JoeCanuck wrote:

washingtonflyer wrote:

JoeCanuck wrote:

The U.S. has been active in trade matters for decades. So, I find this comment largely irrelevant.

JoeCanuck wrote:

If Boeing isn't claiming they are being harmed, then why is it up to them to initiate action against Canada? This would never have come up if Boeing hadn't started the action. Is that the way the system works...? Any entity that thinks that another country is 'dumping' into the US, even if they have no personal interest, can initiate action? That sounds like a bizarre system...but little surprises me about US politics anymore.

My mention of softwood lumber is merely to contrast that action, where there is the possibility of harm, (slim though that has historically been), to Boeing's, where they could only show harm to the most biased panel. Reasonable? Sure. In 30 years the softwood lumber dispute hasn't been reasonable...so this is even less likely to be. I know...you're working for the allegedly injured parties.

Sure...I get it....harm isn't necessarily the same as dumping...but, if Boeing isn't being harmed, why are they even involved? Altruism...? The love of baseball, hotdogs and apple pie...?

Not only is no American industry being harmed by BBD's sale of jets, American companies are being boosted by the sale...Delta, Pratt, Spirit....there is a long list of American companies who hire American workers who would be harmed if they sale DOESN'T go through.

That doesn't mean much when the top brass of Boeing is getting the president of the US to sell planes for them to Saudi...and they get a front row seat on AF1 for the show.

But that's not government assistance...no sir.

I didn't say that Boeing isn't claiming that they aren't harmed. They certainly are. However, the question of harm is a separate question from the question of dumping or the question of subsidies. Those are two distinct legal issues that are examined by two distinct federal agencies: the Trade Commission examines harm and the Commerce Department examines dumping and subsidization. Now I will say that you can't find injury (harm) without a finding of dumping/subsidies, but as I said before, I can all but guarantee you that Commerce will find that subsidies exist and I can bet you it will find dumping. The question really is going to be whether Boeing is injured (or threatened with injury). After reading the transcript over the weekend and shooting the breeze with my colleagues, I believe that there is a path to an affirmative finding - at the preliminary stage. I believe the final determination of injury is going to be much, much tougher.

This is kind of a case of first impressions for the Commission, and they're going to have to dig into Congress' intent of whether you can have injury (or threat) where you've not had an entry of goods, but where you've certainly have had a sale. The Commission will also have to assess whether Boeing, with a massive backlog, can possibly be injured, whether Boeing willfully exited this market by not producing the -700 or the 717 to any meaningful extent, and whether Boeing's definition of what constitutes the industry (100-150 seat jets with a range of at least 2900 miles) is the proper industry to be assessed. Bombardier complained at length that the proposed scope was written to eliminate comparisons to the E-195 E2s. I believe that is a very valid complaint and the Commission has the right to expand what is called the "like product" to assess whether harm exists.

JoeCanuck wrote:

Any entity that thinks that another country is 'dumping' into the US, even if they have no personal interest, can initiate action? That sounds like a bizarre system...but little surprises me about US politics anymore.

I strongly disagree with the notion that Boeing has no personal interest. They believe that that they have a very strong personal interest. From their perspective, they're trying to avoid Airbus II. I'd implore you to avoid references to politics. Trade cases are strategic business decisions and while there have been lots of run of the mill cases, there have been very sensitive ones from time to time that cause extra controversy: vector super computers, printing presses, crude oil, soft wood lumber, solar modules, etc.

I basically made the point earlier that the only harm Boeing can even theoretically show , is potential harm from a stretch of the cs300....which is currently as real as the Easter bunny and would be two sizes larger than the model Delta wants.

Delta has said Boeing had no product in the size they wanted and were never being considered.

Yet even though they as much as admit they don't have a competitive product, they still claim harm now. Boeing might as well start whining about Honda in case they build a flying car that might hurt 737 sales.

As for these being strategic business decisions....sure, but they are just as much politics. the orange one was elected partly on his USA uber alles trade platforms. Trade wars can win elections....just ask the senators in Oregon.

Joe,

Is it too much to ask you to keep a minimum of objectivity in the comments? It is too childish to bring the Easter Bunny into the discussion.

Each aircraft is distinct in terms of capacity and range. It is not uncommon for US airlines to employ a varied mix of aircraft with between 100-190 passengers for the same domestic routes, so there is indirect competition between aircraft that you think are totally different.

So you (Delta) want to buy a new series of cars for the Wallsteet friends:. Lets say 100 Chevy Corvette.(to Keep within US). Unfortunately Fords has no delivery Slots for the F-series truck, but they have some 3 year old last series ones and in addition can offer some chrysler Units (lets say Chrysler RAM series) they got somehow.
The Delta guys still oder the 100 Corvettes, and they get a very good deal for this.
So then Ford complains that they ordered the Chevys and refused to take the 3 year old Trocks and the cryslers.

Aha- great move!

Flyglobal

SWEDISHBLENDER wrote:

JoeCanuck wrote:

I wonder what could cost Boeing more...Delta buying a few CSeries, (which don't compete directly with anything Boeing sells), or some 321's and 350's.

While the current C-Series doesn't pose a direct threat to anything Boeing produces at the moment, it's the future STRETCHED versions that pose the real threat. the Airbus A320 is deftly outperforming the 737 product line in terms of sales. Another viable competitor in the market would be a big blow to Boeing. It's a good thing Boeing never took the sub-150 seat market seriously

Right, they are trying to convict a man of crimes he hasn't committed yet and may never commit.

longhauler wrote:

Interesting comments about Boeing in the G&M:

https://www.theglobeandmail.com/opinion ... e35066324/

"From 2000-2015, Boeing got $13.4-billion in grants and tax breaks – almost three times as much as the number-two company on the list, Intel. And now it’s crying “no fair,” because Bombardier has received billions in federal and provincial assistance, loans and investment since 2008 for the C-Series jet."

I am guessing Boeing doesn't like someone playing using rules they often use themselves.

