LawAndOrder
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Tue Oct 10, 2017 10:14 pm

racercoup wrote:
golfradio wrote:
racercoup wrote:


I don't think the Canadian government invested billions to bail out Bombardier to see the jets manufactured in the US


See, that's the thing; Investissement Québec gets 50 million class B shares exercisable at C$ 2.21 (Closing price of BBD on TSX on Jun 30 C$2.36). If C-Series is successful, they get back handsome returns for their investment by way of capital gains and dividends. This is unlike a tax subsidy which BA gets where the state and federal tax payers don't see a nickel returned.

There will be no problem from Investissement Québec other than some disgruntled union workers at BBD.


Not even close. Boeing received a break on state's business and occupation taxes for locating plants in their jurisdiction for an agreed on length of time. So the state (s) in question are not giving up anything, but are getting jobs. The wages tied to those jobs are then taxed so the state has income it otherwise would not have had in addition to happy citizens. The WTO ruled this year that this was NOT anti-trade.

Boeing is not questioning the Canadian government's investment in Bombardier but rather the fact that it sold the airframes well below the cost of manufacturing. This dumping is not good for Boeing or it's other clients such as Southwest. I'm sure Airbus is happy they took up the cause also.

I don't think Boeing is stupid at all for their actions, I do think Bombardier made a stupid move selling so low. Time will tell.


The only problem is Boeing has done the same thing with United and their 737-700. Last time I checked a 737-700 is listed well above 22mil. At what point of discount is it considered price dumping? Is Boeing able to get away with offering higher discounts because the development cost has already been sunk? Are we just going to ignore the money that Boeing has received from the US government. This could be a dangerous precedent. I love how us Americans love to think that our manufactures received no help from the US, any entry level accountant can prove that notion wrong.
 
mjoelnir
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Tue Oct 10, 2017 10:33 pm

washingtonflyer wrote:
Indeed the agreement on civil aircraft contemplates standard duty elimination. The agreement does not forbid the imposition of remedial tariffs.


Not to be determined by one side unilaterally.
 
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SheikhDjibouti
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Tue Oct 10, 2017 11:25 pm

LawAndOrder wrote:
The only problem is Boeing has done the same thing with United and their 737-700. Last time I checked a 737-700 is listed well above 22mil. At what point of discount is it considered price dumping?

Two weeks back I would have asked this question myself, but thanks to any number of helpful contributors on this thread, I believe I can now give you the answer.
It is NOT price dumping because the heavily subsidised/discounted 737 is only being sold on home turf, where it is perfectly legal and acceptable in order to keep the pesky cheating foreigners out of the US market. Boeing is allowed to discount it's aircraft. Bombardier is not.
It is also legal for Boeing to discount it's 737 (& other products) in numerous countries around the world, basically wherever they do not have a local competing product that will be harmed by such tactics.

At least I think that's how the rules are written.
Whether they are in the spirit of free trade is another matter entirely......
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SheikhDjibouti
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Tue Oct 10, 2017 11:53 pm

racercoup wrote:
Boeing received a break on state's business and occupation taxes for locating plants in their jurisdiction for an agreed on length of time. So the state (s) in question are not giving up anything, but are getting jobs. The wages tied to those jobs are then taxed so the state has income it otherwise would not have had in addition to happy citizens. The WTO ruled this year that this was NOT anti-trade.
I'm truly surprised by those four sentences, but I guess you know what's right. Isn't this what every country is trying to achieve? And here you are saying such investment is officially NOT anti-trade? Ok.

racercoup wrote:
Boeing is not questioning the Canadian government's investment in Bombardier but rather the fact that it sold the airframes well below the cost of manufacturing.
If the whole argument boils down to just that, again I am surprised.

There is a nagging doubt in my mind that it isn't quite that simple. What if (in an absurd scenario) the subsidies included free factory space, negligible ground rent, free workers accommodation, and a well subsidised commissary (= a discounted supermarket only open to employees). In such conditions, the company could get away with paying peanuts to it's workforce, and the cost of the finished product, whether it be Boeing or BBD, would be pretty much just the sum of it's parts. Would the WTO still say this is acceptable?
(Come to think of it, this absurd scenario sounds vaguely like the old communist system. Anybody fancy a dirt-cheap Tupolev or Ilyushin?)
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washingtonflyer
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Tue Oct 10, 2017 11:58 pm

iamlucky13 is learning quickly....nice work

iamlucky13 wrote:
2.) As above, but I expect Bombardier will submit their own data before the final determination in the spring, in order to reduce the penalty rates. My theory is they're delaying doing so to try to fight the penalties entirely, before shifting to accepting the penalties but minimize their scale as a last resort.


