Moderators: jsumali2, richierich, ua900, hOMSaR

  • 1
  • 5
  • 6
  • 7
  • 8
  • 9
  • 29
 
CF-CPI
Posts: 1448
Joined: Sat Nov 18, 2000 12:54 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 4:46 pm

Bobloblaw wrote:
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.


It certainly does raise eyebrows. It has been said that Bombardier was less than forthcoming with hard data which would allow for accurate assessment of a countervailing tariff. If that's the case, then how was the 200% arrived at? If Bombardier thinks 200% is unreasonable, I'd suggest they present a counterargument.
 
airnorth
Posts: 437
Joined: Thu Jun 09, 2011 7:30 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 4:49 pm

washingtonflyer wrote:
airnorth wrote:
washingtonflyer wrote:

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.


Nationalistic tendencies? Sorry, I'm not sure what you mean by that.

I think it was the one order, Delta, that all of this uproar is about? To compare both the 777 and CSeries in terms of capacity is odd, however they are similar in a lot of other areas. I guess it just depends on where we draw the circle around the specs we want. If someone just wanted to order an airplane, you would likely end up with everything that is an airplane as a potential product. In this case Delta had certain specifications that the CSeries met, and Boeing didn't , otherwise would they not have been invited to bid? Not really sure how that works, but I would think that Embraer, Mitsubushi, and Sukhoi may have been considered by Delta as well? Those planes may have been to small, I am not sure, again, it is what the Customer wanted, not me, I didn't really have a voice at the table, they wanted something that Boeing didn't offer.
 
mjoelnir
Posts: 9391
Joined: Sun Feb 03, 2013 11:06 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 4:53 pm

bigjku wrote:
CS500 wrote:
bigjku wrote:

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).

As Boeing has no equity, or rather minus equity, how do you calculate return on equity?

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.
 
User avatar
Super80Fan
Posts: 1622
Joined: Thu Jul 06, 2017 4:14 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 4:54 pm

I think it's time to change the phrase around a bit: "If it's Boeing, I'm not going". Disgraceful company, heavily involved in politics, killed McDonnell Douglas, and is trying to make a monopoly. Hope the Feds raid them on something.
RIP McDonnell Douglas
RIP US Airways
 
aaexecplat
Posts: 511
Joined: Tue Sep 29, 2009 2:49 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 4:58 pm

I don't take issue with the claim that BBD received subsidies (I simply don't know enough about it). I don't take issue with the amount of the tariff levied by the US (seems like they used a formula to arrive at it).

What I do take issue with is the two-faced nature of Boeing's claims. While they accuse companies both big and small of tax subsidies and unfair competition, they get massive tax breaks by both the federal government and States and bribe their way into military deals (see Tanker deal). Everyone receives launch aid or subsidies in this business. That is a fact of life.

What I do take issue with is a US government agency doing the bidding of a private employer knowing that it has as recently as the last decade bailed out entire sectors (Financials and Auto just to name 2) all of whom operate internationally and compete with foreign banks and investment houses who did not receive the same bailouts during the GFC.

It might serve Boeing well to remember that any airline in the world has the option to buy another airplane that is usually either slightly more capable or only slightly less capable than their own, in virtually any size category. There is no doubt that this move will cost them orders. How many, I don't presume to know or hazard to guess. But to think they can just wipe out a competitor and pick up their orders would be naive to say it kindly.

We have just become a pathetic country full of pathetic little people who are more concerned with protecting their belongings than strapping their boots and innovate their way to the top of the global economic heap.
 
jeffrey0032j
Posts: 765
Joined: Wed Jun 15, 2016 3:11 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 5:01 pm

Super80Fan wrote:
I think it's time to change the phrase around a bit: "If it's Boeing, I'm not going". Disgraceful company, heavily involved in politics, killed McDonnell Douglas, and is trying to make a monopoly. Hope the Feds raid them on something.

Airbus killed McDonnell Douglas with EU support. MD had no chance in that bloodbath. The MD80 could compete with the 737 classic, but things changed with the A320.
 
