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Jayafe
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 2:44 pm

EMBSPBR wrote:
The sale to Delta Air Lines was announced on April 28, 2016.
Since then, no other order has been announced.


Boeing's lawsuit might have something to do with that....
 
washingtonflyer
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 2:50 pm

mjoelnir wrote:
washingtonflyer wrote:
SomebodyInTLS wrote:

If I understand correctly, according to the WTO rules they could impose tariffs on anything they like as a countermeasure if they won this type of proceedings... time to file a case there?


No. Retaliatory measures are not permitted unless the WTO would approve them - after about 5 to 7 years of litigation through the dispute panel and the appellate body.


That is when you bother about what the WTO thinks. The USA has not a proud history in bothering what international organisations think. Why should the USA than expect others to respect international agreements?


US government conforms trade decisions base on WTO rulings all the time. "Zeroing" is a prime example of this. They are called Section 129 determinations and there are plenty of them.

http://enforcement.trade.gov/download/s ... index.html

mjoelnir wrote:
Have a look at the soft wood dispute between the USA and Canada, I do not see the WTO decision there, only NAFTA was invoved. I also do not see the WTO case regarding the C series allowing the USA to put the 219% tax/duty on those products.


Actually, yes there was a WTO decision on lumber.

https://www.wto.org/english/tratop_e/di ... s257_e.htm
 
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EMBSPBR
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 2:53 pm

Jayafe wrote:
EMBSPBR wrote:
The sale to Delta Air Lines was announced on April 28, 2016.
Since then, no other order has been announced.


Boeing's lawsuit might have something to do with that....


No really.
I think you are missing something here.
Source: https://leehamnews.com/2017/04/27/boein ... series-us/

April 27, 2017, © Leeham Co.: The Boeing Co. late today filed a petition with the US government, charging Bombardier with “dumping” the CSeries in its deal last year with Delta Air Lines for 75+50 CS100s.
 
washingtonflyer
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 2:54 pm

KarelXWB wrote:
fpetrutiu wrote:
Will this affect the DL order? will now DL need to be looking at canceling that order and look for other aircraft? Are previous orders subject to these tariffs? I can't imagine this will seat well with DL and also for any top-off orders that they might need...


DL is confident the final outcome will be positive:

Delta says CSeries ruling is just preliminary, confident that USITC will conclude that no U.S. manufacturer is at risk


https://twitter.com/ReutersAero/status/ ... 2607204352

The import tariff doesn't apply until the final decision has been made.


Kind of. If there is an entry in the next six months ago, Delta would have to put a cash deposit or bond on hold with USCBP equal to the duties. However, as I mentioned earlier, the ITC prelim determination was a threat vote and reason would stand that if the ITC final vote is affirmative, it would also be threat.

Those deposits on hold through the date of the vote would get refunded.
 
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YULspotter
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 2:57 pm

Quote below from a news conference from the Premiere of Quebec this morning. So are deliveries of Air Canada B737MAXs slated for next year in jeopardy? That will depend on the Canadian Federal government but the door has just been opened.

""Not a bolt, not a part, (and) of course not a plane from Boeing (should be) entering Canada until this conflict is resolved in a satisfactory way,"

Source: http://montreal.ctvnews.ca/take-hard-li ... -1.3608295

In addition, from talking to people and reading various message boards (not just aviation ones), it's pretty clear that many Canadian's are furious this morning. Considering the absurdly high duty of 219%, they don't just see this as an attack on Bombardier, but as an attack on Canada itself and Canadian jobs. US-Canada relations are going to take a beating over this.

YULspotter
 
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hOMSaR
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:04 pm

chiawei wrote:
Bombardier has over $5 billion in direct handout from Canadian government since 2000 and has paid $0 back.

It's actually costing every single Canadian tax payer $500,000.


Are you saying there are only 10,000 taxpayers in all of Canada (a country with a population of 36 million)?
I was raised by a cup of coffee.
 
Strato2
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:05 pm

CX747 wrote:
Glad to see some progress made against illegal subsidies. I'm sure Boeing calculated the long term risk and went forward. You can't allow another company to get it's place at the table with government backing like Airbus.


You do realise Boeing gets massive handouts from the US government in the form of astronomical military spending in the U.S of A that guarantees huge orders for Boeing defense business like KC-46.
 
bigjku
Posts: 1906
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:08 pm

YULspotter wrote:
Quote below from a news conference from the Premiere of Quebec this morning. So are deliveries of Air Canada B737MAXs slated for next year in jeopardy? That will depend on the Canadian Federal government but the door has just been opened.

""Not a bolt, not a part, (and) of course not a plane from Boeing (should be) entering Canada until this conflict is resolved in a satisfactory way,"

Source: http://montreal.ctvnews.ca/take-hard-li ... -1.3608295

In addition, from talking to people and reading various message boards (not just aviation ones), it's pretty clear that many Canadian's are furious this morning. Considering the absurdly high duty of 219%, they don't just see this as an attack on Bombardier, but as an attack on Canada itself and Canadian jobs. US-Canada relations are going to take a beating over this.

YULspotter


Right...so a Canadian company has been found to have operated in violation of a rule it needs to follow if it wants to sell to the US and corrective action applied under a law designed to protect US jobs from exactly the kind of state sponsored enterprises BBD now is.

The Canadian response is to basically insult the legal process in the US and question it’s legitimacy.

Essentially the complaint seems to boil down to this...

“Yes we know it was against the rules to do what we did but it doesn’t take that many jobs from you right this second and we really want to do this so stop telling us to follow the rules.”

