It was widely reported in the Canadian press last week that Bombardier’s hopes of breaking into the US commercial aviation market took a massive blow when the US Department of Commerce proposed a hefty 219% duty on its C-Series commercial jets.
The department ruled in a preliminary decision that Bombardier benefitted from improper government subsidies, which gave the Montreal-based company an unfair advantage when selling south of the border (
www.bombardier.com).
The investigation was sparked by a complaint from Boeing, after Bombardier secured a deal for up to 125 of its CS100s with Delta Air Lines in April 2016.
The list price for the planes is around $6 billion, but the actual amount of money involved in the deal has not been made public, and Boeing alleges that Bombardier offered them for much less.
The financial penalties are not officially due until Bombardier delivers the first CS100 to Delta, which is expected in the spring.
They could also still be dropped or refunded. The key will be whether the US International Trade Commissions finds that the Bombardier-Delta deal actually hurt Boeing’s business. This decision is not expected until the spring.
Meanwhile, unions are demanding urgent action to safeguard more than 4,000 jobs at Bombardier’s Belfast factories after the US Department of Commerce made its ruling, with Defence Secretary Sir Michael Fallon warning Boeing that its behaviour in a trade dispute with Bombardier “could jeopardise” its future defence contacts with the UK Government.
“Boeing is a major defence partner and one of the big winners of the latest defence review, so this is not the kind of behaviour we expect from a long-term partner.
“Boeing stands to gain a lot of British defence spending. We have contracts in place for new maritime patrol aircraft and for Apache attack helicopters; they will also be bidding for other defence work. This kind of behaviour clearly could jeopardise our future relationship with Boeing.”
Arlene Foster, the Democratic Unionist Party (DUP) leader, said: “What we must do now is to continue to work with our Government, with the American government and with the Canadian government in trying to get Boeing to see sense on this issue.
“This is a completely unjustifiable complaint, so we have to work with them to make them see that, and to work with the company as well. Obviously, we are very concerned about the jobs here in Belfast and elsewhere in Northern Ireland.”