YYZLGA
Posts: 439
Joined: Fri Dec 09, 2016 4:28 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 5:09 pm

washingtonflyer wrote:
Actually, yes there was a WTO decision on lumber.

https://www.wto.org/english/tratop_e/di ... s257_e.htm


As your link indicates, there as no WTO decision. It was a "mutually agreed settlement," meaning that Canada surrendered and basically accepted an export tax on its lumber exports as the US demanded. This was because Canada knew the US wouldn't abide by any WTO decision on the issue.

jeffrey0032j wrote:
Airbus killed McDonnell Douglas with EU support. MD had no chance in that bloodbath. The MD80 could compete with the 737 classic, but things changed with the A320.


Maybe the problem is that MD's updated 60s technology simply couldn't compete with Airbus' brand new design in the marketplace. The reality is it takes a lot of money to develop a truly new aircraft technology. The upfront cost is gigantic and very difficult to obtain through conventional financial markets, whose interest is almost always quite short term--especially if the company isn't a tech startup. Airbus received considerable government support for its clean sheet designs. Boeing received billions in tax breaks plus had lavish military contracts to fall back on, but the 787 still nearly broke the company. Now, Bombardier has a new narrowbody design that everybody accepts is a significant improvement on what currently exists, and Boeing, helped by the US government, is trying to strangle it in the cradle to protect their updated 1960s era design. Can anybody honestly say this is good for commercial aviation?
Last edited by YYZLGA on Wed Sep 27, 2017 5:28 pm, edited 1 time in total.
 
afgeneral
Posts: 131
Joined: Sat Jul 02, 2016 2:43 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 5:17 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.


well not directly but surely he can seek the support of the PM which in turn can put a 220% duty on Boeing imports - still overkill as only a 50% tariff will cause all Canadian airlines to run around finding ways to not take delivery of the aircraft because it's not worth it with the tariffs
 
washingtonflyer
Posts: 1602
Joined: Sun Sep 08, 2013 9:45 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 5:20 pm

YYZLGA wrote:
washingtonflyer wrote:
Actually, yes there was a WTO decision on lumber.

https://www.wto.org/english/tratop_e/di ... s257_e.htm


As your link indicates, there as no WTO decision. It was a "mutually agreed settlement," meaning that Canada surrendered and basically accepted an export tax on its lumber exports as the US demanded. This was because Canada knew the US wouldn't abide by any WTO decision on the issue.


Did you miss the part which was entitled "Appellate Body Report"? Based on the findings of the dispute panel and Appellate Body, the parties struck a deal.

To wit...

VII. Findings and Conclusions

167. For the reasons set out in this Report, the Appellate Body:

(a) upholds the Panel's finding, in paragraph 7.30 of the Panel Report, that USDOC's "[d]etermination that the Canadian provinces are providing a financial contribution in the form of the provision of a good by providing standing timber to the timber harvesters through the stumpage programmes" is not inconsistent with Article 1.1(a)(1)(iii) of the SCM Agreement;

(b) reverses the Panel's finding, in paragraph 7.64 of the Panel Report, with respect to the interpretation of Article 14(d) of the SCM Agreement, and finds, instead, that an investigating authority may use a benchmark other than private prices in the country of provision, provided that:

(i) the investigating authority has established that private prices of the goods in question in the country of provision are distorted, because of the predominant role of the government in the market as a provider of the same or similar goods; and

(ii) when the investigating authority proceeds in this manner, it ensures that the alternative benchmark relates or refers to, or is connected with, prevailing market conditions in the country of provision (including price, quality, availability, marketability, transportation and other conditions of purchase or sale);

(c) reverses the Panel's consequential finding, in paragraph 7.65 of the Panel Report, that the United States acted inconsistently with Articles 10, 14, 14(d) and 32.1 of the SCM Agreement with respect to USDOC's determination of the existence and amount of benefit in the underlying countervailing duty investigation;