I mean I guess US workers and businesses should be ok with it so long as they are only getting worked over a little? I mean if you only take $5 from me should I really be mad? After all you really wanted it and your kids needed it to eat right? So it’s fine?
 
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GCT64
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:09 pm

The UK government seems mightily unhappy with Boeing. I think somehow, somewhere, it is going to make them pay a price for this. Lots of negative press / statements about Boeing here today.

e.g. "Boeing's trade dispute with Bombardier "could jeopardise" its defence contracts with the UK government, the UK's defence secretary has warned. Sir Michael Fallon made the comments after the US opted to impose a tax on the C-Series jet made by Bombardier."
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Jayafe
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:12 pm

bigjku wrote:
Right...so a Canadian company has been found to have operated in violation of a rule it needs to follow if it wants to sell to the US and corrective action applied under a law designed to protect US jobs from exactly the kind of state sponsored enterprises BBD now is.

The Canadian response is to basically insult the legal process in the US and question it’s legitimacy.

Essentially the complaint seems to boil down to this...

“Yes we know it was against the rules to do what we did but it doesn’t take that many jobs from you right this second and we really want to do this so stop telling us to follow the rules.”

I mean I guess US workers and businesses should be ok with it so long as they are only getting worked over a little? I mean if you only take $5 from me should I really be mad? After all you really wanted it and your kids needed it to eat right? So it’s fine?


viewtopic.php?f=3&t=1361667&start=800#p19845025
 
bigjku
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:12 pm

GCT64 wrote:
The UK government seems mightily unhappy with Boeing. I think somehow, somewhere, it is going to make them pay a price for this. Lots of negative press / statements about Boeing here today.

e.g. "Boeing's trade dispute with Bombardier "could jeopardise" its defence contracts with the UK government, the UK's defence secretary has warned. Sir Michael Fallon made the comments after the US opted to impose a tax on the C-Series jet made by Bombardier."


I would say the UK obejection has he same basis as the Canadian one. We know it was wrong but we really want the jobs that go with it. Can’t you take one for the team? I even saw a ludicrous suggestion this could undermine the Irish Peace.
 
Bobloblaw
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:13 pm

Strato2 wrote:
CX747 wrote:
Glad to see some progress made against illegal subsidies. I'm sure Boeing calculated the long term risk and went forward. You can't allow another company to get it's place at the table with government backing like Airbus.


You do realise Boeing gets massive handouts from the US government in the form of astronomical military spending in the U.S of A that guarantees huge orders for Boeing defense business like KC-46.



That isnt a strong argument unless cross subsidation can be proven,. Otherwise youre saying that no company involved in military contracts can be involved in commercial civilian contracts. Does Boeing sell commercial aircraft at below market rates and use profits from military to allow it to do so? That would be the issue.

Boeing might be willing to take a hit on Canadian orders if it results in the extinction of C-Series. So Canadian retaliation may be something Boeing is willing to live with if it kills the C-Series program and especially the 500 and 700.


I have always believed a countervailing tariff on C Series would be both legal and appropriate but 200% is likely too high, but I dont know.
 
surfdog75
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:16 pm

washingtonflyer wrote:
Amiga500 wrote:
washingtonflyer wrote:

And what is the scope of the investigation - 100 to 150 seat aircraft. You just conceded overlap.


A handy scope for Boeing - yet completely irrelevant to airline operations.


Yes, but its the domestic industry that defines the scope. You're also forgetting that the scope involved a range limitation - 2900 or 2950 miles IIRC.

So, not quite so irrelevant.

Amiga500 wrote:
Once again, demonstrating how ignorant the court are to the running of commercial airlines. Do you want me to break out crayons to make this simpler?


The burden of demonstrating the difference is up to BBD's lawyers. Remember, I mentioned upthread, you had BBD's lawyers and Delta's lawyers contradicting each other right in front of the Commission staff. Those contradictions were not lost on the Commission staff.


Amiga500 wrote:
I note also that you have not commented on effectively a 76 seat aircraft = 100 seat aircraft in the courts eyes, do you agree that they are the same, if not, why not?


Because its not relevant to the current case. Boeing doesn't make an aircraft under 100 seats.


This is the crux of the problem. Believe me, airlines don't consider 100 seat and 150 seat airplanes in the same category. If they did, SWA would be flying to a lot of small communities they don't serve now. That size range was a political nod to Boeing to serve their purposes. Boeing did not offer a product that Delta needed. The price paid shouldn't have mattered or be considered. Boeing was never in the running.

If the restaurant only has large pots of re-warmed fish stew and the customer wants a small salad, the restaurant can't claim to be harmed when the customer goes next door. It's pure politics and you should probably just say so.
Last edited by surfdog75 on Wed Sep 27, 2017 3:19 pm, edited 2 times in total.
 
bigjku
Posts: 1906
Joined: Sat Feb 17, 2007 10:51 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:17 pm

Jayafe wrote:
bigjku wrote:
Right...so a Canadian company has been found to have operated in violation of a rule it needs to follow if it wants to sell to the US and corrective action applied under a law designed to protect US jobs from exactly the kind of state sponsored enterprises BBD now is.

The Canadian response is to basically insult the legal process in the US and question it’s legitimacy.

Essentially the complaint seems to boil down to this...

“Yes we know it was against the rules to do what we did but it doesn’t take that many jobs from you right this second and we really want to do this so stop telling us to follow the rules.”

I mean I guess US workers and businesses should be ok with it so long as they are only getting worked over a little? I mean if you only take $5 from me should I really be mad? After all you really wanted it and your kids needed it to eat right? So it’s fine?


viewtopic.php?f=3&t=1361667&start=800#p19845025


I already ignored your response as off point once. Linking to it again won’t change my mind. Never have I defended Boeing as saints. You won’t ever hear it.