The deadline for factual submissions at Commerce is over. Bombardier will not have another chance. Well established deadlines.

iamlucky13 wrote:
3.) If the sales are upheld as having already taken place at contract signing, where as Bombardier contends the sales don't actually take place until delivery, then yes, the rates still apply. However, washingtonflyer has indicated that after the penalties have been in place for a year, Delta can petition for the dumping (80%) penalty to be reduced based on the more recent sales. The subsidy penalty would be unaffected by this.


Basically correct.

iamlucky13 wrote:
4.) Washingtonflyer has continually discussed the penalty as being levied through the company importing the product - Delta. Based on his experience, I assume he knows what he is talking about. I assume if Bombardier tried to pay offsets for this to Delta, Boeing would allege that they are simply doubling-down on dumping.


Bombardier paying Delta for the amount of duties is known as duty absorption which is forbidden. The duty tariff is doubled if Commerce determines that duty absorption has taken place. Each entry comes with a "statement of non-reimbursement" where the importer states that it was not reimbursed for AD duties.
 
GalaxyFlyer
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 1:03 am

I know it’s politics disguised as law, but the whole issue is economically absurd.

GF
 
iamlucky13
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 1:33 am

washingtonflyer wrote:
iamlucky13 wrote:
2.) As above, but I expect Bombardier will submit their own data before the final determination in the spring, in order to reduce the penalty rates. My theory is they're delaying doing so to try to fight the penalties entirely, before shifting to accepting the penalties but minimize their scale as a last resort.


The deadline for factual submissions at Commerce is over. Bombardier will not have another chance. Well established deadlines.


I can only imagine Bombardier must have a fallback tactic of some form for dealing with the penalty rates if they can't get the penalties themselves overturned. While many justifiable doubts exist about the leadership of the company, especially the on the board, the CEO is new blood, and the legal team must know the options, stakes, and likely outcomes of various strategies. They certainly must have been plainly aware of fact-finding process and the procedure for handling uncontested factual claims.

If my assertion that the penalty rates are grossly over-inflated is correct, how in your experience might Bombardier fight for lower penalties then if they concede they are not going to be able to overturn either or both determinations of violations?
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 1:37 am

SheikhDjibouti wrote:
If the whole argument boils down to just that, again I am surprised.

There is a nagging doubt in my mind that it isn't quite that simple. What if (in an absurd scenario) the subsidies included free factory space, negligible ground rent, free workers accommodation, and a well subsidised commissary (= a discounted supermarket only open to employees). In such conditions, the company could get away with paying peanuts to it's workforce, and the cost of the finished product, whether it be Boeing or BBD, would be pretty much just the sum of it's parts. Would the WTO still say this is acceptable?
(Come to think of it, this absurd scenario sounds vaguely like the old communist system. Anybody fancy a dirt-cheap Tupolev or Ilyushin?)

No need to go that far in thinking, Canada has some very high taxes so pick a couple of them and go from there. One of the issues on this site is the argument between RLI - where the government puts up money now - versus tax breaks where the government defers collection of taxes now, the WTO allows both forms, so all the Feds or Local govt has to do is defer some taxes for a year or two lowering the current cost of production.
 
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LockheedBBD
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 1:43 am

racercoup wrote:
mjoelnir wrote:
BBD should just assemble the CS sold in the USA in Wichita, problem solved.



I don't think the Canadian government invested billions to bail out Bombardier to see the jets manufactured in the US


I don't think the Canadian government invested billions in order for Bombardier to go bankrupt again. Assembling the CSeries in the U.S. would be the way to go, but considering how long it would take to get set up and the cost, it might not be worthwhile unless some U.S. states throw incentives at Bombardier.
 
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par13del
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 1:43 am

Well they gave Airbus breaks so why not Bombardier?
No need to get nationalistic, the tanker and A380 threads have shown that based on their US content they are US planes they just have an Airbus banner on them....
 