(d) finds, however, that there is not a sufficient factual basis to complete the analysis as to whether, under Article 14(d) of the SCM Agreement, USDOC was justified in using a benchmark other than private prices in Canada, and as to whether such benchmark relates or refers to, or is connected with, prevailing market conditions in Canada, (including price, quality, availability, marketability, transportation and other conditions of purchase or sale), and, therefore, does not make findings on whether USDOC's determination of the existence and amount of benefit in the underlying countervailing duty investigation is consistent or inconsistent with Articles 14 and 14(d) of the SCM Agreement, or on whether the imposition of countervailing duties based on that determination is consistent or inconsistent with Articles 10 and 32. 1 of the SCM Agreement;

(e) upholds the Panel's finding, in paragraph 7.99 of the Panel Report, that USDOC's failure to conduct a pass-through analysis in respect of arm's length sales of logs by tenured harvesters/sawmills to unrelated sawmills is inconsistent with Articles 10
and 32.1 of the SCM Agreement and Article VI:3 of the GATT 1994;

(f) reverses the Panel's finding, in paragraph 7.99 of the Panel Report, that USDOC's failure to conduct a pass-through analysis in respect of arm's length sales of lumber by tenured harvesters/sawmills to unrelated remanufacturers is inconsistent with Articles 10 and 32.1 of the SCM Agreement and Article VI:3 of the GATT 1994.
168. The Appellate Body recommends that the DSB request the United States to bring its measure, which has been found in this Report, and in the Panel Report as modified by this Report, to be inconsistent with the SCM Agreement and the GATT 1994, into conformity with its obligations under those Agreements.
 
trex8
Posts: 5517
Joined: Sat Nov 02, 2002 9:04 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 5:41 pm

KGRB wrote:
trex8 wrote:
MSPNWA wrote:


Like they were before? Their relationship has been negative for years. Boeing had little to lose.

It amazes me that people still think that Delta and Boeing have a amicable relationship when every piece of evidence points against that.


130 739Er orders over last few years is not chicken feed

That order was from 2011. Six years is a long time in the airline industry. More recent orders have pointed to Delta moving toward an Airbus/Bombardier fleet.

Yes the original 10 0 were in 2011. 20 were in 2015 and 10 this year.
 
heavymetal
Posts: 4584
Joined: Fri May 08, 2015 3:37 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 5:48 pm

Trying to understand both arguments of this issue and have a general question. Many here argue that Boeing has received tax breaks from local governments and the national government. In order for this benefit to be recognized, don't they have to generate some pre-tax profit? This wouldn't be a benefit if they didn't generate any pre-tax profit?

If that is the case, I don't see how it's comparable to the benefit Bombardier received, which was a cash injection to cover actual losses due to lack of profit. I could be misunderstanding this.
 
SonOfABeech
Posts: 207
Joined: Tue Jun 21, 2016 9:51 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 5:52 pm

Newbie-ish question that might be out of place here, but I don't know where else to put it: What is it about the C-Series that scares Boeing (and to a lesser extent Airbus) so much, while they seem to get along with Embraer's offerings? The potential for a CS500 or 700?
 
YYZLGA
Posts: 439
Joined: Fri Dec 09, 2016 4:28 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 5:53 pm

heavymetal wrote:
Trying to understand both arguments of this issue and have a general question. Many here argue that Boeing has received tax breaks from local governments and the national government. In order for this benefit to be recognized, don't they have to generate some pre-tax profit? This wouldn't be a benefit if they didn't generate any pre-tax profit?

If that is the case, I don't see how it's comparable to the benefit Bombardier received, which was a cash injection to cover actual losses due to lack of profit. I could be misunderstanding this.


A lot of the benefits are property and payroll tax exemptions, which are paid regardless of net income.

SonOfABeech wrote:
Newbie-ish question that might be out of place here, but I don't know where else to put it: What is it about the C-Series that scares Boeing (and to a lesser extent Airbus) so much, while they seem to get along with Embraer's offerings? The potential for a CS500 or 700?


Exactly.
 