But this is a clear cut and relatively simple case. And you know it.
 
washingtonflyer
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:17 pm

https://uploadfiles.io/nogy9

Commerce Decision memo....

Relevant points:

Bombardier provided its credit ratings, which are published as part of its public annual report, for
the entire l O-year AUL. During the period 2006 through 2015, Bombardier's credit rating was
below investment grade, in the range of marginally speculative (i.e., Ba2 for Moody's and BB
for Standard and POOl"s).36 In December 2015, Bombardier's credit rating went down further to
highly speculative (i.e., B2 for Moody's and B to B- for Standard and Poor's).'? Additionally,
Bombardier has neither reported any loans from commercial banks during 2009 ii.e., when the
launch aid was received), nor are there any other indications that Bombardier had active
borrowing from commercial lenders during the AUL.38 While Bombardier appeared to have
some long-term bonds outstanding during the AUL, the evidence on the record indicates that
they were not tied to any particular assets or security related to the C Series project. Further, we
are making a project-specific determination regarding the C Series because, consistent with the
Preamble, the C Series is a large investment project that received loans for which repayment is
contingent upon its success; therefore, any other outstanding and unrelated bonds issued by
Bombardier are not dispositive as to the C Series project's creditworthiness. Bombardier also
did not report any active loans to finance the C Series, and the terms of the launch aid provided
by the GOC, GOQ, and U'.K. do not represent typical loans. Moreover, the European
Commission's report on the launch aid provided by the U.K. indicates that Bombardier and
Shorts were unable to obtain loans or other financing from commercial banks or other financial
institutions for the C Series project and that Bombardier's credit rating was below investment
grade.'

Further, as demonstrated by its financial ratios, Bombardier was in poor financial health during
the AUL. Data from Infinancials, an equity analysis finn, demonstrates that Bombardier was
much weaker than its peers for all ratios pertinent to the Department's analysis and, for much of
the AUL, was nearly insolvent." According to Infinancials, Bombardier's current ratio, quick
ratio (or acid test), and interest coverage ratio were all below an acceptable, creditworthy level
(as indicated by Bombardier's "speculative" credit rating)." As the Department explained in
Solar Cellsfrom the PRC, a company's current and quick "ratios are highly relevant under 19
CFR 351.505( a)( 4)(i)(B)-(C) because they are indicators of a firm's financial health and its
ability to meet its costs and fixed financial obligations with cash flow ... {and} the meaning of
these ratios is clear: either the respondents have liquid funds available to cover upcoming
obligations, or they do not.?" Further, in Solar Cellsfrom the PRC, the Department noted that
the benchmark for a quick ratio is 1.0, or funds available to cover 100 percent of upcoming
obligations, and a current ratio of2.0.43 We have calculated quick ratios for Bombardier below
1.0 for the entire AUL, and we found only two instances over the AUL (for the years ending
January 31, 2009, and January 31, 2010) where Bombardier's quick ratio was above 0.70.
Similarly, Bombardier's current ratio only rose above 1.50 during the same two years noted
above, with the current ratio near 1.0 for much of the AUL.44 In Solar Cells from the PRC, the
Department also considered a debt-to-equity ratio above 1.0 to be "high.,,45 Bombardier's debtto-
equity ratio was consistently high or very high during the AUL, dipping to a low of 1.10 in
2010 and 1.84 in 2007-2008, but remaining above 2.0 (and in some years above 4.0) throughout
the remainder of the AUL.46 Additionally, Bombardier's CEO admitted that Bombardier was
"on the brink of bankruptcy in 2015" and "needed liquidity," largely due to major delays and
budget overruns with the C Series program." Therefore, we find that Bombardier's financial
ratios, which do not meet the standard for creditworthiness, serve as a conservative proxy for the
likely worse financial ratios of the C Series project. As a result, we preliminarily find the C
Series project to be uncreditworthy.
Last edited by washingtonflyer on Wed Sep 27, 2017 3:22 pm, edited 2 times in total.
 
leghorn
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:20 pm

Jayafe wrote:
EMBSPBR wrote:
The sale to Delta Air Lines was announced on April 28, 2016.
Since then, no other order has been announced.


Boeing's lawsuit might have something to do with that....

No airline will be falling over themselves to buy a plane which they'll have problems selling on the secondhand market even if they aren't flying in to the U.S. as part of their normal business.
It is like buying a SAAB or Rover in the months when they were in the papers for financial troubles before they went out of business.
 
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KarelXWB
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:21 pm

YULspotter wrote:
Quote below from a news conference from the Premiere of Quebec this morning. So are deliveries of Air Canada B737MAXs slated for next year in jeopardy? That will depend on the Canadian Federal government but the door has just been opened.

""Not a bolt, not a part, (and) of course not a plane from Boeing (should be) entering Canada until this conflict is resolved in a satisfactory way,"


Strong words, but I do not see how the Premiere of Quebec could stop Air Canada from taking delivery of Boeing aircraft.
What we leave behind is not as important as how we've lived.
 
washingtonflyer
Posts: 1676
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:22 pm

KarelXWB wrote:
YULspotter wrote:
Quote below from a news conference from the Premiere of Quebec this morning. So are deliveries of Air Canada B737MAXs slated for next year in jeopardy? That will depend on the Canadian Federal government but the door has just been opened.