Amiga500
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 8:50 am

racercoup wrote:
Not even close. Boeing received a break on state's business and occupation taxes for locating plants in their jurisdiction for an agreed on length of time. So the state (s) in question are not giving up anything, but are getting jobs.


Except from the BILLIONS in revenue from business and occupation taxes. :rolleyes:


If Company A doesn't have to give away $X, that is the same as giving company B $X, but subsequently taking it away.
 
Amiga500
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 8:55 am

PrioMDCemp wrote:
Boeing bet the farm on the 707


This is an utter myth.

They bet the square root of f___ all.

The USAF had already ordered the KC-135 (eventually ordering over 800). The KC-135 was a 707 with a slightly different fuselage diameter and a few more detail changes. Much of the fundamental design was de-risked with USAF support.


The rest of your post isn't much more accurate either. Douglas and later McAir died because (i) the DC-10 was lacking relative to the competition, (ii) they failed to respond to issues in a timely fashion resulting in a loss of confidence of airlines in the airframe and (iii) McAir lost confidence in their ability to bring any further new designs to market so iterated on baselines long past their "best before" date.

If you want to draw parallels, Boeing have an issue with (iii) due to their issues bringing 787 to market. Fortunately, they aren't dealing with (i) or (ii) - but they are pushing the 737 beyond its "best before" date. They need to be very careful over the next decade to show they have learned from history. The 777X and the 737max aren't pristine examples of having learnt much.
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 9:45 am

Dutchy wrote:
So is Canada put in a tax of 300% on Boeing craft? Than Airbus will be the laughing third party in this.


I'm keeping my fingers crossed that Canada does it. Boeing did harmful action that needs to be properly retailiated against.
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dtw2hyd
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 11:01 am

Assuming 300% sticks, is DL on the hook for cancellation penalties.

Apologies if this question was already asked and answered up thread.
 
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SheikhDjibouti
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 11:03 am

PrioMDCemp wrote:
Boeing bet the farm on the 707

Amiga500 wrote:
This is an utter myth.
They bet the square root of f___ all.
The USAF had already ordered the KC-135 (eventually ordering over 800). The KC-135 was a 707 with a slightly different fuselage diameter and a few more detail changes. Much of the fundamental design was de-risked with USAF support.

Wikipedia ties itself in knots on this subject; it states the project was an enormous risk for Boeing, but then says;
"Besides Boeing's ability to provide a jet tanker promptly, the air-to-air refueling system was also a Boeing product from the KC-97:
developing the KC-135 had been a safe bet"

The Boeing 367-80 (aka Dash 80) cost US$16 million, which allegedly was an enormous risk for Boeing. Meanwhile the price of a shiny new B707 in 1955? $4.3million
If Boeing could make just $½million on each frame, they would break even after a paltry 32 sales. And back then, with the Comet grounded, and the DC-8 nowhere in sight, they had the market all to themselves. They probably could have sold B707s with a 50% mark-up!

If only BBD could have designed, developed & built the first CS100, all for today's equivalent cost of the next four off the production line. They could break-even after 32 sales., or maybe less They wouldn't even need the added bonus of a massive military contract to fall back on.

(in fact the numbers are so ridiculous, I'm wondering if Wikipedia have got their facts wrong?)
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YULspotter
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 11:19 am

So Being has decided to launch a PR campaign so Canadian's forgive them. Based on the comments below the social media add, it seems to be back firing quite badly. Looks like one of those "What where they thinking" moments. 2,000 jobs in Canada and a so called 4 billion in investment is likely no where near the damage the 300% duty could cause to the Canadian economy.

https://www.facebook.com/Boeing/videos/137394340339084/
 
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SheikhDjibouti
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 12:32 pm

YULspotter wrote:
So Being has decided to launch a PR campaign so Canadian's forgive them.
https://www.facebook.com/Boeing/videos/137394340339084/


Loving that sexy, sassy voice-over! But wouldn't it have been even better if they used a real live woman instead of computer generation?
And what exactly is "suppor" ?
"In years, In jobs, In partnership, In suppor"
Thank goodness for subtitles to help those of us with sub-standard hearing. :roll:
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jalarner
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 1:51 pm

Thank you and everyone else for the replies. I've (tried) to read most of the 19 pages and other threads for ages now. Pretty complex stuff. Your answers to 2 and 3 above are interesting...