I see Boeing's pathetic actions as the first confirmation that the CSeries is a viable contender. Delta Air Lines is a big playier in this issue. They are the ones who may end up paying more for the best ship for the job. I wonder if Delta's last large order for A321s (and not 737s) was not a shot across the bow at Boeing.

Well this goes to show that it is worse than just the pot calling the kettle black. Bombardier gets some investment in their program, Boeing gets massive tax breaks, and the best customer they could ask for, their military. It does show for sure that the CSeries is very competitive, but it just doesn't compete with anything Boeing has to offer other than the 737-7 which hardly anyone really wants anyway. One could say Boeing has more to lose if the CS500 becomes reality as their 737-9 and -10 don't seem to be very big hits as opposed to Airbus who expects the A321 to basically take over and outsell the A320.

I once was in contact with a man that worked at Boeing who IIRC worked at Renton on 757s and later did other things there, but he no longer works there as I think he was caught being a whistle blower or something. To say the least he was an interesting person, but he would always go on about how the McDonell Douglas merger wear to blame for all of their problems and all their behaviour as their big sigs essentially took over. I mildly believed that at first, but I'm really starting to see that now. They whine and complain when not everyone wants their outdated product that, while efficient, is not good at every mission especially that which the CSeries covers.

Now Boeing claims that the DL deal can put them out of business!

https://leehamnews.com/2017/05/25/bomba ... more-23528

Boeing says its very future, and that of US aerospace industry, is at risk if Bombardier’s deal with Delta Air Lines for 75 CS100s and 50 options is not fined for price dumping.

...

Boeing claimed the CSeries will kill the 737-700 and, more importantly, its successor, the MAX 7, through the low prices offered United Airlines and to Delta in competitions last year.

The article also contains some interesting details about the DL deal and how BBD has structured the costs. Very creative.

Some see this as defending corporate interests through all available legal resources. Others as stifling competition and bullying. Innovation that comes from non-oligarchy manufacturers is always a threat to a sense of entitlement. It would be good to remember that nothing happens in this industry without some kind of enabling. This takes different forms, but BA is also an enabler and enables to its own advantages. I am sure their advisors see only advantages, they will argue about defending the market, bla bla bla, but I have a bad taste in my mouth over this and think like many here, the regulators should allow the introduction and sale of innovative products (CS) because they move the threshold of efficiency forward. Ultimately, the market will sort out pricing also for Bombardier products.

scbriml wrote:

Now Boeing claims that the DL deal can put them out of business!

Thou doth protest too much.

They may have scuppered themselves with that. IMO they've likely lost an awful lot of credibility* with that argument.



*of course, I assume the judges have at least a rudimentary knowledge of the commercial aerospace industry.

Nean1 wrote:

JoeCanuck wrote:

washingtonflyer wrote:

I didn't say that Boeing isn't claiming that they aren't harmed. They certainly are. However, the question of harm is a separate question from the question of dumping or the question of subsidies. Those are two distinct legal issues that are examined by two distinct federal agencies: the Trade Commission examines harm and the Commerce Department examines dumping and subsidization. Now I will say that you can't find injury (harm) without a finding of dumping/subsidies, but as I said before, I can all but guarantee you that Commerce will find that subsidies exist and I can bet you it will find dumping. The question really is going to be whether Boeing is injured (or threatened with injury). After reading the transcript over the weekend and shooting the breeze with my colleagues, I believe that there is a path to an affirmative finding - at the preliminary stage. I believe the final determination of injury is going to be much, much tougher.

This is kind of a case of first impressions for the Commission, and they're going to have to dig into Congress' intent of whether you can have injury (or threat) where you've not had an entry of goods, but where you've certainly have had a sale. The Commission will also have to assess whether Boeing, with a massive backlog, can possibly be injured, whether Boeing willfully exited this market by not producing the -700 or the 717 to any meaningful extent, and whether Boeing's definition of what constitutes the industry (100-150 seat jets with a range of at least 2900 miles) is the proper industry to be assessed. Bombardier complained at length that the proposed scope was written to eliminate comparisons to the E-195 E2s. I believe that is a very valid complaint and the Commission has the right to expand what is called the "like product" to assess whether harm exists.



I strongly disagree with the notion that Boeing has no personal interest. They believe that that they have a very strong personal interest. From their perspective, they're trying to avoid Airbus II. I'd implore you to avoid references to politics. Trade cases are strategic business decisions and while there have been lots of run of the mill cases, there have been very sensitive ones from time to time that cause extra controversy: vector super computers, printing presses, crude oil, soft wood lumber, solar modules, etc.

I basically made the point earlier that the only harm Boeing can even theoretically show , is potential harm from a stretch of the cs300....which is currently as real as the Easter bunny and would be two sizes larger than the model Delta wants.

Delta has said Boeing had no product in the size they wanted and were never being considered.

Yet even though they as much as admit they don't have a competitive product, they still claim harm now. Boeing might as well start whining about Honda in case they build a flying car that might hurt 737 sales.

As for these being strategic business decisions....sure, but they are just as much politics. the orange one was elected partly on his USA uber alles trade platforms. Trade wars can win elections....just ask the senators in Oregon.

Joe,

Is it too much to ask you to keep a minimum of objectivity in the comments? It is too childish to bring the Easter Bunny into the discussion.

Each aircraft is distinct in terms of capacity and range. It is not uncommon for US airlines to employ a varied mix of aircraft with between 100-190 passengers for the same domestic routes, so there is indirect competition between aircraft that you think are totally different.

Actually, the Easter Bunny is just as real as the CS500, at least at this moment, so the comparison stands...and that would be the plane that actually IS in competition with a Boeing product that actually sells.

In the sense that most aircraft carry passengers, sure, there is indirect competition between Boeing and BBD...but in actual competitions for sales, there really isn't any. Delta didn't then and doesn't now, want any 737-7's...which is the closest Boeing has to the CS100....and it's not very close at all.

Boeing offered used E190's and 717's to Delta. Delta actually bought the 190's, soon realised that it wasn't cost effective to have a fleet of them, then promptly sold them. The 717's weren't available in the time frame Delta wanted.