""Not a bolt, not a part, (and) of course not a plane from Boeing (should be) entering Canada until this conflict is resolved in a satisfactory way,"


Strong words, but I do not see how the Premiere of Quebec could stop Air Canada from taking delivery of Boeing aircraft.


He can't; he's just venting.
 
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GCT64
Posts: 1894
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:24 pm

bigjku wrote:
GCT64 wrote:
The UK government seems mightily unhappy with Boeing. I think somehow, somewhere, it is going to make them pay a price for this. Lots of negative press / statements about Boeing here today.

e.g. "Boeing's trade dispute with Bombardier "could jeopardise" its defence contracts with the UK government, the UK's defence secretary has warned. Sir Michael Fallon made the comments after the US opted to impose a tax on the C-Series jet made by Bombardier."


I would say the UK obejection has he same basis as the Canadian one. We know it was wrong but we really want the jobs that go with it. Can’t you take one for the team? I even saw a ludicrous suggestion this could undermine the Irish Peace.


The UK Government is responding, in least in part, to the US assertion that the UK Government support was unlawful. It disagrees with that view:

"The UK government believes clearly that the support that we have given through repayable launch investment to the C-Series project is legitimate, is lawful, is within World Trade Organisation rules and therefore that the actions that have been brought around this case are unwarranted."
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CS500
Posts: 39
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:24 pm

bigjku wrote:
I would say the UK obejection has he same basis as the Canadian one. We know it was wrong but we really want the jobs that go with it. Can’t you take one for the team? I even saw a ludicrous suggestion this could undermine the Irish Peace.


The UK currently has a minority government which is a coalition of two parties, the conservative party and the Democratic unionist party (DUP). The DUP only runs in Northern Ireland, and because Bombardier is in Norther Ireland, this instantly becomes an existential threat to the current UK government. If Theresa May ignores it/does nothing, then they will very likely/almost surely lose the DUP support which is propping them up, and another UK election would occur (which also then puts BREXIT in flux). So while I don't think this will de-stabilize Norther Ireland per se, it certainly is a ginormous headache for the UK government and will be getting a ton of their attention.

Regardless of who is right/wrong etc, this is a giant geo-political mess and the resolution is likely to occur at a bargaining table (either NAFTA or otherwise).

BTW, while not as severe, Quebec is always a critical area for Canadian politics, and this also goes right at that rift as well.
Last edited by CS500 on Wed Sep 27, 2017 3:31 pm, edited 1 time in total.
 
leghorn
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:25 pm

Dublin Unionist Party???
 
StTim
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Joined: Thu Aug 08, 2013 7:39 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:28 pm

Democratic Unionist Party.

The last thing they want to be part of is Dublin ;)
 
airnorth
Posts: 467
Joined: Thu Jun 09, 2011 7:30 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:29 pm

washingtonflyer wrote:
BlueSky1976 wrote:
This is going to bite boeing in the @$$ BIG TIME. It's now Canada's turn: here's to the 220% tarriff on all 737s, 777s and 787s bought by WestJet, Air Canada and Air Transat.

Bombardier still has the rest of the world. Keep up good job, my fellow Canadians, don't give in to the idiots south of your border - Boeing included.


This is just stupid. No Canadian producer manufactures an equivalent to the 787 or 777 so you can't have injury when no domestic industry exists to seek duties.


I guess that is kind of the point. The general consensus seems to be that no manufacturer in the States make anything equivalent to the C Series, well at least that is what the potential purchaser is saying.
 
CS500
Posts: 39
Joined: Mon Sep 25, 2017 4:31 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:31 pm

KarelXWB wrote:
YULspotter wrote:
Quote below from a news conference from the Premiere of Quebec this morning. So are deliveries of Air Canada B737MAXs slated for next year in jeopardy? That will depend on the Canadian Federal government but the door has just been opened.

""Not a bolt, not a part, (and) of course not a plane from Boeing (should be) entering Canada until this conflict is resolved in a satisfactory way,"


Strong words, but I do not see how the Premiere of Quebec could stop Air Canada from taking delivery of Boeing aircraft.


He can't obviously, but the government of Canada certainly can, and this is just such obvious grandstanding material for the premier of Quebec that this was an obvious retort.

I would also say that with a majority government and what is now clearly a gloves are off NAFTA re-negotiation, a retaliatory duty against Boeing/US is certainly feasible.

I also think the insane duty is a mistake on Boeing/Trumps part. A more reasonable duty of say 30-40% would have been very useable by the opposition to attack the government for bailing out bombardier, but 219% is such an obvious statement of war by the US that I don't think they are going to be able to do very much with it
 
CS500
Posts: 39
Joined: Mon Sep 25, 2017 4:31 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:31 pm

StTim wrote:
Democratic Unionist Party.

The last thing they want to be part of is Dublin ;)


Sorry my bad on that.
 
Amiga500
Posts: 2645
Joined: Tue Mar 03, 2015 8:22 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:31 pm

washingtonflyer wrote:
K, I've sat and read through the decision memo. The big take away is that DOC found BBD to be uncreditworthy and that CSALP was not equityworthy.

The GOQ equity infusion provided 147% of the subsidy rate.
The Federal launch aid provided 29% of the subsidy rate.
The GOQ launch aid provided 9% of the subsidy rate.
UK launch aid provided 17.5% of the subsidy rate.
Free land at Mirabel - 1.44%
Tax incentives, tax credits, etc all amounted to about 10%


In work, so all I could do was skim through the bits relating to Shorts.

Over here, they dwarf most all other employers - therefore - I'm a little miffed as to how the court could reasonably use "Shorts received a disproportionately large amount of
_____ benefits when compared to other recipients" as justification for its decision.

