Our Feb/Mar issue covers industry issues that matter. Plus, we visit Pearson’s deicing facility. More inside!
Prime Minister Justin Trudeau said Sept. 18 that while his government remains interested in buying 18 Boeing F/A-18 Super Hornets as a stopgap in its plan to acquire a fleet of new fighters, he’s not prepared to do business with Boeing as long as the U.S. giant continues an anti-dumping action against Montreal-based Bombardier.
Boeing has accused Bombardier of discounting its C Series passenger jets to Delta Air Lines, which placed a firm order last year for 75 of the smaller CS100 and optioned 50 more, some of which could be the larger CS300. The deal was reported to be worth US$5.6 billion.
Carriers typically pay below list, and early customers – Delta was the first U.S. operator to order the C Series – generally get good deals when any major original equipment manufacturer (OEM) is trying to penetrate new markets.
Even though all OEMs discount early adopters, Boeing insists that the Canadian and Quebec governments are subsidizing Bombardier through loans and equity positions. The U.S. Commerce Department is understood to be days away from releasing preliminary findings which could result in Bombardier being fined or facing high import tariffs.
In a statement released earlier in the day, Boeing repeated its accusation that Bombardier was involved in a “classic case of dumping” by discounting the C Series “at absurdly low prices” when it had “sold poorly” internationally.
“No one is saying Bombardier cannot sell its aircraft anywhere in the world,” Boeing added. “But sales must be according to globally accepted trade law, not violating those rules seeking to boost flatlining business artificially.”
Trudeau fired his verbal broadside during a joint news conference with his British counterpart, Theresa May, who is concerned about fallout at Bombardier’s large facility in Belfast, Northern Ireland.
“We won’t do business with a company that is busy trying to sue us and put our aerospace workers out of business,” Trudeau said, adding later in French that a successful trade action could eliminate “tens of thousands of jobs.”
He also called into question the prospect of the plan to buy 18 interim Super Hornets. “We have obviously been looking at (them) as a potential significant procurement” but Boeing “should not expect us to buy planes if they are attacking our industry.”
May said she has not only made her feelings clear in a phone call with U.S. President Donald Trump, but would reiterate her government’s case when they meet Sept. 23 in Washington. “I will be impressing upon him the importance of Bombardier to the United Kingdom, and particularly, obviously, to jobs in Northern Ireland.”
Bombardier president Alain Bellemare was one of several Canadian business leaders who participated in a roundtable meeting with May organized by the U.K. High Commission, but it was unclear whether the Bombardier issue had been specifically discussed.
Trudeau’s assertion that Boeing “is busy trying to sue us” was strongly rebuffed by the U.S. giant the following day, Sept. 19.
“Boeing is not suing Canada,” it said in a statement. “This is a commercial dispute with Bombardier, which has sold its C Series airplane in the United States at absurdly low prices, in violation of U.S. and global trade laws.
“Bombardier has sold airplanes in the U.S. for millions of dollars less than it has sold them in Canada, and millions of dollars less than it costs Bombardier to build them. This is a classic case of dumping, made possible by a major injection of public funds.”
Bombardier fired back immediately with a statement of its own, saying that it shared Boeing’s stated commitment to a “level playing field.” However, it added, “in this case, they were not even on the field.”
The core of the dispute is Delta Air Lines’ decision last year to purchase 75 of the smaller CS100 and option 50 more of the wide-body single-aisle platforms. “Delta ordered the C Series because Boeing stopped making an aircraft of the size Delta needed years ago,” Bombardier added. “It is pure hypocrisy for Boeing to say that the C Series launch pricing is a ‘violation of global trade law’ when Boeing does the same for its new aircraft. . . .
“The U.S. government should reject Boeing’s attempt to tilt the playing field in its favor and impose an indirect tax on the U.S. flying public through unjustified import tariffs.”
Conservative MP James Bezan, the Official Opposition’s shadow minister for defence in the House of Commons, said the rhetoric “needs to be toned down” because it had “gotten out of control” on both sides. He said the U.S. Trade Office decision could result in Canada filing challenges through the North American Free Trade Agreement and possibly through the World Trade Organization. WTO decisions on other disputes in the past have generally been ignored by Washington when they went against U.S. interests.
Bezan also told reporters on Parliament Hill that the PM’s latest words on the Super Hornets showed that last year’s decision to buy “interim” fighters was “ill-informed and irrational . . . from the start.”
Bezan urged the government to “get back to the basics” in buying replacements for the legacy CF-188 Hornets “as fast as possible” because that would be “in the best interest of taxpayers and . . . the pilots who fly our fighter jets.”
He also said the rhetoric that’s been going on between Boeing and the government of Canada has not been helpful to the fighter program.
“We want to get to a competition now. That’s the only way we get the right plane for the Royal Canadian Air Force and what’s in the best interests of Canada and our allies.
“Almost all of our allies have been able to do competitions in under 12 months, and with all the information that’s already been collected by the previous government, by this government and their surveys of fighter jet manufacturers, they know exactly what the capabilities are that are out there, and the way forward and how we replace the entire fleet and make sure that we have enough fighter jets to do the job that Canada is expected to do.”