Boeing didn't offer any of their new aircraft to Delta, so there actually was exactly no competition between Boeing and BBD.

How's that for objectivity?

This is simple, Boeing should pay an exorbitant price for Bombardier or clean sheet an alternative to the C -Series. How much are they going to crap their pants with the E2s coming as well.

If Boeing sold the C Series and introduced larger versions, they'd sell like crazy. Allowing them to keep the Quebec line and either convert or open a new line in the States and or Europe/Asia.

Have Mitsubishi drop the MRJ or partner with converting it to a CRJ replacement for a greater roll in a clean sheet MOM.

The last Leeham article reveals indirectly that Boeeing has an uncompetitive plane with the 737 in a few years to come.
It is time to open the pocket and tell the shareholders 'Musk-wise' - that capital nvestment is first before you can do an earning.

Time to develop a new Plane! Not sure if the MOM is the best to spend this money.


Flyglobal

jalarner wrote:

I almost think that is exactly what Boeing wants to do, but so it can buy Bombardier. Think about it...get all the info you need, confirmed in court, lawyers, etc., drain company resources and maybe even drag down the share price, and poof...buy the company, and develop a CS500/700 as 737 replacement. Keep the line open and a new line in WA for the bigger derivatives.

I am not in the aviation industry, but stuff like this happens in my specialty manufacturing business I do sales/proposals with.

GE did it with Alstom.

iamlucky13 wrote:

scbriml wrote:

Remember that the WTO found the A380/777X/A350 subsidies/taxes to be illegal, yet Boeing and Airbus are not paying a penny. The WTO is not a courthouse.

This isn't the WTO. The US Trade Comission can act unilaterally and levy a countervailing duty on imports of the CSeries. This tax would be borne by the importer, i.e. the airline, and likely triggering what's known as an "adverse material change" clause in the contract and cause the deal to fall apart. This would effectively block imports of the CSeries unless the pricing is increased, or the duty paid.

That would be the likely action, but it can't be taken unilaterally, as far as I know, unless you simply mean without Canada's approval.

Maybe I'm missing something, but my understanding is if the US Trade Commission acts without a similar finding from the WTO, the US will be in violation of the General Agreement on Trades and Tariffs, and therefore would jeopardize the protection against other countries taking similar unilateral action arbitrarily against US products. Treaties generally only work if both sides uphold them.

Both WTO and Trade Commission cases would be part of the process because, as pointed out, the WTO can't do much. They can issue a ruling that dumping occurred, but that doesn't obligate the US to do anything. The US needs to act to enact the actual penalty.[/quote]

OK, time for Trade Law 101.

In order for antidumping and/or countervailing duties to be imposed, an industry must show that it is injured or threatened with injury by import of goods that been found to be dumped or subsidized.

In order for a industry in the USA to get trade relief, it must petition the U.S. government through two federal agencies - the U.S. Department of Commerce and the U.S. International Trade Commission. The two agencies have interrelated but distinct purposes....The Commerce Department assesses whether producers in the foreign country have been dumping subject merchandise in the United States. If there is dumping and/or subsidization, the Trade Commission will make a determination if those dumped/subsidized imports are injuring threatening to cause injury to the U.S. domestic industry. The injury or threat must be material and there must be some linkage between injury to the United States industry and the imports (i.e., causation). The imports don't have to be the only cause of harm, but instead -a- cause of harm. Additionally, the harm must be more than inconsequential or immaterial. That is statutory language.

Currently, the Trade Commission is assessing whether there is reason to believe or suspect that injury is occurring or threat of injury is present. The Commission, through its normally six commissioners (currently there are four) will make a determination 45 days after the petitions were filed. The reason to believe or suspect standard is extremely low and any major issues that are unresolved at the preliminary vote must result in a preliminary affirmative determination (courtesy of a case called American Lamb). With four votes, you only need two votes to go affirmative.

Assuming the ITC goes affirmative, the action switches to the Commerce Department which will assess the level of dumping and subsidization. They will ask Bombardier, the GOC and the GOQ a long series of questions and questionnaire responses. Provided that Commerce makes an affirmative preliminary finding of dumping and/or subsidies, the agency will instruct the Customs and Border Protection agency (CBP) to start collecting duties on any entries. The Commission then re-commences its final phase investigation and the standard for injury is higher. If Commerce makes a final dumping/subsidy finding that is affirmative, and the Commission makes a final affirmative injury/threat finding, then Commerce will issue an antidumping and/or countervailing duty order and will instruct CBP to continue to collect duties on any entry of goods from Canada. The importer pays the duties and a foreign producer is legally barred from reimbursing the importer the duties paid.

This entire process will take about 13 months provided everything goes affirmative. Orders are allowed to remain in place for at least five years and are renewable under the "sunset" mechanism which requires new hearings covering the likelihood or recurrence of injury or threat.

Like any federal decision, the decisions of Commerce and the Commission can be appealed - to the Court of International Trade. The litigation appeals process takes at least 18 months and assuming that there are "remands" and redeterminations and appeals to the Federal Circuit (the federal appeals court with jurisdiction over the CIT) can make litigation drag on for 3 to 5 additional years - or even longer. I dealt with one case where the finality was not reached until nearly eight years after the initial decision was handed down by Commerce.

At the same time, the Canadians can appeal the Commerce/ITC decision to the WTO dispute panel. This process takes two two three years. Appeals of the dispute panel are permitted and go to the Appellate Body which takes around a year. So even though Bombardier might win, its going to take four years - which means the market is disrupted for that period of time....

A complicated process that is costly but can have major marketplace effects...

iamlucky13 wrote:

scbriml wrote:

DL's perspective on this is interesting...

https://leehamnews.com/2017/05/23/delta ... more-23479

“I want to be clear that Boeing is not competing for new orders when we were negotiating with Bombardier,” testified Greg May, SVP of Supply Chain Management and Fleet Strategy. “Boeing had no viable competitive alternatives to the CS100. We were not even considering any new Boeing product as an alternative when we made the purchase that Boeing challenges in the petition.”