If Shorts hires 50 times more people than other recipients, and have a much greater percentage of assembly line-workers is it not expected that they'd get a dis-proportionally large amount for some of these training grants?

The only other manufacturers who'd compare to Shorts (~5,300 employees) would be FG Wilson (~2000 employees) and Wrightbus (~1,800 employees).
 
bigjku
Posts: 1906
Joined: Sat Feb 17, 2007 10:51 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:32 pm

CS500 wrote:
bigjku wrote:
I would say the UK obejection has he same basis as the Canadian one. We know it was wrong but we really want the jobs that go with it. Can’t you take one for the team? I even saw a ludicrous suggestion this could undermine the Irish Peace.


The UK currently has a minority government which is a coalition of two parties, the conservative party and the dublin unionist party (DUP). The DUP only runs in Northern Ireland, and because Bombardier is in Norther Ireland, this instantly becomes an existential threat to the current UK government. If Theresa May ignores it/does nothing, then they will very likely/almost surely lose the DUP support which is propping them up, and another UK election would occur (which also then puts BREXIT in flux). So while I don't think this will de-stabilize Norther Ireland per se, it certainly is a ginormous headache for the UK government and will be getting a ton of their attention.

Regardless of who is right/wrong etc, this is a giant geo-political mess and the resolution is likely to occur at a bargaining table (either NAFTA or otherwise).

BTW, while not as severe, Quebec is always a critical area for Canadian politics, and this also goes right at that rift as well.


So accepting all that as it true for the purpose of this response I would ask you accept the premise that a US company and jobs could be harmed by allowing this as the ruling found.

Why should US companies and workers suffer for these reasons?
 
washingtonflyer
Posts: 1676
Joined: Sun Sep 08, 2013 9:45 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:32 pm

airnorth wrote:
washingtonflyer wrote:
BlueSky1976 wrote:
This is going to bite boeing in the @$$ BIG TIME. It's now Canada's turn: here's to the 220% tarriff on all 737s, 777s and 787s bought by WestJet, Air Canada and Air Transat.

Bombardier still has the rest of the world. Keep up good job, my fellow Canadians, don't give in to the idiots south of your border - Boeing included.


This is just stupid. No Canadian producer manufactures an equivalent to the 787 or 777 so you can't have injury when no domestic industry exists to seek duties.


I guess that is kind of the point. The general consensus seems to be that no manufacturer in the States make anything equivalent to the C Series, well at least that is what the potential purchaser is saying.


ONE potential purchaser said that, but several others did not. In fact, there was a heated competition between the 737-700 and the CS-100 at United.

I think one could reasonably find some commonality in an aircraft that seats 100 and 130 seats. Certainly other airlines did. Somewhat substitutable . But could you with a straight face compare a CS100 to a 777-300W?

Please put the nationalistic tendencies aside.
 
Amiga500
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:34 pm

leghorn wrote:
Dublin Unionist Party???


teeheeheehee

I'd love to see their faces if they read that :lol:
 
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JetBuddy
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:34 pm

A good article on the subject here:

https://www.skiesmag.com/news/bombardie ... -c-series/

I'm no lawyer or expert in international trade. But from my perspective this seems incredibly unfair to Bombardier. Boeing is a massive industry giant in a de facto duopoly. Boeing doesn't even produce a competing product to the C-Series. And Boeing themselves are selling end of the line 737s at absurdly low prices.

To me it looks like a trade war is brewing. If Delta cancels the Bombardier deal due to this ruling, I will bet there will be repercussions from Canada, the UK and the EU. Even though Trudeau or Couillard can't order Air Canada to cancel their Boeing order, there's always a way to force them to do so. Politics is dirty business.
 
Amiga500
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:36 pm

washingtonflyer wrote:
ONE potential purchaser said that, but several others did not. In fact, there was a heated competition between the 737-700 and the CS-100 at United.


Delta
JetBlue
Sun Country
Spirit

any others?
 
CS500
Posts: 39
Joined: Mon Sep 25, 2017 4:31 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:39 pm

bigjku wrote:

So accepting all that as it true for the purpose of this response I would ask you accept the premise that a US company and jobs could be harmed by allowing this as the ruling found.

Why should US companies and workers suffer for these reasons?


Your premise obviously hasn't been proven (that is the next part). The only winner from this is Boeing Executives and lawyers. Delta employees lose, all CSERIES supliers in the US (over 50% of the plane) lose, and all US air passangers lose. But we shall see on that.

Additionally, the 219% duty on the list price is also obviously absurd. Assuming a $25 mil sales price and only considering the 75 plane order (not the 50 options), that is $4.1 billion. This is almost as much as the entire CSERIES program, which obviously sells to different markets than just the USA.

Finally, all governments make comprises/approach problems with international relations in mind. Triggering a trade war with your number 1 trading partner (and the only one with which the US runs a trade surplus) is a compelling constraint that most leaders would apply.
 
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RRTrent
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:40 pm

washingtonflyer wrote:
Boeing's deal to United is irrelevant. The question relates to what has BBD done in the U.S. market. BBD has been found (preliminarily) by the USDOC to have been the recipient of massive subsidies from the GOQ and the GOC. How is a sale between one US company and another US company relevant to that?

I hear this "Boeing received tax breaks" issue. May or may not be true. But if the only argument is that "the other guy got tax breaks too", then one cannot complain when one body finds that the programs in question of BBD were subsidies.