User avatar
EMBSPBR
Posts: 630
Joined: Thu Aug 10, 2017 9:03 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 5:59 pm

SonOfABeech wrote:
The potential for a CS500 or 700?


No financial resources at the time for this.
 
YYZLGA
Posts: 439
Joined: Fri Dec 09, 2016 4:28 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 5:59 pm

EMBSPBR wrote:
SonOfABeech wrote:
The potential for a CS500 or 700?


No financial resources at the time for this.


And Boeing and the US government want to make sure that BBD never gets the financial resources for it.
 
User avatar
EMBSPBR
Posts: 630
Joined: Thu Aug 10, 2017 9:03 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 6:17 pm

YYZLGA wrote:
EMBSPBR wrote:
SonOfABeech wrote:
The potential for a CS500 or 700?


No financial resources at the time for this.


And Boeing and the US government want to make sure that BBD never gets the financial resources for it.


This is another story ...
They do not have it now and they probably will not have it in a near future ...
It's all about financial resources.
Source:/www.bloomberg.com/news/articles/2017-02-07/canada-said-to-announce-funding-for-bombardier-tuesday-night

"Bellemare said the Canadian assistance would enable Bombardier to “weather near-term market challenges” and develop new jets.
He declined to specify what kinds of new planes the company might study after the Global 7000.
A potential larger variant of the C Series, dubbed the CS500, isn’t on the table at the present time, Bellemare said."
 
bigjku
Posts: 1906
Joined: Sat Feb 17, 2007 10:51 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 6:20 pm

YYZLGA wrote:
EMBSPBR wrote:
SonOfABeech wrote:
The potential for a CS500 or 700?


No financial resources at the time for this.


And Boeing and the US government want to make sure that BBD never gets the financial resources for it.


Again I would ask, since it’s the biggest component of the number, what one thinks is a reasonable annual return on the investment made by Quebec. All we have to do then is figure out what that works out to over the expected life of the investment and compare it to what we are getting/expect to get to know how much of a subsidy there was.

Anyone want to toss a number out and defend it? No one has a problem with them obtaining equity or funding on commercial terms.
 
Sancho99504
Posts: 695
Joined: Sun Dec 11, 2005 2:44 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 6:21 pm

As a taxpayer in the state of Washington, I'm fed up with Boeing and their shit. They threaten the state every year that if they don't get tax breaks, they'll be forced to layoff employees, move to a more corporate friendly state. They say things like "without new tax breaks, we will have no choice but to build 777x here or there" or "without new tax breaks, we'll have to outsource x to x". They get their tax breaks, turn around and lay 5,000 people off, open a new assembly line in South Carolina. Just last year, they got an extension on an old tax break so they wouldn't have to lay anyone off then layed off another 5,000 people in Washington.

How the he'll can they sleep at night when they exercise the same practices they're accusing BBD of? They didn't get Air Canada to order the Max over NEO because the Max is superior...... I guess I just can't stand hypocrites.
kill 'em all and let God sort 'em out-USMC
 
User avatar
EMBSPBR
Posts: 630
Joined: Thu Aug 10, 2017 9:03 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 7:00 pm

Sancho99504 wrote:
As a taxpayer in the state of Washington, I'm fed up with Boeing and their shit. They threaten the state every year that if they don't get tax breaks, they'll be forced to layoff employees, move to a more corporate friendly state. They say things like "without new tax breaks, we will have no choice but to build 777x here or there" or "without new tax breaks, we'll have to outsource x to x". They get their tax breaks, turn around and lay 5,000 people off, open a new assembly line in South Carolina. Just last year, they got an extension on an old tax break so they wouldn't have to lay anyone off then layed off another 5,000 people in Washington.
How the he'll can they sleep at night when they exercise the same practices they're accusing BBD of? They didn't get Air Canada to order the Max over NEO because the Max is superior...... I guess I just can't stand hypocrites.


