The behemoth American aerospace manufacturer, Boeing lashes out against Canadian plane-maker, Bombardier. Boeing accuses Bombardier of using illegal federal subsidies to sell the C-Series at a discounted rate, undercutting the american manufacturer. This comes just weeks after tensions rise between U.S. and Canada as trade laws and practices of the two nations comes into question by the Trump administration.
News broke on Friday April 28th as Boeing accused the Canadian manufacturer of selling their new plane at “absurdly low” prices. Bombardier’s current market costs for the CS100 is $79.5 million USD and the CS300’s average list price is $89.5 million USD according to Bombardier’s website. When compared to the Boeing counterparts, the 737-700’s current price is $82.4 million USD and the 737 MAX 7 costs $92.2 million USD according to Boeing’s website. The difference in cost between the aircraft isn’t just a few percent, rather a few million dollars.
Both the Canadian government and Bombardier reject the claims and it looks as though this will be the beginning of a lengthy legal battle between the two aircraft manufacturers. A statement from the Montreal-based aircraft manufacturer stated, “Bombardier structures its commercial dealings to ensure compliance with the laws and regulations of the jurisdictions in which we operate, including those issues raised by Boeing.” http://bit.ly/2qqD0wC
Boeing said they approached the Trump administration, looking for action “to end Bombardier’s illegal and unfair business practices before it is too late to prevent significant harm to the U.S.’s aerospace industry and thousands of good-paying aerospace jobs.” http://bit.ly/2qqD0wC
Even though a case such as this one has the potential to drag on for years, an investigation and the decision to implement preliminary duties could take place over the next few months. This is expected to have an adverse effect on Bombardiers U.S. sales for their new C-Series aircraft which competes directly with Boeing’s 737-700 and 737 MAX 7. According to international trade lawyer, Lawrence Herman, “Purchasers tend to back away from making commitments until they know the outcome of the proceedings, so I would expect that there will be some form of commercial repercussions.” http://bit.ly/2qBdm7J
Delta Air Lines will be the first U.S. C-Series carrier with an order placed over a year ago for 75 CS100 aircraft totaling $5.6 billion USD. There’s no word yet if Boeing’s allegations will impact Delta Air Lines purchase.
We’ll be keeping a close eye on this story as it develops as it could have a large impact on the aerospace industry as well as Bombardiers future in the United States. Be sure to check back on Manufacturing Talk Radio for the latest in manufacturing news, trends and developments.