Interesting indeed. I expected Delta would make some efforts to support Bombardier's side of the case at a minimum to protect their order, but I didn't expect them to essentially argue, "Boeing is full of hot air, and this petition is nonsense."

Delta appears to have just kicked the legs out from under the requirement to prove harm. I wonder if that pretty much kills the case or if Boeing has a substantive counter-argument, because the response mentioned in the Leeham article certainly wasn't substantive.

wrongwayup wrote:

KarelXWB wrote:

The WTO can't do much.

Remember that the WTO found the A380/777X/A350 subsidies/taxes to be illegal, yet Boeing and Airbus are not paying a penny. The WTO is not a courthouse.

This isn't the WTO. The US Trade Comission can act unilaterally and levy a countervailing duty on imports of the CSeries. This tax would be borne by the importer, i.e. the airline, and likely triggering what's known as an "adverse material change" clause in the contract and cause the deal to fall apart. This would effectively block imports of the CSeries unless the pricing is increased, or the duty paid.

That would be the likely action, but it can't be taken unilaterally, as far as I know, unless you simply mean without Canada's approval.

Maybe I'm missing something, but my understanding is if the US Trade Commission acts without a similar finding from the WTO, the US will be in violation of the General Agreement on Trades and Tariffs, and therefore would jeopardize the protection against other countries taking similar unilateral action arbitrarily against US products. Treaties generally only work if both sides uphold them.

Both WTO and Trade Commission cases would be part of the process because, as pointed out, the WTO can't do much. They can issue a ruling that dumping occurred, but that doesn't obligate the US to do anything. The US needs to act to enact the actual penalty.

Pretty normal for major importers and purchasers to say "BS" to any petition filing. This is after all a commercial decision with major tax/duty implications....

washingtonflyer wrote:

OK, time for Trade Law 101.

Thank you for the additional info!

I'm not sure what happened with the quotes there. Is it possible for a mod to fix it so there's clear delineation between my partially informed input and washingtonflyer's excellent clarification?

Outspoken analyst Richard Aboulafia is looking at possible fall out of the current Boeing - Bombardier - Delta - US & Canadian Governments battle.

He thinks it's a very political one, he looks at :
The bigger picture
Second Order Effects
Risk-Reward Ratios

If it wins this complaint, that would be a tactical victory. And a big strategic mistake.

If even Richard disagrees with Boeing strategy, maybe they should be careful.

http://www.richardaboulafia.com/shownote.asp?id=520

keesje wrote:

Outspoken analyst Richard Aboulafia is looking at possible fall out of the current Boeing - Bombardier - Delta - US & Canadian Governments battle.

He thinks it's a very political one, he looks at :
The bigger picture
Second Order Effects
Risk-Reward Ratios

If it wins this complaint, that would be a tactical victory. And a big strategic mistake.

If even Richard disagrees with Boeing strategy, maybe they should be careful.

http://www.richardaboulafia.com/shownote.asp?id=520

Very interesting read! Thanks for sharing here. Most interesting takeaway for me was:

Open borders are good for Boeing. Trade barriers and a series of retaliatory trade actions are toxic. This, by the way, is another reason for Boeing to re-think its bizarre support of the Border Adjustment Tax.

Of course, the counter to this is that Boeing is playing the long game, and that whatever consequences might happen in the short to medium term, they are still outweighed by the (hopeful) destruction of a possible major future competitor.

In order for antidumping and/or countervailing duties to be imposed, an industry must show that it is injured or threatened with injury by import of goods that been found to be dumped or subsidized.

....which has been my point all along. Boeing can show neither that they have been injured by the sale to Delta, nor that the sale can harm them in the future...unless politics rears its head to give the local boys a win.

As Delta has testified, no Boeing aircraft was ever being considered in competition with the CS100, since they don't even make an aircraft that comes close to the specs required by Delta.

Of the aircraft that were offered, Delta actually did buy the used, former AC, E190's, but quickly sold them. The other aircraft offered by Boeing were 717's which Boeing couldn't even provide in the required time frame.

The hyperbole Boeing has used is laughable. They are claiming that the CS100 sale to Boeing puts the entire company in jeopardy....that the sale will render them unable to come up with the cash to upgrade and develop future aircraft...what with them only having 25 billions dollars of cash on hand over the next decade, and they have the president of the US directly involved in selling Boeing aircraft overseas.

I mean....they only have a 5 year backlog of the 737....how could they possibly survive with that?

Boeing admitted that they really aren't being harmed by this particular sale, but by the potential of a larger aircraft which would compete directly with their money makers...a plane that not only hasn't been developed, but BBD has repeatedly stated that they are not working on for the foreseeable future.

So their entire case is based on potential harm, at some undefined point in the future, by a BBD product that doesn't now, and may never exist.

That this farce has even gone this far, is another indictment of a very broken system.

Canada better grow some balls and start fighting back. I know trade wars have no winners but Canada is losing by default. I would start with cancelling the potential Boeing F-18 order and then move on to the massively subsidized U.S. agriculture industry.

Skywatcher wrote:

Canada better grow some balls and start fighting back. I know trade wars have no winners but Canada is losing by default. I would start with cancelling the potential Boeing F-18 order and then move on to the massively subsidized U.S. agriculture industry.

Me thinks this is already starting to happen. http://ottawacitizen.com/news/national/ ... e-escalate

Cyow wrote:

Me thinks this is already starting to happen. http://ottawacitizen.com/news/national/ ... e-escalate

In a room in Chicago ...
Fatcat A: "We lost a $2 billion deal at DL. We've gotta fix this. Launch the complaint."
Fatcat B: "Hang on a sec, there's a $5 billion deal for the CF-18s and the associated maintenance contracts. We might lose them."
Fatcat A: "Naah, they won't dare. There's no one else. We have it in the bag."
Fatcat B: "Yeah, you're proabably right. Launch the compliant."