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dtw2hyd
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 2:34 pm

YULspotter wrote:
So Being has decided to launch a PR campaign so Canadian's forgive them. Based on the comments below the social media add, it seems to be back firing quite badly. Looks like one of those "What where they thinking" moments. 2,000 jobs in Canada and a so called 4 billion in investment is likely no where near the damage the 300% duty could cause to the Canadian economy.

https://www.facebook.com/Boeing/videos/137394340339084/


Sometimes PR overspending yields negative results. PR firms/Lobbyists want to give every dollar worth to their clients, it is up to the client to say, you are doing a great job but dial it down a notch, would you.

Canadian PM will be in DC today, hopefully, someone will ask about DOC ruling.
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 4:19 pm

SheikhDjibouti wrote:

And what exactly is "suppor" ?
"In years, In jobs, In partnership, In suppor"
Thank goodness for subtitles to help those of us with sub-standard hearing. :roll:


Certain dialects tend to drop consonant sounds when they appear at the end of a word. You can find something similar with British English (Cockney to be specific). Either that, or their CG voice over is terrible. :cheeky:
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 4:26 pm

dtw2hyd wrote:
Assuming 300% sticks, is DL on the hook for cancellation penalties.


Perhaps it would be better for BBD to drop the cancellation penalties to keep faith with Delta. Seems like it would be extra salt in Delta's face, otherwise. It's not like Delta would cancelling because of their own choice, but due to unforeseen external circumstances out of their control.
 
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LockheedBBD
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 4:41 pm

This does not make any sense: https://www.reuters.com/article/us-delt ... SKBN1CG20F

We're not going to be forced to pay tariffs or anything of the ilk," Delta Chief Executive Ed Bastian said on the carrier's third-quarter earnings call.


Bastian called the U.S. Commerce Department ruling "nonsensical" but said that the carrier still expects to take the jets. The proposed duties would not take effect unless affirmed by the U.S. International Trade Commission (ITC) early next year.


Seems rather contradictory, since they can only get the jets if they pay the 300%.

Sounds like Delta wants to build a wall but wants somebody else to pay for it. :D
 
iamlucky13
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 4:57 pm

dtw2hyd wrote:
Assuming 300% sticks, is DL on the hook for cancellation penalties.

Apologies if this question was already asked and answered up thread.


As thorough as contracts this large tend to be, I'd guess there is provision for matters like cost changes out of the customer's control. The actual contract is obviously not public.

On that topic, however, this morning Delta has indicated to their shareholders confidence the 300% tariffs will not stand, and that they will take delivery the jets, although perhaps with delays. It doesn't sound like he gave a detailed basis for that reasoning beyond the argument that Boeing was not in competition for this order.

The actual meaning of the statement could be actual confidence or it could be an evasive way of indicating they haven't yet made a decision how to address a material event that they are obligated to report to shareholders about.

https://www.flightglobal.com/news/artic ... fs-442086/
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 5:02 pm

LockheedBBD wrote:
This does not make any sense: https://www.reuters.com/article/us-delt ... SKBN1CG20F

We're not going to be forced to pay tariffs or anything of the ilk," Delta Chief Executive Ed Bastian said on the carrier's third-quarter earnings call.


Bastian called the U.S. Commerce Department ruling "nonsensical" but said that the carrier still expects to take the jets. The proposed duties would not take effect unless affirmed by the U.S. International Trade Commission (ITC) early next year.


Seems rather contradictory, since they can only get the jets if they pay the 300%.

Sounds like Delta wants to build a wall but wants somebody else to pay for it. :D


No, they mean they are planning on the tariff either getting overturned, or radically reduced.
 
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coronado
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 5:02 pm

I am sure Delta can find a federal judge somewhere to issue a stay of collection enforcement action against US Customs until the entire case is adjudicated, appealed and eventually gets to the Supreme Court. That could take several years. If at some stage Delta exhausts its appeals, they can send the offending product (i.e. the CS100 and 300) a/c back to the manufacturer or more likely Delta will transfer them and lease them out to one of their non US affiliates where they have shareholdings in such as Gol, Aero Mexico or AFKLM or maybe even to China.
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 5:07 pm

LockheedBBD wrote:
This does not make any sense: https://www.reuters.com/article/us-delt ... SKBN1CG20F

We're not going to be forced to pay tariffs or anything of the ilk," Delta Chief Executive Ed Bastian said on the carrier's third-quarter earnings call.


