Boeing will not stop Bombardier Trade Dispute

Boeing is beyond the point of no return in its price-dumping trade dispute against Bombardier, company representatives told reporters Dec. 15, and the results are expected to be finalized by Washington officials the week of Dec. 18.

That day, the U.S. Commerce Department is slated to issue its finding over allegedly improper subsidies made to Bombardier for C Series airliners sold to Delta Air Lines. Also Dec. 18, the International Trade Commission (ITC) will host a final hearing ahead of its vote on whether alleged C Series subsidies have caused material damage to Boeing.

But the Washington events came days after Canada formally launched its long-awaited fighter competition that imposes a new procurement hurdle targeted at Boeing due to the dispute against Bombardier. Ottawa also scrapped plans for an interim purchase of 18 new Boeing F/A-18E/F Super Hornets in retaliation for the pending 298 percent tariff on the Delta orders (Aerospace Daily, Dec. 12).

Despite fury from Canada and the UK, Boeing remains committed to the trade case. “We’ve not looked back or even tried to stop this proceeding,” a Boeing official said.

“This is not something that can be stopped,” another official said of the Commerce-ITC process. Even if it wanted to, the process has progressed beyond the threshold where Boeing could simply withdraw its petition or concur with a suspension under a larger deal.

Preliminary Commerce Department findings over alleged subsidies earlier this year led to a 219% tariff on the Delta orders, while 79 percent more would be applied to address so-called price dumping. The combined 298 percent tariffs would be final if ITC commissioners vote them on Jan. 26, 2018.

The briefing with reporters followed formal testimony Dec. 13 by Michael Arthur, president of Boeing Europe and managing director of Boeing UK and Ireland, in the UK House of Commons. All of it sounded designed to bolster Boeing’s litigation over the Delta deal and defend its reputation with closely allied governments.

“The U.S. process is not political, but legal and it is very simple,” Arthur told members of Parliament. “From Boeing’s perspective, Bombardier has sold aircraft in the U.S. at absurdly low prices, below the cost of production and below the price in other markets. It is a textbook case of dumping. It was done to seek a flagship sale in the U.S. to boost sales of an aircraft to which the market has not warmed.”

What is more, both Arthur and other officials in the background briefing stressed that Boeing does, indeed, compete with Bombardier in the 100-150-seat airliner market at the heart of the dispute. “Not even Bombardier can dispute that the CS300 competes directly with the 737-700 and 737 MAX 7, given the relatively small number of seats by which these models differ in most normal configurations,” Arthur said.

Officials in the briefing tried to keep discussion focused on the trade case and not speak to political concerns in Ottawa, London or Northern Ireland over the U.S. case. They also demurred when asked what the tariffs would be if Delta’s C Series aircraft were built in Mobile, Alabama, with a majority U.S. content, as Airbus and Bombardier executives have suggested will happen.

Boeing said it sees the 100-150-seat market as a $4 billion opportunity worldwide, including $1 billion in the U.S.

SOURCE: Boeing