I hope Canada kicks BA in the nuts just for the hubris.

golfradio wrote:

Cyow wrote:

Me thinks this is already starting to happen. http://ottawacitizen.com/news/national/ ... e-escalate

In a room in Chicago ...
Fatcat A: "We lost a $2 billion deal at DL. We've gotta fix this. Launch the complaint."
Fatcat B: "Hang on a sec, there's a $5 billion deal for the CF-18s and the associated maintenance contracts. We might lose them."
Fatcat A: "Naah, they won't dare. There's no one else. We have it in the bag."
Fatcat B: "Yeah, you're proabably right. Launch the compliant."

I hope Canada kicks BA in the nuts just for the hubris.

Here here! I love BA widebodies, but they need to lay off Bombardier. If Cseries is such a threat to them, they should start their own clean sheet design, not rehashing a design every decade for the last 40 years.

Cyow wrote:

Skywatcher wrote:

Canada better grow some balls and start fighting back. I know trade wars have no winners but Canada is losing by default. I would start with cancelling the potential Boeing F-18 order and then move on to the massively subsidized U.S. agriculture industry.

Me thinks this is already starting to happen. http://ottawacitizen.com/news/national/ ... e-escalate

Kind of ironic that halfway down that page there is a Boeing add that says " Find out how Boeing is Canada commited"

Ab345 wrote:

Cyow wrote:

Skywatcher wrote:

Canada better grow some balls and start fighting back. I know trade wars have no winners but Canada is losing by default. I would start with cancelling the potential Boeing F-18 order and then move on to the massively subsidized U.S. agriculture industry.

Me thinks this is already starting to happen. http://ottawacitizen.com/news/national/ ... e-escalate

Kind of ironic that halfway down that page there is a Boeing add that says " Find out how Boeing is Canada commited"

Hahaha - nice catch! total FAIL Boeing.

Boeing doesn't like Seattle
Boeing doesn't like its machinists
Boeing doesn't like its engineers
so what's new?
Boeing doesn't like its customers

Boeing needs to mind it's own business, and literally. Boeing should be investigated for fleecing tax payers for overpriced product, and corporate welfare tax breaks. Perhaps this might be enough to piss Delta off, and maybe even get more C Series orders from Delta. The C Series is going to be a big part of Delta, as it is a perfect replacement for the DC-9.

So, if Bombardier price dumped, good for them. It's competition, and a sure bet to attract a buyer. Good for Bombardier, and I wish them success on this magnificent airplane.

I just read on the Globe & Mail business website that the F-18 order will not be taken up by the Canadian military. Good-I hope they can explain the loss of a $5 billion order to their stakeholders in favourable way.

Skywatcher wrote:

I just read on the Globe & Mail business website that the F-18 order will not be taken up by the Canadian military. Good-I hope they can explain the loss of a $5 billion order to their stakeholders in favourable way.

That's interesting...

Without getting too off topic...

https://sencanada.ca/content/sen/commit ... INAL_e.pdf
(100+ page report, VERY interesting reading...and....submarines?!?!)

**EDIT** - page 12 of report recommends cancelling interim purchase, and that a fighter jet competition take place with a decision made by June 30 2018.

11 May 2017 Senate report for Canadian Forces. In brief and airforce highlights only, the following are recommended
-120 jets to replace CF-18
-replace air refueling tankers
-replace CH-146 with military medium-heavy-lift helicopters
-increase heavy-lift (currently less than 2 year old CH-146F) to a fleet of 36
-add fleet of 24 attack helicopters
-add UAV's

Let's see...F-18, 767 tanker, Chinook, Apache, maybe more.... that's a lot for Boeing to loose. I'm sure EADS would trade in the Chinooks to provide a single standard fleet, they could provide A330MRTT and fill the rest of the fleet requirements well.

The sad part about this is that this is the way that all trade wars go. Everybody loses (less choice/distorted prices/delays/job displacements etc.). Well-Boeing started it-I hope they suffer along with the people they were aiming their crosshairs at. Of course they'll spin it positively but I don't see any "winners" here.
Glad I sold my Boeing stock-I wonder about their management.

Skywatcher wrote:

The sad part about this is that this is the way that all trade wars go. Everybody loses (less choice/distorted prices/delays/job displacements etc.). Well-Boeing started it-I hope they suffer along with the people they were aiming their crosshairs at. Of course they'll spin it positively but I don't see any "winners" here.
Glad I sold my Boeing stock-I wonder about their management.

When did you sell their stock? The same mgmt has seen the stock up in last Day, Week, Month, Year, 5years.... not sure "glad" is the right word for a stock that is up nearly 70% in 12 months.

Not really any metrics that show Boeing is a poorly performing or run company.

airzona11 wrote:

Skywatcher wrote:

The sad part about this is that this is the way that all trade wars go. Everybody loses (less choice/distorted prices/delays/job displacements etc.). Well-Boeing started it-I hope they suffer along with the people they were aiming their crosshairs at. Of course they'll spin it positively but I don't see any "winners" here.
Glad I sold my Boeing stock-I wonder about their management.

When did you sell their stock? The same mgmt has seen the stock up in last Day, Week, Month, Year, 5years.... not sure "glad" is the right word for a stock that is up nearly 70% in 12 months.

Not really any metrics that show Boeing is a poorly performing or run company.

Boeing aggressive action, using every tool available, against labor, taxes, subsidies...(for others), and competition are part of what have made Boeing stock a good investment.

In this case though, it may very well come back to bite them on the butt. Even the 500 pound gorilla can die the death of a thousands cuts.

airzona11 wrote:

Skywatcher wrote:

The sad part about this is that this is the way that all trade wars go. Everybody loses (less choice/distorted prices/delays/job displacements etc.). Well-Boeing started it-I hope they suffer along with the people they were aiming their crosshairs at. Of course they'll spin it positively but I don't see any "winners" here.
Glad I sold my Boeing stock-I wonder about their management.

When did you sell their stock? The same mgmt has seen the stock up in last Day, Week, Month, Year, 5years.... not sure "glad" is the right word for a stock that is up nearly 70% in 12 months.

Not really any metrics that show Boeing is a poorly performing or run company.

I sold in 2009. Now that I look at their performance since then I'm shocked that the shares are up so much. What are they so afraid of? They are massively larger than BBD. Why would they blow a 5 billion order to maybe stop a relatively immaterial 75 aircraft order that will harm many of their customers/suppliers?