Bastian called the U.S. Commerce Department ruling "nonsensical" but said that the carrier still expects to take the jets. The proposed duties would not take effect unless affirmed by the U.S. International Trade Commission (ITC) early next year.


Seems rather contradictory, since they can only get the jets if they pay the 300%.

Sounds like Delta wants to build a wall but wants somebody else to pay for it. :D


I don't read much contradictory. It probably means DL will find a legal way to get around the tariff.
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iamlucky13
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 5:23 pm

KarelXWB wrote:
LockheedBBD wrote:
This does not make any sense: https://www.reuters.com/article/us-delt ... SKBN1CG20F

Seems rather contradictory, since they can only get the jets if they pay the 300%.

Sounds like Delta wants to build a wall but wants somebody else to pay for it. :D


I don't read much contradictory. It probably means DL will find a legal way to get around the tariff.


I just had an interesting thought about that, although I don't know if my underlying premise is accurate as a general norm.

I am under the impression corrective duties are not levied retroactively. For example, when the US put tariffs on Chinese steel for dumping, I'm not aware that either my company or our suppliers who were the actual importers ended up paying extra for material that we had used in the past.

Bombardier reportedly claims the sales have not occurred yet. Therefore the dumping hasn't actually occurred, so there's no trade violation yet to penalize.

Boeing and Commerce claim the sales have occurred. If Commerce rejects Bombardier's argument, can Delta's purchase be retroactively dutied?

Or is this a way out for Delta, which would leave them the only US operator of the C Series, and their competitors no economically viable way to purchase it?
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 5:48 pm

coronado wrote:
I am sure Delta can find a federal judge somewhere to issue a stay of collection enforcement action against US Customs until the entire case is adjudicated, appealed and eventually gets to the Supreme Court. That could take several years. If at some stage Delta exhausts its appeals, they can send the offending product (i.e. the CS100 and 300) a/c back to the manufacturer or more likely Delta will transfer them and lease them out to one of their non US affiliates where they have shareholdings in such as Gol, Aero Mexico or AFKLM or maybe even to China.


There is one and only one place where someone can seek a judicial stay of a customs collection action - the Court of International Trade in New York. And the chances of a CIT judge issuing an order against collection of duties are..... well......Z.E.R.O.

The Court will not interfere with an administrative action until an action is ripe for hearing at the CIT. Saying you don't want to pay because you disagree is not an example of an action that is ripe.
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Wed Oct 11, 2017 5:53 pm

iamlucky13 wrote:
KarelXWB wrote:
LockheedBBD wrote:
This does not make any sense: https://www.reuters.com/article/us-delt ... SKBN1CG20F

Seems rather contradictory, since they can only get the jets if they pay the 300%.

Sounds like Delta wants to build a wall but wants somebody else to pay for it. :D


I don't read much contradictory. It probably means DL will find a legal way to get around the tariff.


I just had an interesting thought about that, although I don't know if my underlying premise is accurate as a general norm.

I am under the impression corrective duties are not levied retroactively. For example, when the US put tariffs on Chinese steel for dumping, I'm not aware that either my company or our suppliers who were the actual importers ended up paying extra for material that we had used in the past.


Duties are almost never retroactive except where the domestic industry has alleged that critical circumstances exist. That didn't happen here. Assuming that the ITC makes an affirmative determination, and the determination is a threat determination (for the reasons I stated well upthread or in a different thread), entries that take place after the issuance of the AD/CVD orders will be assessed the duty - requiring a cash deposit.

iamlucky13 wrote:
Bombardier reportedly claims the sales have not occurred yet. Therefore the dumping hasn't actually occurred, so there's no trade violation yet to penalize.


You're starting to confuse two roles: the role of Commerce in determining that dumping has taken place and the role of Customs in collecting duties. Commerce tells Customs to collect duties starting with a date certain. Duties are collected when goods enter the legal customs bounds of the USA and are entered for "consumption". The date of sale issue is largely irrelevant for Customs.

iamlucky13 wrote:
Boeing and Commerce claim the sales have occurred. If Commerce rejects Bombardier's argument, can Delta's purchase be retroactively dutied?


