companies that still exist from 1955 to 2017. The rest have either gone bankrupt, merged with another firm, or they still exist but have fallen from the top Fortune 500 companies. So this is Boeing trying to do its best to continue surviving.

 

I feel the biggest winner is Airbus since they've taken majority stake on the C-Series. This purchase by Airbus will hurt Canada the most. The reason is that Canada's government and Bombardier have done all the R&D and work to create a new plane series, so they saved Airbus hundreds of millions on all this design work, etc. Also Canada will lose because Airbus is going to open a second C-Series line in Alabama, USA. Which they will use as their final assembly line so that they can get away from duty taxes. So Canada loses employment opportunities to the U.S.

 

For those that say that Boeing always gets helped by the U.S. government I will say they don't know Boeing's history. The U.S. created new anti-trust laws in the U.S. in the 1930s. This was done to break up the Boeing Company. The companies that were created thereafter are companies that have large presences in Canada and the world as well. The companies that came from the Boeing company are Pratt & Whitney, United Technologies Corporation (UTC), and United Airlines. Surprising right? Boeing when it was first created wanted to provide every aspect of the aviation industry, hence make the engine, all parts, airplanes, and a airliner using its planes. The founder of Boeing teamed up Frederick Rentschler (created the original P&W name/company) to make "United Aircraft and Transport Corporation", which was owned by Boeing.

 

Those are my long two cents...




 

[Tataffe]

U.S. ITC rejects Boeing injury claims on Bombardier

Quote

The U.S. International Trade Commission voted 4-0 to reject Boeing’s claims that it suffered injury in the case, and discarded a Commerce Department recommendation to slap a near 300 percent duty on sales of the 110-to-130-seat CSeries jets for five years.

...

On 27.9.2017 at 3:56 PM, Tataffe said:

I'm certain that the final word has long not been said in this conflict. Expect those 220 % to not become a real thing.

Told you

 

https://uk.reuters.com/article/uk-usa-itc-ruling/u-s-itc-rejects-boeing-injury-claims-on-bombardier-idUKKBN1FF2MF

[Mug]

The argument is fair, if the Canadian and Northern Irish governments are subsidising the production of aeroplanes and the US government isn't then it's not fair on Boeing, end of. Government subsidy in China is the reason steelworks in the west are going bust, why should government subsidy in the west be treated any differently by the west?

 

The level of the tariffs are something I'd contest, is 220% really the true disadvantage that Boeing faces by a mild government subsidy?

 

I don't think it's an attack on technology, it's an attack on free trade. It really depends on whether you're a 'the freer the market the freer the people' person.

 

On 9/27/2017 at 1:41 PM, Blind Krill 796 said:

sell aircraft below cost.

Well, umm, that is the point of a subsidy.

 

Without subsidy there would be an awful lot less in the world. Every pound or dollar the government spends is effectively a subsidy towards something. Like if the government builds a new railway to a new container terminal, that's a subsidy for the container terminal, if the government agrees to give more poor people healthcare, that's a subsidy too. Indirect and direct subsidies are the way the world goes round. Just because this is a direct subsidy to Bombardier doesn't mean the US is any less guilty of it too (and should the same duties be imposed on them as well?). 

[dalekphalm]

19 hours ago, Mug said:

The argument is fair, if the Canadian and Northern Irish governments are subsidising the production of aeroplanes and the US government isn't then it's not fair on Boeing, end of. Government subsidy in China is the reason steelworks in the west are going bust, why should government subsidy in the west be treated any differently by the west?

 

The level of the tariffs are something I'd contest, is 220% really the true disadvantage that Boeing faces by a mild government subsidy?

 

I don't think it's an attack on technology, it's an attack on free trade. It really depends on whether you're a 'the freer the market the freer the people' person.

 

Well, umm, that is the point of a subsidy.

 

Without subsidy there would be an awful lot less in the world. Every pound or dollar the government spends is effectively a subsidy towards something. Like if the government builds a new railway to a new container terminal, that's a subsidy for the container terminal, if the government agrees to give more poor people healthcare, that's a subsidy too. Indirect and direct subsidies are the way the world goes round. Just because this is a direct subsidy to Bombardier doesn't mean the US is any less guilty of it too (and should the same duties be imposed on them as well?). 

Bombardier's argument is that Boeing is ALSO being government subsidized (as are pretty much all major Aircraft manufacturers).

 

Plus, Boeing is not being financially impacted. They have no direct competitor. They never tried to get the "sale" from Delta (because they didn't have a product to fill the need).

 

it's definitely not a simple problem.

[Arika]

Bombardier should just stick to bizjets and regionals, they have no place in the airliner/long haul market

[dalekphalm]

24 minutes ago, Sierra Fox said:

Bombardier should just stick to bizjets and regionals, they have no place in the airliner/long haul market

Why?

 

The CSeries jets are some of the most advanced commercial jets in the world, and also some of the most fuel efficient, and quiet.

 

They don't have a lot of experience in that market - true. And they definitely have made some mistakes and stumbles along the way. But they won't grow if they don't try.

[dalekphalm]

On 9/27/2017 at 9:14 AM, Blind Krill 796 said:

Rafale, Gripen, eurofighter typhoon.  The Typhoon was primarily designed with air superiority in mind and is still in its infancy with transitioning to a multi-role fighter (much more comparable to an F-22). Both the Gripen and Typhoon have no carrier capability.  The Rafale uses a single seat variation for carrier operations and has limited capability compared to the F-18. 

 

So really they could go with a Rafale, but it costs 16 million more per unit.  Is it worth it?

Canada does not operate any Aircraft Carriers, so that is not a major requirement. Sure, it's nice to have that capability, in case we want to hitch a ride with an American/UK/French Carrier, but that's definitely in the "nice to have" category, not "must have".

On 9/27/2017 at 9:39 AM, Sauron said:

-snip-

 

What? You can't see Bombardier? That's because it's irrelevant in the big picture (haha, puns). As it probably should be if the only reason it still exists is a massive save from the government.

Globally, yes, Bombardier is irrelevant. But not to Canada's economy. They're a huge source for employment in multiple provinces, including both Ontario and Quebec.

 

Personally I'm not particularly fond of some of their practices, but I also have no love for Boeing, so in this particular economic battle, I definitely favour the company that resides in my country.

[CDHoward]

After electing such a gross affront to human to decency and Turbo Cuck like Trudeau, nobody cares about Canada really my son

[Guest]

Sneak one in across the border.

[Misanthrope]

If there's anything worst than a 100% free market it's over-correcting, which in this case has been done twice: once by Canadian subsidies and another time by American import tax.