Skywatcher wrote:

airzona11 wrote:

Skywatcher wrote:

The sad part about this is that this is the way that all trade wars go. Everybody loses (less choice/distorted prices/delays/job displacements etc.). Well-Boeing started it-I hope they suffer along with the people they were aiming their crosshairs at. Of course they'll spin it positively but I don't see any "winners" here.
Glad I sold my Boeing stock-I wonder about their management.

When did you sell their stock? The same mgmt has seen the stock up in last Day, Week, Month, Year, 5years.... not sure "glad" is the right word for a stock that is up nearly 70% in 12 months.

Not really any metrics that show Boeing is a poorly performing or run company.

I sold in 2009. Now that I look at their performance since then I'm shocked that the shares are up so much. What are they so afraid of? They are massively larger than BBD. Why would they blow a 5 billion order to maybe stop a relatively immaterial 75 aircraft order that will harm many of their customers/suppliers?

Without being employed by Boeing I am not privy to that answer. However since you sold the stock, it is up 4-5x. That is about as all-star performance as you can get in a stock.

I think there are a lot of emotional responses on this thread. Numbers and reality point to Boeing being a very well run company. Quite a few posts blurring competition with nationalism. This is Boeing vs Bombardier, not the US vs Canada.

Maybe the $5 billion is a lot of money, or maybe Boeing sees a competitor that is on life support or close to it. I personally love the CRJ/ Dash8s, but the ATRs and EMBs are winning lots of business. Their biz jet operation is slowing production. The CSeries is a product threat and they are using established avenues to make disputes.

Most importantly, after all, if Bombardier is not doing anything wrong then they should be fine. If Boeing is as egregious as some on here suggest, why not counter sue? Boeing doesn't have a monopoly on the litigation.

airzona11 wrote:

I think there are a lot of emotional responses on this thread. Numbers and reality point to Boeing being a very well run company. Quite a few posts blurring competition with nationalism. This is Boeing vs Bombardier, not the US vs Canada.

Maybe the $5 billion is a lot of money, or maybe Boeing sees a competitor that is on life support or close to it. I personally love the CRJ/ Dash8s, but the ATRs and EMBs are winning lots of business. Their biz jet operation is slowing production. The CSeries is a product threat and they are using established avenues to make disputes.

Most importantly, after all, if Bombardier is not doing anything wrong then they should be fine. If Boeing is as egregious as some on here suggest, why not counter sue? Boeing doesn't have a monopoly on the litigation.

Actually, Boeing exactly made this US vs Canada when they took their complaint to the commerce department.

As for BBD having nothing to fear if they have done nothing wrong...if that was the case, then this idiotic action never would have gotten to the point of official hearings. Just read Boeing's hyperbolic closing statements. They make it sound like not only is the CSeries loaded with nukes and headed for Renton, but they are torturing kittens, burning American flags and stealing apple pies, while they do it...and in the new trumpian reality of 'alternative facts', the truth need not apply.

JoeCanuck wrote:

airzona11 wrote:

I think there are a lot of emotional responses on this thread. Numbers and reality point to Boeing being a very well run company. Quite a few posts blurring competition with nationalism. This is Boeing vs Bombardier, not the US vs Canada.

Maybe the $5 billion is a lot of money, or maybe Boeing sees a competitor that is on life support or close to it. I personally love the CRJ/ Dash8s, but the ATRs and EMBs are winning lots of business. Their biz jet operation is slowing production. The CSeries is a product threat and they are using established avenues to make disputes.

Most importantly, after all, if Bombardier is not doing anything wrong then they should be fine. If Boeing is as egregious as some on here suggest, why not counter sue? Boeing doesn't have a monopoly on the litigation.

Actually, Boeing exactly made this US vs Canada when they took their complaint to the commerce department.

As for BBD having nothing to fear if they have done nothing wrong...if that was the case, then this idiotic action never would have gotten to the point of official hearings. Just read Boeing's hyperbolic closing statements. They make it sound like not only is the CSeries loaded with nukes and headed for Renton, but they are torturing kittens, burning American flags and stealing apple pies, while they do it...and in the new trumpian reality of 'alternative facts', the truth need not apply.

I will repeat what I said above. If everything you are referring to is alternative facts, then they will be fine in the court of law. Nice try with the hyberbole tho. Nothing to worry about if they are not guilty. Trump did not bring this suit. Boeing did.

As for the commerce department, what other court would you suggest Boeing bring their grievances?

JoeCanuck wrote:

In order for antidumping and/or countervailing duties to be imposed, an industry must show that it is injured or threatened with injury by import of goods that been found to be dumped or subsidized.

....which has been my point all along. Boeing can show neither that they have been injured by the sale to Delta, nor that the sale can harm them in the future...unless politics rears its head to give the local boys a win.

Boeing made their case and Bombardier made their response. The consensus around the bar is that Boeing has a shot at the preliminary phase - especially with the legal standard that applies to preliminary determinations.

JoeCanuck wrote:

As Delta has testified, no Boeing aircraft was ever being considered in competition with the CS100, since they don't even make an aircraft that comes close to the specs required by Delta.

Of the aircraft that were offered, Delta actually did buy the used, former AC, E190's, but quickly sold them. The other aircraft offered by Boeing were 717's which Boeing couldn't even provide in the required time frame.

The hyperbole Boeing has used is laughable. They are claiming that the CS100 sale to Boeing puts the entire company in jeopardy....that the sale will render them unable to come up with the cash to upgrade and develop future aircraft...what with them only having 25 billions dollars of cash on hand over the next decade, and they have the president of the US directly involved in selling Boeing aircraft overseas.

Boeing is arguing that the real threat comes from the CS-300 which has been ordered and Delta has an option to exercise to upgauge to the CS-300.

JoeCanuck wrote:

I mean....they only have a 5 year backlog of the 737....how could they possibly survive with that?