Simple answer - no.

iamlucky13 wrote:
Or is this a way out for Delta, which would leave them the only US operator of the C Series, and their competitors no economically viable way to purchase it?


Delta could let the delivery slots roll back to other customers and take delivery later on. Or Delta could roll the dice and anticipate an ITC negative. I believe they're considering both options.
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Thu Oct 12, 2017 8:15 am

Story continues:

Justin Trudeau, the Canadian Prime Minister, told President Donald Trump on Wednesday he would block his country’s armed forces from buying Boeing aircraft if the US presses ahead with plans to slap import tariffs of 300 percent on Bombardier aeroplanes.

The issue is threatening to ignite a trade war between the US, Canada and the UK, where the Canadian planemaker employs about 4,000 people in Belfast.


http://www.telegraph.co.uk/business/201 ... contracts/
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Billyjet
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Thu Oct 12, 2017 11:57 pm

Boeing and commerce probably made the assumptions it is not canada's best interests to go into a trade War.

I think bbd is at fault, perhaps a little more or not than others airframers, however this is not about who is right or whi is at fault.

It is just bussines for boeing. Even if proven wrong, they were able to stop/delay a few or several cseries sales campaigns. Just that makes it worth already.

In the end, its the price you have to pay for going into the lions cage, that is narrowbody markets.

I am amazed that we dont see the plan B bbd management must have for such scenario....

I mean, instead of going into a trade war you are not going to win, how about selling some cheap bodies elsewhere in the world?
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 13, 2017 2:21 am

I totally agree with Billyjet. Why does nobody else want to buy an aircraft that is discounted by 300% and sells for far less than cost (less than $20 million according to Boeing)?
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 13, 2017 6:02 am

Can Delta just lease the aircraft from a third party that perhaps doesn't have to pay the duty? or can bombardier just lease the jets to Delta directly?
 
airnorth
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 13, 2017 7:11 am

YVRing wrote:
Can Delta just lease the aircraft from a third party that perhaps doesn't have to pay the duty? or can bombardier just lease the jets to Delta directly?

Nope
 
PPVRA
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 13, 2017 12:40 pm

Billyjet wrote:
I mean, instead of going into a trade war you are not going to win, how about selling some cheap bodies elsewhere in the world?


The whole point was to get a large, globally visible and highly reputable operator to order the type. Delta fit the bill perfectly and they were looking for a 100 seater at the time.

IMO, going with a US carrier makes sense given how difficult the 100 seat market can be in the USA. That means sales would likely have been limited anyways. Dump it there and use the rest of the world to make the CSeries work economically. Again, this is just speculation on my part.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
SteelChair
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 13, 2017 12:47 pm

Again, there is no "dumping." There is program accounting earning early customers through discounts for a revolutionary, game changing, all-new jet. Just like Boeing did with the 787. Delta said they didn't buy it because of the price, but because of the innovation.
 
PPVRA
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 13, 2017 12:51 pm

SteelChair wrote:
Again, there is no "dumping." There is program accounting earning early customers through discounts for a revolutionary, game changing, all-new jet. Just like Boeing did with the 787. Delta said they didn't buy it because of the price, but because of the innovation.


BBD doesn't use program accounting, and that's not what program accounting is anyways. And as it has been stated a million times, this BBD-Delta deal has nothing to do with losing money because it's the first few airframes.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
SteelChair
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 13, 2017 1:00 pm

Yep you are right. The Bombardier Delta deal is all about Delta buying the only available airplane in its class, the only one that is the right size for its needs, and a very revolutionary plane at that.

All the rest is just noise.
 
bigjku
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 13, 2017 1:15 pm

SteelChair wrote:
Yep you are right. The Bombardier Delta deal is all about Delta buying the only available airplane in its class, the only one that is the right size for its needs, and a very revolutionary plane at that.

All the rest is just noise.


This revolutionary plane nonsense has to stop. It’s a tube with wings and two underwing engines. Just like every other tube with wings and two underwing engines that we have seen for 40 some years.

It’s not the first heavily composite aircraft we have seen. It’s not breaking ground as a fly by wire aircraft. It’s just new. That’s all.