It is the same in Brazil.
We call this "tariff war".
Every time a new company wants to settle in or expand in Brazil there is an immense lobby by the states that will grant more tax benefits to win the dispute.
However, many of these tariff concessions have a predetermined date to end. And when this happens, a new "battle" is started in order to keep or lose the company to another state.
If on the one hand this practice brings short-term benefits to the states, over time it unbalances the market with companies that have already been installed and do not have the same tariff concessions, creating pressure and weariness between companies and local governments.
Another negative factor is that many of these companies, attracted by tax benefits, are not successful due to the poor valuation of the resources offered, or due to the scarce local market, or the lack of infrastructure, or the specialized work, or all of this ...
In the state in which I live, the State of São Paulo, these concessions are rare in recent times, since the deficiencies I mentioned above practically do not exist ...
 
CS500
Posts: 39
Joined: Mon Sep 25, 2017 4:31 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 7:37 pm

Bobloblaw wrote:
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


So it changes with the exchange rate (so exepect that number to narrow in the last half of 2017 with the increase in the CAD/US dollar), but in 2015 the US had a $11.9 Bil trade surplus with Canada, and we buy the most US goods of any country on Earth, and on a % of trade basis, the surplus/deficit is effectively a rounding error.

In short, this is a very balanced trade relationship between the two countries.
 
jmt18325
Posts: 142
Joined: Sat May 07, 2016 6:08 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 7:47 pm

Bobloblaw wrote:
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


The US runs a surplus when services are included in the total.
 
YYZLGA
Posts: 439
Joined: Fri Dec 09, 2016 4:28 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 8:53 pm

bigjku wrote:

Again I would ask, since it’s the biggest component of the number, what one thinks is a reasonable annual return on the investment made by Quebec. All we have to do then is figure out what that works out to over the expected life of the investment and compare it to what we are getting/expect to get to know how much of a subsidy there was.

Anyone want to toss a number out and defend it? No one has a problem with them obtaining equity or funding on commercial terms.


It's impossible to reasonably calculate a long-term return on a speculative project like the CSeries. It's all based on your assumptions. What we know is that they invested a billion dollars for half an aircraft project, which is considerably less than half of what BBD had spent already. That strongly suggests that it was far from being completely unreasonable. In terms of its value going forward, it completely depends. If it doesn't get any more sales, the investment is likely worth nothing. But the CSeries is, by common agreement, the most advanced aircraft in an important sector. If it is able to get traction, and get stretched into a CS500 that would probably have the lowest CASM in the biggest aircraft segment worldwide, it could be enormously lucrative. Basically, it's a high-risk, high-reward investment that seems pretty close to commercial. To be frank, if I were offered a stake in the CSeries project for the price Quebec paid, I'd make that investment. I wouldn't bet my life savings and I'd recognize I might lose my money, but I'd also recognize that I could end up making a lot.

To produce their desired tariff, the US assumed that the CSeries had no value and deemed the entire investment to be subsidy. I'd say that's pretty implausible.
 
bigjku
Posts: 1906
Joined: Sat Feb 17, 2007 10:51 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 9:30 pm

YYZLGA wrote:
bigjku wrote:

Again I would ask, since it’s the biggest component of the number, what one thinks is a reasonable annual return on the investment made by Quebec. All we have to do then is figure out what that works out to over the expected life of the investment and compare it to what we are getting/expect to get to know how much of a subsidy there was.

Anyone want to toss a number out and defend it? No one has a problem with them obtaining equity or funding on commercial terms.


It's impossible to reasonably calculate a long-term return on a speculative project like the CSeries. It's all based on your assumptions. What we know is that they invested a billion dollars for half an aircraft project, which is considerably less than half of what BBD had spent already. That strongly suggests that it was far from being completely unreasonable. In terms of its value going forward, it completely depends. If it doesn't get any more sales, the investment is likely worth nothing. But the CSeries is, by common agreement, the most advanced aircraft in an important sector. If it is able to get traction, and get stretched into a CS500 that would probably have the lowest CASM in the biggest aircraft segment worldwide, it could be enormously lucrative. Basically, it's a high-risk, high-reward investment that seems pretty close to commercial. To be frank, if I were offered a stake in the CSeries project for the price Quebec paid, I'd make that investment. I wouldn't bet my life savings and I'd recognize I might lose my money, but I'd also recognize that I could end up making a lot.