Its very relevant because the WTO have a duty to ensure any trade is fair and reasonable... So while they cant sanction Boeing for the UA deal (because in US law its perfectly legal), they can consider the impact of that deal when determining if the tariff placed on BBD in this case is restriction of trade, or not! and one fact no one can escape here is that Boeing have made issue of a practice they're very guilty of doing themselves!

So the question the WTO will have to answer is this tariff a restriction of trade on a competitor? does it apply to all imports from Canada? or just Quebec? or just BBD planes... or just the one type of plane? this is all considered. I'm being careful with my wording and not declaring a side in this... I'm just pointing out what the WTO will look at if its gets that far.

Any decision by them being enforceable, or adhered to by the US is a different matter altogether.
 
bigjku
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:41 pm

CS500 wrote:
bigjku wrote:

So accepting all that as it true for the purpose of this response I would ask you accept the premise that a US company and jobs could be harmed by allowing this as the ruling found.

Why should US companies and workers suffer for these reasons?


Your premise obviously hasn't been proven (that is the next part). The only winner from this is Boeing Executives and lawyers. Delta employees lose, all CSERIES supliers in the US (over 50% of the plane) lose, and all US air passangers lose. But we shall see on that.

Additionally, the 219% duty on the list price is also obviously absurd. Assuming a $25 mil sales price and only considering the 75 plane order (not the 50 options), that is $4.1 billion. This is almost as much as the entire CSERIES program, which obviously sells to different markets than just the USA.


Did you read how it was calculated? The whole report was linked. Seems pretty straightforward to me.
 
WaywardMemphian
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:44 pm

I figure they'll be some sort of shell leasing company set up offshore that will own the Delta planes and then leased to Delta for comparable cost as Delta purchasing them t

When Boeing coughs up enough money to purchase the C-Series from Bombardier and Quebec gets it's money back, Bombardier gets enough cash to get back on it's feet and back pre C-Series businesses and Boeing keeps a line open in Quebec.

When it gets out in public that 22,000 American jobs are on the line and Reps and Senators in those states start howling, things will start to get ironed out. People keep mentioning Trump, I doubt he had a real clue to this until a day or two ago, if then. After all, this administration signed off on Norwegian as well. The real opposition to this action is just getting started.

The fact is that Boeing actually needs a 100 to 130 seater in it's line up considering today-s market and labor conditions. They messed up killing off the 717. The market has evolved since that decision, just like killing off the 757 instead of MAXing it.

They buy it, work to convert United's order to the C-Series, go after Jet Blue and look to win further business with them by developing and winning them ovwr from Airbus with a CS500 and MOM.

If the C-Series was a Boeing from the get go, therr would be hundreds more orders and at higher pricing.
Last edited by WaywardMemphian on Wed Sep 27, 2017 3:54 pm, edited 1 time in total.
 
CS500
Posts: 39
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 3:54 pm

bigjku wrote:
CS500 wrote:
bigjku wrote:

So accepting all that as it true for the purpose of this response I would ask you accept the premise that a US company and jobs could be harmed by allowing this as the ruling found.

Why should US companies and workers suffer for these reasons?


Your premise obviously hasn't been proven (that is the next part). The only winner from this is Boeing Executives and lawyers. Delta employees lose, all CSERIES supliers in the US (over 50% of the plane) lose, and all US air passangers lose. But we shall see on that.

Additionally, the 219% duty on the list price is also obviously absurd. Assuming a $25 mil sales price and only considering the 75 plane order (not the 50 options), that is $4.1 billion. This is almost as much as the entire CSERIES program, which obviously sells to different markets than just the USA.


Did you read how it was calculated? The whole report was linked. Seems pretty straightforward to me.


If we take this at face value, then over a production run of say 300 planes at $25 mil selling price, that bombardier got $16.25 Billion in subsidies for what is a juust over $5 billion program. It may be straightforward how they calculated it, but is not a reasonable calculation.
 
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767333ER
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 4:04 pm

bigjku wrote:
Amiga500 wrote:
bigjku wrote:
I think we need to backup the bus on Boeing “dumping” on the UA order. I have talked to several people involved with that who say that Boeing would still have made money on the deal. It’s massively aggressive pricing but a good article that came about when United deferred and converted someof the orders stated the price was around $26 million per.


I gathered it was under $22m USD. At that price, Boeing would really struggle to generate profit. If it was profitable at that rate of going, then BCA would not be feeling much pressure on profits* from Airbus who wouldn't discount down to that rate.


*which they have used to justify big layoffs.


Layoffs are simply efficiency when production rates are going up. I am 100% in favor of such things. Employee the people elsewhere where they can produce something useful.

In fact it’s why BBD’s cost to build the C-series are likely higher than Boeing’s to build the 737. They drive about 1/3rd as much revenue per employee as Boeing. They simply aren’t efficient.

There we go. So layoffs are a good thing according to you. Do you realize that when people lose jobs, the economy loses steam? Do you realize what people have to go through when they lose jobs? So I guess Boeing does the right thing when they take the money they would be paying layers off workers and shovels it into buybacks and executive salaries because I guess that’s efficiency. What it really is is people without a job, something hard to get these days. When people don’t have employment they have to rely on welfare, something I presume you are also against. They have to wonder if they will be able to keep their house, in many cases support their family, and whether or not they’ll have to live on the street. I didn’t want to say this before, but it’s becoming clear that your mind must exist in its own alternate reality.
Been on: 732 733 734 73G 738 752 763 A319 A320 A321 CRJ CR7 CRA/CR9 E145 E175 E190 F28 MD-82 MD-83 C172R C172S P2006T PA-28-180

2 ears for spatial hearing, 2 eyes for depth perception, 2 ears for balance... How did Boeing think 1 sensor was good enough?!
 
