Boeing files legal petition against Bombardier

Boeing has filed a petition in US courts accusing Bombardier of "dumping" jets. According to the petition, Bombardier is selling aircraft at $20M, which is far below the $33M cost to produce them. Specifically they are selling them at low prices in the US to build market share. They also pointed out the government subsidies they received to produce the aircraft, which is a direct competitor to the Boeing 737.

Bombardier issued a statement that they are in compliance with all laws where they sell aircraft, including the issues raised. They also pointed out how invested they are in the US economy. Brazil also recently opened a case against Bombardier in the WTO, over the government subsidies. This adds to a long term dispute between Embraer and Bombardier. Twenty years ago Canada launched a case in the WTO over government subsidies to Embraer. It was eventually ruled that both companies received improper subsidies.

Boeing has filed a legal petition in the United States accusing Bombardier of dumping Cseries aircraft, alleging that the Canadian firm has sold the jet at major loss to build market share.

The petition was filed with the U.S. Department of Commerce and the U.S. International Trade Commission, says Boeing in a statement.

“Bombardier has embarked on an aggressive campaign to sell CSeries aircraft into the U.S. market at absurdly low prices – less than $20 million for airplanes that cost $33 million to produce, based on publicly available information," says Boeing.

www.flightglobal.com...

a reply to: Zaphod58

At my job I have to deal with Bombardier and they are a sh#t company. They do indeed do these things, I have seen them do it first hand in the railroad industry.

Both the Federal government of Canada and the provincial government of Quebec support Bombardier. The company gets tax cuts, direct capital injection and a number of other tangible benefits.

Just two months ago, the federal government gave them a $372,000,000 "repayable contribution" specific to their aerospace division. While the total number given to Bombardier is shrouded in secrecy, the company has received well over $1.3 billion recently.

While government support for manufacturing jobs is a common theme across most countries, Bombardier is a black hole of government funds just to stay alive.

The people of Canada are probably more pissed off about this than Boeing is...

When I see bombardier I automatically think of snowmobiles. They used to make a pretty decent sled back in the days.

So, they are dumping planes cheap. Sounds like it is a good deal for some people who buy them.

a reply to: rickymouse

It's also a hell of a way to destroy your company. If they're $33M to build, and they're selling them for $20M, they won't stay around long, unless the Canadian government pumps a hell of a lot more than $1.5B into them.

originally posted by: Zaphod58
a reply to: rickymouse

It's also a hell of a way to destroy your company. If they're $33M to build, and they're selling them for $20M, they won't stay around long, unless the Canadian government pumps a hell of a lot more than $1.5B into them.

Maybe they have a much better designed product coming out and they want to get rid of the old ones. Maybe the money from the government is part of the needed upgrade and changes money they need to redo their technology?

I don't know, but I do know that these big companies make a lot of money. I would guess that the thirty three million pricetag includes debt reduction, and profits built into cost. When a company says it costs so much to produce something, there is a lot more to it than direct costs. It can double the price adding all this stuff on.

It is a bookkeeping practice.

a reply to: Zaphod58

The Feds and the Province show no signs of wanting to stop supporting "these important high paying manufacturing jobs", much to the chagrin of the rest of Canadian taxpayers who don't work for the company. Their rail division is in worse financial shape than the aerospace division and still gets buckets of taxpayer cash dumped on it's balance sheet.

a reply to: rickymouse

The C-100/300 are brand new. Swiss Air began taking delivery just last year.

I think what might have really ticked off Boeing is the big order Delta made for 75 C-100 jets recently.

a reply to: Leonidas

What's amusing is that several people in Canada have said this is because of Trump, and Boeing could risk their F-18 sale to the RCAF by filing it.

What's true is that it's going to hurt sales. Airlines are going to back off in a hurry until they have an idea of what is going to happen.

www.cbc.ca...

a reply to: Zaphod58

There is considerable talk that the Delta deal is bogus and was designed to prop-up Bombardier to make them look more successful and help secure the $372 million loan. The thinking is that the order for 75 jets is laughable and will never be that big. The next biggest customer is SwissAir (Lufthansa) at around 30.

(The replacement deal for the RCAF F/A-18's is a whole other bucket of crud...don't get me started. I am sure you know the history of that cluster*)

a reply to: Leonidas

Yeah, I've been one of the loudest critics of it on here. What a farce.

Yeah, the Delta deal is kind of suspicious. They're talking about a 65-70% discount, off list. That WOULD bring it down to slightly over $21M per aircraft.

a reply to: Zaphod58


A little background on Bombardier might be in order.

This site shows the U.S. locations, jobs and employment provided by Bombardier in the U.S.. Much is a holdover from the Learjet takeover which Bombardier revitalized, apparently.

us.bombardier.com...

So Boeing is cutting their employment by 10%, building an assembly plant in China. Bombardier is maintaining their U.S. operations. Boeing also has the benefit of their military subsidizing....err profits.

It's not like the Boeing Company is suffering from ruinous competition, unless one considers Airbus.

If Trump backs this play, he'd better get a 'quid pro quo' for his efforts from Boeing.

Another point omitted is Canada's dollar is about 70 cents of so to the U.S. dollar. That is at least partially responsible for the discrepancy is prices.

Last point is Bombardier/Canadair/Learjet makes a pretty decent product, apparently. Just saying.

Nm.

Is it a reason Learjet has gone so quiet in its elostastic wing and its hyperspeed programs?

a reply to: Blackfinger

Yeah, their sales tanked. They have no new aircraft on the books, and they took a $1.2B writeoff in the Lear 85 after it got dropped. They went from 31 aircraft sold in 2015, to 20-25 in 2016. The Lear 85 had very little interest.

Yeah I cant see Bombardier being at the forefront of defence projects..

My oh my, I' m in a white out. All the snowflakes joining together.
Listen very closely, I would say 90% of American poster on this site spout of their religious reasoning for free trade, competitive markets, capitalism. Yet now the boots on the other foot you don't like it and start legal proceeding to stifle completion.
Suck it up men, America has been undercutting on every product food, drugs, weapons etc. etc. to the rest of the world foir a very, very long time so shut up and accept a little kickback.

Boo-Hoo-ing is at it again. They seemingly create the most number of lawsuits of any manufacturer.

a reply to: Leonidas

I'd kind like to see us, CANDA, stay in the airplane building business. As I am remember /understand it they are not getting the sales they need to stay afloat. Hence the the big pile of money thrown their way.

It wasn't that long ago the the US bailed out the auto industry.

It wasn't that long ago the US bailed out the banking industry.

Are we not allowed to keep our aviation industry ?
In this forum do we not discuss how the US goverrnent trys to balance out the contracts to both LM and Boeing producing aircraft?

a reply to: Zaphod58

We'll never get around to buying the jets on the liberals watch. There gonna delay and delay and 18 months before the next election announce that they are going the leave the choice to the next government.

Mean while half the countries going to sign up for "controlled substance pretending to be legal program" and loose their jobs due to the fact you aren't allowed a job of any authority once you sign up.