Both Airbus and Boeing very well could build a 5 wide or 6 wide composite airliner. Both have the knowledge and both have resources that dwarf BBD. They didn’t because the business case for doing so sucks. BBD just happens to have proved the accountants correct by doing something both the big builders figured out was a losing proposition.
 
PPVRA
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 13, 2017 1:19 pm

SteelChair wrote:
Yep you are right. The Bombardier Delta deal is all about Delta buying the only available airplane in its class, the only one that is the right size for its needs, and a very revolutionary plane at that.

All the rest is just noise.


Mind you, the CSeries wasn't Delta's first choice. Not until Canada made it Christmas in April.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
SteelChair
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 13, 2017 1:20 pm

Please tell us what you know about the discussions you heard in Delta's boardroom, with your own ears, about what their first choice was.

Anything else is just speculation.
 
PPVRA
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 13, 2017 1:24 pm

SteelChair wrote:
Please tell us what you know about the discussions you heard in Delta's boardroom, with your own ears, about what their first choice was.

Anything else is just speculation.


Delta's own press releases, actually.

Edit: Found it:

http://news.delta.com/embraer-190s-more ... ming-delta
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
SteelChair
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 13, 2017 1:32 pm

bigjku wrote:
SteelChair wrote:
Yep you are right. The Bombardier Delta deal is all about Delta buying the only available airplane in its class, the only one that is the right size for its needs, and a very revolutionary plane at that.

All the rest is just noise.


This revolutionary plane nonsense has to stop. It’s a tube with wings and two underwing engines. Just like every other tube with wings and two underwing engines that we have seen for 40 some years.

It’s not the first heavily composite aircraft we have seen. It’s not breaking ground as a fly by wire aircraft. It’s just new. That’s all.

Both Airbus and Boeing very well could build a 5 wide or 6 wide composite airliner. Both have the knowledge and both have resources that dwarf BBD. They didn’t because the business case for doing so sucks. BBD just happens to have proved the accountants correct by doing something both the big builders figured out was a losing proposition.


No other plane in its size class has the composites, the electronics, the engines, the cabin. That sounds revolutionary to many people.

The "big builders" haven't introduced an all-new narrow body since 1984. Ninteen eight four. The 737 is based on 1957 structure, the nose of the plane comes from the 707....pilots who have flown it for any length of time complain of permanent hearing loss.

The "big builders" survive on handouts that are marginally "legal" and can't compete in the marketplace against this plane, they have to lobby the government for help. I'm embarrassed for them.

Bombardier s costs are lower than theirs, the business case is different for them.
Last edited by SteelChair on Fri Oct 13, 2017 1:51 pm, edited 1 time in total.
 
SteelChair
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 13, 2017 1:39 pm

PPVRA wrote:
SteelChair wrote:
Please tell us what you know about the discussions you heard in Delta's boardroom, with your own ears, about what their first choice was.

Anything else is just speculation.


Delta's own press releases, actually.

Edit: Found it:o

http://news.delta.com/embraer-190s-more ... ming-delta



So 20 Embraers were replaced by 125 (75 firm) CSeries? Those must have been 20 productive little airplanes......Delta was planning to fly them 50 hours a day (sic).

Nothing in that press release says anything about Delta not making additional orders for Bombardier jets. You do not know what Delta was or was not further considering at that time.

I asked for what you heard with your own ears and you responded with a nebulous press release that does not support your claim.
 
PPVRA
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 13, 2017 1:50 pm

SteelChair wrote:
PPVRA wrote:
SteelChair wrote:
Please tell us what you know about the discussions you heard in Delta's boardroom, with your own ears, about what their first choice was.

Anything else is just speculation.


Delta's own press releases, actually.

Edit: Found it:

http://news.delta.com/embraer-190s-more ... ming-delta



So 20 Embraers were replaced by 125 (75 firm) CSeries? Those must have been 20 productive little airplanes......Delta was planning to fly them 50 hours a day (sic).

Nothing in that press release says anything about Delta not making additional orders for Bombardier jets. You do not know what Delta was or was not further considering at that time.


Obiously they would have purchased more, either from Embraer or from other airlines.

The E-jets, especially the up and coming E2s, are similarly sized to Delta's CS100s on order. They have the same engines, full fly by wire, advanced avionics, and a cabin that has to be at least comparable given it doesn't have a single middle seat. Not as extensive use of composites, but they have some pretty advanced metals in an all new wing.