Bobloblaw
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 4:08 pm

CS500 wrote:
bigjku wrote:


Finally, all governments make comprises/approach problems with international relations in mind. Triggering a trade war with your number 1 trading partner (and the only one with which the US runs a trade surplus) is a compelling constraint that most leaders would apply.


Can you please link where the US runs a trade surplus with Canada. I am not finding it, I am seeing a deficit of $11b for the 6 months of 2017 courtsey of the Commerce Dept
 
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CFM565A1
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 4:14 pm

bigjku wrote:

Layoffs are simply efficiency when production rates are going up. I am 100% in favor of such things. Employee the people elsewhere where they can produce something useful.


You’re absolutely out of your mind. You must be dreaming in technicolor seriously! We all know that that’s the usual white collar fiction that’s fed to the average person on a daily basis.

Look I live in the heart of oil country... when we had our oil boom, the entire country’s trade and production workers moved to work on the oil fields. When oil tanked, productions slowed and the corporation did... wait for it... LAYED OFF PEOPLE... 767333ER said you live in an alternate universe perhaps, I just think that you’re absolutely nuts if you think layoffs are efficiency when production of something goes up. :banghead: :banghead:
C172-M/N/P/R/S , PA-28-180, P2006T, PA-34-200T, B1900D, DH8A/C ERJ-145, CRJ-100/200, DH8D, CRJ-700/705/900, E-175/190, A319/320/321, 737-200/300/400/600/700/800/900ER/M8, MD-82/83, 757-200/300, 767-300, A330-300, 787-9, 777-300ER, F28-4000.
 
washingtonflyer
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 4:14 pm

Imports of goods from Canada to USA - Jan-July 2017: $172,698,416,252
Exports of goods to Canada from USA - Jan-July 2017: $134,210,214,822
Last edited by washingtonflyer on Wed Sep 27, 2017 4:14 pm, edited 1 time in total.
 
Bobloblaw
Posts: 2406
Joined: Fri Jan 13, 2012 1:15 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 4:15 pm

WaywardMemphian wrote:
I figure they'll be some sort of shell leasing company set up offshore that will own the Delta planes and then leased to Delta for comparable cost as Delta purchasing them t

When it gets out in public that 22,000 American jobs are on the line and Reps and Senators in those states start howling, things will start to get ironed out. People keep mentioning Trump, I doubt he had a real clue to this until a day or two ago, if then. After all, this administration signed off on Norwegian as well. The real opposition to this action is just getting started.



I doubt that 22,000 US jobs are involved in the C-Series program. That seems much much too high. Maybe 22,000 are employed at US suppliers, but those suppliers wont shut down and layy off all their employees without the C-Series.

The thing is Canada should not be allowed to dump planes on the global market. This is not free trade and none of the writings on free trade say it is. In fact most free trade publications do indeed make a case for countervailing tariffs. Though I think this tariff is so punitive it is designed to kill off the C-Series not simply offset the subsidy and return the market to a free market condition.
 
dampfnudel
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 4:17 pm

CS500 wrote:
Also, JetBlue comes out in support of the CSeries...

https://www.flightglobal.com/news/artic ... ng-441478/


I have a feeling B6 was close to a deal with Bombardier on the CSeries. It was the true potential of the CSeries (CS500 and possibly CS700) which scared Boeing.
A313 332 343 B703 712 722 732 73G 738 739 741 742 744 752 762 76E 764 772 AT5 CR9 D10 DHH DHT F27 GRM L10 M83 TU5
 
Bobloblaw
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 4:19 pm

washingtonflyer wrote:
Imports of goods from Canada to USA - Jan-July 2017: $172,698,416,252
Exports of goods to Canada from USA - Jan-July 2017: $134,210,214,822



That is an odd way of stating it. Imports dont go "to" and Exports dont come "from"

As I am reading it Canada exports $172B and imports $134B in bilateral Canada-US trade. That would be a pretty significant deficit.
 
dampfnudel
Posts: 598
Joined: Wed Oct 04, 2006 9:42 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 4:20 pm

219% is ridiculous to say the least. It's downright shameful.
A313 332 343 B703 712 722 732 73G 738 739 741 742 744 752 762 76E 764 772 AT5 CR9 D10 DHH DHT F27 GRM L10 M83 TU5
 
Bobloblaw
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 4:20 pm

dampfnudel wrote:
dampfnudel wrote:
CS500 wrote:
Also, JetBlue comes out in support of the CSeries...

https://www.flightglobal.com/news/artic ... ng-441478/


I have a feeling B6 was close to a deal with Bombardier on the CSeries. That's why they found it necessary to offer their support. It was the true potential of the CSeries (CS500 and possibly CS700) which scared Boeing.



Not necessarily, Jetblue wants the option of the C-series to leverage against B and A or even EMB. Maybe they were getting close to a C-Series order or maybe not.
 
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EMBSPBR
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 4:23 pm

dampfnudel wrote:
CS500 wrote:
Also, JetBlue comes out in support of the CSeries...

https://www.flightglobal.com/news/artic ... ng-441478/


I have a feeling B6 was close to a deal with Bombardier on the CSeries. It was the true potential of the CSeries (CS500 and possibly CS700) which scared Boeing.


Not really:
"The airline believes that the industry will benefit from competition between the CSeries and Embraer 190, adds Hayes, backing Bombardier's assertion that its aircraft does not compete with larger Boeing and Airbus jets."

B6 is playing the game "who offer more for less"...

"CS500 and possibly CS700" its a far dream by now ...
 