To produce their desired tariff, the US assumed that the CSeries had no value and deemed the entire investment to be subsidy. I'd say that's pretty implausible.


That’s reasonable and I don’t disagree it may be high.

But I am not sure I would do it with equity and for a company on the verge of BK. BBD was already selling stock and no one else showed up who was willing to buy under the terms offered. If I am a commercial player I also have the option of buying up the pieces in liquidation when the company folds for lack of cash.

Anyways I agree that number they calculated may be high. But a reasonable number is something north of the billion put in and south of 13 billion you could compound it out to if you demanded very high rates of return comparable If you split the difference and cut it in half I don’t see that it makes a practical impact.

And that is the functional problem really. It doesn’t matter if it’s an 80% number or a 200% number. It won’t sell with either applied will it? I don’t see how it ends up lower through a well defined process like this. The numbers are what they are.
 
Jamie514
Posts: 154
Joined: Thu May 18, 2017 4:36 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 9:32 pm

Maybe since the 73G is found a "suitable substitute" to the CS100, then by that very same stretch of reality, the CS300 is obviously a viable option to any domestic Canadian operator seeking new capacity in the "150-200 seat" category. They are welcome to continue importing 8Max at the standard 220% transborder tariff established by the Americans as an alternative./joke

To those celebrating the protection of American jobs: Canadas Minister of Foreign Affairs, Chrystia Freeland yesterday pegged the (over 50% of the total plane) US supply chain for the CSeries at 24000 employees in 17 states. Tens of thousands of high quality aerospace jobs for Americans at stake with this action for which Boeing offers no similar competitor. Go celebrate your MAGA victory.

Imbeciles.

Edit: corrected Freeland's title.
 
multimark
Posts: 466
Joined: Sat Jul 29, 2006 1:53 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 10:26 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.


You don't know Canada very well. By law Air Canada's head office is required to be in Montreal. Vote-rich Quebec is also crucial to Trudeau and the federal Liberal party winning re-election in 2019. Air Canada has hidden behind the federal governments skirts regarding EK and other MidEast carriers for years. A subtle threat to end that protection is all that might be required to switch them to Airbus. Add to that the fact that the Canada-EU free trade agreement is just going into effect at the time the USA is seeking to end its free trade agreements.

It's fascinating, though not surprising, to see the knee jerk reaction of so many American posters that Boeing and the US Dept of Commerce can't possibly be wrong. Obviously they didn't follow the skullduggery of the KC-46 procurement process. Or follow how many times the USA loses at trade tribunals when impartial judgements are passed on their bullying trade tactics. The USA is a trade bully, pure and simple. We are fortunate to live in a time when the USA is being eclipsed by China, thereby giving international businesses another outlet for their goods. No amount of trade disputes will stave off that inevitable decline, indeed it will exacerbate it,.
 
Sancho99504
Posts: 695
Joined: Sun Dec 11, 2005 2:44 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 10:48 pm

jeffrey0032j wrote:
Super80Fan wrote:
I think it's time to change the phrase around a bit: "If it's Boeing, I'm not going". Disgraceful company, heavily involved in politics, killed McDonnell Douglas, and is trying to make a monopoly. Hope the Feds raid them on something.

Airbus killed McDonnell Douglas with EU support. MD had no chance in that bloodbath. The MD80 could compete with the 737 classic, but things changed with the A320.


Boeing and Airbus did not kill McDonnell Douglas. John McDonnell killed McDonnell Douglas. He decided it was better to pinch pennies and not put a new wing on the MD-11, MD90 or MD95. They seriously missed performance targets on all 3 and ended taking a huge financial hit to the MD-11 program because it couldn't come close to doing what it was promised to do. They put lipstick on a pig and paid dearly for it.
kill 'em all and let God sort 'em out-USMC
 
Sancho99504
Posts: 695
Joined: Sun Dec 11, 2005 2:44 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 10:57 pm

multimark wrote:
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.