I doubt Delta would have ordered both aircraft.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
CX747
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 13, 2017 1:53 pm

So Canada won't buy 18 Super Hornets? Boeing has already calculated what their loss would be and went forward. 18 Super Hornets and a few deals are not anywhere worth a 30 year CSeries program consistently dumping product in the US.
"History does not long entrust the care of freedom to the weak or timid." D. Eisenhower
 
bigjku
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 13, 2017 1:54 pm

SteelChair wrote:
bigjku wrote:
SteelChair wrote:
Yep you are right. The Bombardier Delta deal is all about Delta buying the only available airplane in its class, the only one that is the right size for its needs, and a very revolutionary plane at that.

All the rest is just noise.


This revolutionary plane nonsense has to stop. It’s a tube with wings and two underwing engines. Just like every other tube with wings and two underwing engines that we have seen for 40 some years.

It’s not the first heavily composite aircraft we have seen. It’s not breaking ground as a fly by wire aircraft. It’s just new. That’s all.

Both Airbus and Boeing very well could build a 5 wide or 6 wide composite airliner. Both have the knowledge and both have resources that dwarf BBD. They didn’t because the business case for doing so sucks. BBD just happens to have proved the accountants correct by doing something both the big builders figured out was a losing proposition.


No other plane in its size class has the composites, the electronics, the engines, the cabin. That sounds revolutionary to many people.

The "big builders" survive on handouts that are marginally "legal" and can't compete in the marketplace against this plane, they have to lobby the government for help. I'm embarrassed for them.

Bombardier s costs are lower than theirs, the business case is different for them.


BBD put itself out of business trying to build this plane. The numbers are right there in their financial statements. Before the government money came in they faced a problem. They couldn’t sell the plane for a high enough price to keep the project and company afloat. They flat out stated after the injections of equity that they would be able to be much more flexible on price.

I agree with you that stating the production cost of an aircraft today for them isn’t a fair metric. They could provide the program accounting but they don’t. My guess (and it’s a guess because we don’t have the numbers) is that it wouldn’t paint a rosy picture otherwise why not provide that information as it would both bolster their case here and drive up there stock price?

The only reason I see not to do it is because the cost of production even once expanded and stabilized is pretty much a wash or negative to the price they can command on the market for their product. This is exactly why Boeing passed on just such an airplane which they would have built in higher volume and thus had more production efficiency than BBD has. It hasn’t just been Boeing undercutting their prices. Airbus has done it as well. Numerous articles cite this happening.

BBD made a mistake from a business perspective. They imperiled the entire broad company because of it. They let Gulfstream get in front of them in the business aircraft market because this project burned so much cash.

It would all be worth it if they could say once we are producing X aircraft per year we expect to have positive earnings on each plane going forward. It would drive up their stock price quite drastically. It would drive orders as it would increase confidence in the program. It would be a compelling defense against the dumping charges (though not the subsidy claims). It lets your project a breakeven point. The only reason not to provide that accounting and make that statement is that it is factually untrue and they know it. Can you see any other reason not to provide this information?
 
SteelChair
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 13, 2017 2:00 pm

"Obviously" "I doubt"

Thanks for your opinions, thats a lot different than facts, such as Ed Bastian saying just a few days ago, "We bought Cseries for the innovation, not the price. "
 
SteelChair
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 13, 2017 2:06 pm

CX747 wrote:
So Canada won't buy 18 Super Hornets? Boeing has already calculated what their loss would be and went forward. 18 Super Hornets and a few deals are not anywhere worth a 30 year CSeries program consistently dumping product in the US.


With all due respect , the US-Canada relationship is a lot more involved than just 18 Super Hornets. Do we really want bad relations with what has historicallly been a great ally, just to favor one company, which frankly is kind of floundering because of its own mistakes and doesn't have a comparable product in any event?

But thanks for pointing out that Boeing has a vested interest in tryimg to limit competition in the marketplace.
 
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aemoreira1981
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 13, 2017 2:17 pm

mjoelnir wrote:
BBD should just assemble the CS sold in the USA in Wichita, problem solved.


I'm surprised that that isn't floated as a solution. Have the parts brought in as a kit to Wichita and build the planes there at the Learjet factory...at least for the US order.

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