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EMBSPBR
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 4:23 pm

Bobloblaw wrote:
dampfnudel wrote:
dampfnudel wrote:

I have a feeling B6 was close to a deal with Bombardier on the CSeries. That's why they found it necessary to offer their support. It was the true potential of the CSeries (CS500 and possibly CS700) which scared Boeing.



Not necessarily, Jetblue wants the option of the C-series to leverage against B and A or even EMB. Maybe they were getting close to a C-Series order or maybe not.


True !!!
 
dampfnudel
Posts: 598
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Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 4:25 pm

Bobloblaw wrote:
dampfnudel wrote:
dampfnudel wrote:

I have a feeling B6 was close to a deal with Bombardier on the CSeries. That's why they found it necessary to offer their support. It was the true potential of the CSeries (CS500 and possibly CS700) which scared Boeing.



Not necessarily, Jetblue wants the option of the C-series to leverage against B and A or even EMB. Maybe they were getting close to a C-Series order or maybe not.


Well, they definitely have a dog in this fight.
A313 332 343 B703 712 722 732 73G 738 739 741 742 744 752 762 76E 764 772 AT5 CR9 D10 DHH DHT F27 GRM L10 M83 TU5
 
bigjku
Posts: 1906
Joined: Sat Feb 17, 2007 10:51 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 4:36 pm

CS500 wrote:
bigjku wrote:
CS500 wrote:

Your premise obviously hasn't been proven (that is the next part). The only winner from this is Boeing Executives and lawyers. Delta employees lose, all CSERIES supliers in the US (over 50% of the plane) lose, and all US air passangers lose. But we shall see on that.

Additionally, the 219% duty on the list price is also obviously absurd. Assuming a $25 mil sales price and only considering the 75 plane order (not the 50 options), that is $4.1 billion. This is almost as much as the entire CSERIES program, which obviously sells to different markets than just the USA.


Did you read how it was calculated? The whole report was linked. Seems pretty straightforward to me.


If we take this at face value, then over a production run of say 300 planes at $25 mil selling price, that bombardier got $16.25 Billion in subsidies for what is a juust over $5 billion program. It may be straightforward how they calculated it, but is not a reasonable calculation.


The biggest component is the cost of equity. What do you think the expected rate of return on a billion dollars for a company that admired itself was on the verge of bankruptcy and admitted itself it won’t return to profitability until sometime in the 2020-25 range?

The S&P 500 returns an average of 10% annually on companies with BBB+ credit ratings. Bombardier was rated B- which highl speculative and firmly in the junk catoegry. It’s the same category Tesla is in. And Tesla provided a return from the date of the equity investment of something around 115% or about 40% per year for investors to take that risk.

Boeing has provided a 34% return (actually more as it pays a dividend but let’s just ignore that for now).

So what do you think a reasonable return for that investment is, considering it’s already 3 years old and has lost half its value since then? There is a time value to money as well. That billion dollars invested in a broad stock market has returned 20% by now instead of falling by half.

Once you decide on a reasonable expected rate of return you can decide what level of subsidy there was. If you say 30% per year and we won’t start paying you for 10 years that one billion is worth 13 billion dollars of expected return.

I invite you to state what the reasonable expected rate of return on an equity investment for basically half the risk on a nearly bankrupt company entering a highly competitive field is. Then we can do the math and see if you are more on target than the people who did this for a living.
 
bigjku
Posts: 1906
Joined: Sat Feb 17, 2007 10:51 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 4:46 pm

767333ER wrote:
bigjku wrote:
Amiga500 wrote:

I gathered it was under $22m USD. At that price, Boeing would really struggle to generate profit. If it was profitable at that rate of going, then BCA would not be feeling much pressure on profits* from Airbus who wouldn't discount down to that rate.


*which they have used to justify big layoffs.


Layoffs are simply efficiency when production rates are going up. I am 100% in favor of such things. Employee the people elsewhere where they can produce something useful.

In fact it’s why BBD’s cost to build the C-series are likely higher than Boeing’s to build the 737. They drive about 1/3rd as much revenue per employee as Boeing. They simply aren’t efficient.

There we go. So layoffs are a good thing according to you. Do you realize that when people lose jobs, the economy loses steam? Do you realize what people have to go through when they lose jobs? So I guess Boeing does the right thing when they take the money they would be paying layers off workers and shovels it into buybacks and executive salaries because I guess that’s efficiency. What it really is is people without a job, something hard to get these days. When people don’t have employment they have to rely on welfare, something I presume you are also against. They have to wonder if they will be able to keep their house, in many cases support their family, and whether or not they’ll have to live on the street. I didn’t want to say this before, but it’s becoming clear that your mind must exist in its own alternate reality.


Of course it sucks for them and I never said otherwise. But it’s good for the overall allocation of spending and capital.

If I can produce X planes with Y workers but through investment in automation and efficiency I can produce X planes with Y*.80 workers that means I got more efficient. And if you don’t do it, see US auto companies in the 1960’s and 70’s, someone will come along and eat your lunch.

And you know nothing about my stances on anything else. For the record I support guaranteed minimum income as a solution for automation of many jobs but I appreciate the assumption. But I don’t pretend that layoffs won’t or shouldn’t happen. You can’t hold back that process no matter what you do unless you get a worldwide agreement to basically stop the process.

Having people employed artificially when it isn’t needed just makes companies vulnerable and allows society to delay dealing with the problems posed by increased efficiency effectively so I won’t bash any company for doing it. It’s absolutely what they should be doing because it drives down the cost of goods.
Last edited by bigjku on Wed Sep 27, 2017 4:49 pm, edited 2 times in total.
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