Boeing admitted that they really aren't being harmed by this particular sale, but by the potential of a larger aircraft which would compete directly with their money makers...a plane that not only hasn't been developed, but BBD has repeatedly stated that they are not working on for the foreseeable future.

They've argued that they'be been harmed by it and that it affected the United -700 sale. I'm surprised you say the 300 has not been developed. Its been tested and delivered.

JoeCanuck wrote:

So their entire case is based on potential harm, at some undefined point in the future, by a BBD product that doesn't now, and may never exist.

They're allowed to make threat arguments. And, the -300 exists and has been delivered.

JoeCanuck wrote:

That this farce has even gone this far, is another indictment of a very broken system.

I'd argue that the system at the Commission works rather well. Cases like these (and printing presses and vector super computers) are complex and test the limits of the statutory authority of the Commission,

JoeCanuck wrote:

airzona11 wrote:

I think there are a lot of emotional responses on this thread. Numbers and reality point to Boeing being a very well run company. Quite a few posts blurring competition with nationalism. This is Boeing vs Bombardier, not the US vs Canada.

Maybe the $5 billion is a lot of money, or maybe Boeing sees a competitor that is on life support or close to it. I personally love the CRJ/ Dash8s, but the ATRs and EMBs are winning lots of business. Their biz jet operation is slowing production. The CSeries is a product threat and they are using established avenues to make disputes.

Most importantly, after all, if Bombardier is not doing anything wrong then they should be fine. If Boeing is as egregious as some on here suggest, why not counter sue? Boeing doesn't have a monopoly on the litigation.

Actually, Boeing exactly made this US vs Canada when they took their complaint to the commerce department.

As for BBD having nothing to fear if they have done nothing wrong...if that was the case, then this idiotic action never would have gotten to the point of official hearings. Just read Boeing's hyperbolic closing statements. They make it sound like not only is the CSeries loaded with nukes and headed for Renton, but they are torturing kittens, burning American flags and stealing apple pies, while they do it...and in the new trumpian reality of 'alternative facts', the truth need not apply.

Under the law here in the US, Boeing has made its prima facie case for initiation. The legal standard for initiation at Commerce is very low - just as it is at CBSA or the EU trade tribunal or SECEX in Brazil.

The Commission will always institute an investigation unless there is an inherent filing defect that renders a filing so deficient that the agency is procedurally barred from instituting.

No defect exists - either at Commerce or at the Commission.

".....Actually, Boeing exactly made this US vs Canada when they took their complaint to the commerce department.

As for BBD having nothing to fear if they have done nothing wrong...if that was the case, then this idiotic action never would have gotten to the point of official hearings. Just read Boeing's hyperbolic closing statements. They make it sound like not only is the CSeries loaded with nukes and headed for Renton, but they are torturing kittens, burning American flags and stealing apple pies, while they do it...and in the new trumpian reality of 'alternative facts', the truth need not apply....."

JoeCanuck, you insist on getting away from the facts and picking up the most absurd arguments (now nukes!!). You may not know it, but investigations like this are commonplace, affecting dozens of companies and industry branches. Simple as that.

washingtonflyer wrote:

Boeing is arguing that the real threat comes from the CS-300 which has been ordered and Delta has an option to exercise to upgauge to the CS-300.

Well they don't have much of a case there either if that's what they are claiming. Their only competitor to that, the 737-7, is one only two airlines in the world want and at that tPalme of the orders have been converted into other planes. The CS300 is smaller, less capable, but far more efficient and desirable. The 737-7 is designed and will be used for a different set of missions than the CS300. In other words, Boeing does not have a serious competitor to the CS300, so it must be the Easter Bunny CS500 that they are afraid of.

Nean1 wrote:

".....Actually, Boeing exactly made this US vs Canada when they took their complaint to the commerce department.

As for BBD having nothing to fear if they have done nothing wrong...if that was the case, then this idiotic action never would have gotten to the point of official hearings. Just read Boeing's hyperbolic closing statements. They make it sound like not only is the CSeries loaded with nukes and headed for Renton, but they are torturing kittens, burning American flags and stealing apple pies, while they do it...and in the new trumpian reality of 'alternative facts', the truth need not apply....."

JoeCanuck, you insist on getting away from the facts and picking up the most absurd arguments (now nukes!!). You may not know it, but investigations like this are commonplace, affecting dozens of companies and industry branches. Simple as that.

But that's pretty much what they're doing especially when you look at what DL had to say about all of if.

Does anyone remember Delta Airlines criticism of the alleged state subsidies received by Middle Eastern competitors?
Coherence sometimes is a luxury ..

Let me do the math here....Boeing loses a likely $5 billion order and will be excluded from any military sales to Canada for a generation. Bombardier may lose a $2.25 billion order (75 x $30 million each-likely less) and possibly any future American orders. Any C-series cancellations would probably help Embraer.
How are there any winners here?
If Boeing wins would the ruling affect any future non-U.S. business?

I wonder if Delta will actually be upset or be happy if they can get a better deal from Boeing if the C-series order is cancelled.

sanjet wrote:

I wonder if Delta will actually be upset or be happy if they can get a better deal from Boeing if the C-series order is cancelled.

But since Boeing don't make anything in the CS100 size range, what possible deal could they offer to replace Delta's order for these? 73Gs with a lifetime subsidy to compensate Delta for flying more seats than they want around in a less economic plane? Suddenly produce a 737MAX6 ?

It just dawned on me that maybe Boeing launched the lawsuit to put pressure on the Canadian government to order the F-18's. If so, the lawsuit would be dropped?

Skywatcher wrote:

It just dawned on me that maybe Boeing launched the lawsuit to put pressure on the Canadian government to order the F-18's. If so, the lawsuit would be dropped?

Besides the fact that negotiating in such a fashion would most likely be illegal, Trudeau's government has stopped all talks with Boeing about Super Hornets, so I would say it backfired if that was the plan

washingtonflyer wrote:

Boeing is arguing that the real threat comes from the CS-300 which has been ordered and Delta has an option to exercise to upgauge to the CS-300.

From what I understand, Boeing has also been arguing about a potential stretch of the CS300 (CS500).

Source: Leeham (https://leehamnews.com/2017/05/29/bomba ... ys-boeing/)

A quote from Boeing:

“If Bombardier’s practices are left unaddressed, it will continue to use highly distortive pricing to eliminate the 737 MAX 7 from the 100- to 150-seat market. Bombardier will then use the resulting profits and momentum to wield the forthcoming CS500 in the medium single-aisle market against the Boeing 737-800 and MAX 8. The cycle will repeat itself…,”

LockheedBBD wrote:

washingtonflyer wrote:

Boeing is arguing that the real threat comes from the CS-300 which has been ordered and Delta has an option to exercise to upgauge to the CS-300.

From what I understand, Boeing has also been arguing about a potential stretch of the CS300 (CS500).

Source: Leeham (https://leehamnews.com/2017/05/29/bomba ... ys-boeing/)

A quote from Boeing:

“If Bombardier’s practices are left unaddressed, it will continue to use highly distortive pricing to eliminate the 737 MAX 7 from the 100- to 150-seat market. Bombardier will then use the resulting profits and momentum to wield the forthcoming CS500 in the medium single-aisle market against the Boeing 737-800 and MAX 8. The cycle will repeat itself…,”

Two things wrong with the statement there. First of all, the 737-7 is a niche plane, not a competitive one and it's sort of destroying itself with how efficient it is compared to the various smaller narrow bodies around today. Boeing must very well know that there isn't much to eliminate there. And the other issue with their claim is that if the will continue to constantly sell below cost, how are they going to make profit as a result of that as they claim it would be?

767333ER wrote:

LockheedBBD wrote:

washingtonflyer wrote:

Boeing is arguing that the real threat comes from the CS-300 which has been ordered and Delta has an option to exercise to upgauge to the CS-300.

From what I understand, Boeing has also been arguing about a potential stretch of the CS300 (CS500).

Source: Leeham (https://leehamnews.com/2017/05/29/bomba ... ys-boeing/)

A quote from Boeing:

“If Bombardier’s practices are left unaddressed, it will continue to use highly distortive pricing to eliminate the 737 MAX 7 from the 100- to 150-seat market. Bombardier will then use the resulting profits and momentum to wield the forthcoming CS500 in the medium single-aisle market against the Boeing 737-800 and MAX 8. The cycle will repeat itself…,”

Two things wrong with the statement there. First of all, the 737-7 is a niche plane, not a competitive one and it's sort of destroying itself with how efficient it is compared to the various smaller narrow bodies around today. Boeing must very well know that there isn't much to eliminate there. And the other issue with their claim is that if the will continue to constantly sell below cost, how are they going to make profit as a result of that as they claim it would be?

If this is Boeing quote: How can this be Dumping price and gain a profit at the same time to launch a CS500
So either it is a sale at a loss, then it shouldn't make profits, or it is a big win and cash cow, but then it is not dumping.

Flyglobal

Flyglobal wrote:

767333ER wrote:

LockheedBBD wrote:

From what I understand, Boeing has also been arguing about a potential stretch of the CS300 (CS500).

Source: Leeham (https://leehamnews.com/2017/05/29/bomba ... ys-boeing/)

A quote from Boeing:

“If Bombardier’s practices are left unaddressed, it will continue to use highly distortive pricing to eliminate the 737 MAX 7 from the 100- to 150-seat market. Bombardier will then use the resulting profits and momentum to wield the forthcoming CS500 in the medium single-aisle market against the Boeing 737-800 and MAX 8. The cycle will repeat itself…,”

Two things wrong with the statement there. First of all, the 737-7 is a niche plane, not a competitive one and it's sort of destroying itself with how efficient it is compared to the various smaller narrow bodies around today. Boeing must very well know that there isn't much to eliminate there. And the other issue with their claim is that if the will continue to constantly sell below cost, how are they going to make profit as a result of that as they claim it would be?

If this is Boeing quote: How can this be Dumping price and gain a profit at the same time to launch a CS500
So either it is a sale at a loss, then it shouldn't make profits, or it is a big win and cash cow, but then it is not dumping.

Flyglobal

The point is: Boeing started the price war with dumping the 737-7 for UA, so Bombardier has no chance then to adjust around the Boeing pricing who themselves have to react to Boeing's dumping. The big Manufacturers have to accnowlede that the 737-7 6 Seater (and the A319 as well) is not anymore competitive against a 5-seater up to 150 pax.

Time for Boeing to open the pocket, lower Bonuses and share buy backs and invest in a new Narrowbody family.
The C-Series sits right in the middle of the 100-150 Seat Market. A kind of MOM for the small / mid Market.

Flyglobal

At current share prices they would be better off buying out Bombardier but if you as CEO and Board of Bombardier think the company is undervalued then Boeing would need to pay a huge premium.
Bombardier has a market capitalization of 6Bn. Microsoft bought linkedin for 26Bn. 6Bn isn't a large amount of money these days.

Even though they has messed Bombardier they could sugar them up and make the Canadian Government forget their outrage.
They say something like:
We'll give you enough money to stretch the CS300 toward 200 seats.
We'll give you enough money to stretch the Q400 to 96 seats and help re-engine it.
We'll introduce you in to our Customers.
We'll wipe out your debts/re-finance them with lower interest rates with bonds backed by Boeing.
We'll employ 100% more Canadians once those new models start rolling off the production line.

If they wanted to do this then they need to move soon as the Canadians are cosying up to the Chinese

Indeed for Boeing buying Bombardier they could easily have a Plane in the 100-170/180 seat market, avoiding to invest in the 737 successor and concentrate invenstments and ressources to the MOM.

Wonder if such a Bomberdier Buy wouldn't be attractive to Airbus as well. Somehow some of their talkes some 2 years ago failed. Anyone in the know why?


Flyglobal

The point is that nobody other than a coupe of airlines even want the 737-7/700. It's an inefficient, heavy, and suboptimal product. If Boeing can't compete there then they need to either cede that part of the market and take the fight to 737-8 or they need to finally break out the check book and do some innovation in thier narrowbody product line for a change.