You don't know Canada very well. By law Air Canada's head office is required to be in Montreal. Vote-rich Quebec is also crucial to Trudeau and the federal Liberal party winning re-election in 2019. Air Canada has hidden behind the federal governments skirts regarding EK and other MidEast carriers for years. A subtle threat to end that protection is all that might be required to switch them to Airbus. Add to that the fact that the Canada-EU free trade agreement is just going into effect at the time the USA is seeking to end its free trade agreements.

It's fascinating, though not surprising, to see the knee jerk reaction of so many American posters that Boeing and the US Dept of Commerce can't possibly be wrong. Obviously they didn't follow the skullduggery of the KC-46 procurement process. Or follow how many times the USA loses at trade tribunals when impartial judgements are passed on their bullying trade tactics. The USA is a trade bully, pure and simple. We are fortunate to live in a time when the USA is being eclipsed by China, thereby giving international businesses another outlet for their goods. No amount of trade disputes will stave off that inevitable decline, indeed it will exacerbate it,.


I'm an American that believes in taking care of Americans first and I'm vehemently opposed to this ridiculous ruling. Not only does Boeing receive a ludicrous amount of government subsidies in the form of tax breaks, they continue to use the excuse that they'll have to lay people off if they don't get their tax breaks and then lay those people off 6 months later. People don't realize that this ruling, should it stand, will have long term implications on Boeing exports beyond what is already ordered. I bought a Kia a couple years ago for the primary reason of it being assembled in the USA and uses nearly 65% US manufactured parts, unlike its US competitors at roughly 37% US manufactured parts.
kill 'em all and let God sort 'em out-USMC
 
Bobloblaw
Posts: 2406
Joined: Fri Jan 13, 2012 1:15 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 11:01 pm

multimark wrote:
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,"


. The USA is a trade bully, pure and simple. We are fortunate to live in a time when the USA is being eclipsed by China, thereby giving international businesses another outlet for their goods. No amount of trade disputes will stave off that inevitable decline, indeed it will exacerbate it,.


Yes a trade bully with a $600b annual merchandise trade deficit.

Too bad but looks like the CS will be joining the Avro Aero.
 
yyztpa
Posts: 188
Joined: Fri Mar 03, 2006 7:10 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 11:03 pm

bigjku 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,"

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.

Listen,

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?


I think it was fair to expect under the rules as written that there was an expectation of tariff. I think what we are seeing is the reaction to the degree of the tariff which far exceed even what the petitioner was requesting..
 
MSPNWA
Posts: 3694
Joined: Thu Apr 23, 2009 2:48 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 11:10 pm

Jamie514 wrote:
To those celebrating the protection of American jobs: Canadas Minister of Foreign Affairs, Chrystia Freeland yesterday pegged the (over 50% of the total plane) US supply chain for the CSeries at 24000 employees in 17 states. Tens of thousands of high quality aerospace jobs for Americans at stake with this action for which Boeing offers no similar competitor. Go celebrate your MAGA victory.


Even if that number is completely accurate, which is undoubtedly not the whole truth, it is a fraction of the jobs that a Boeing order supports, meaning every aircraft ordered from Bombardier instead of Boeing is a much, much more significant loss to the American economy that harming only the CSeries line at PW. And using illegal measures to do it? Not acceptable anywhere at any time. Nice try on using insults instead of facts and reason to determine the wisest action.
 
yyztpa
Posts: 188
Joined: Fri Mar 03, 2006 7:10 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 11:18 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.


I understand BBD is the largest employer in N Ireland. Lack of jobs has been known to cause civil strive in many parts of the world. It wasn't that long ago that N Ireland was in turmoil and that turmoil included terrorism in the streets of London and assassinations within the Royal Family.
The UK government under Theresa May is a minority government only in power due to an alliance with the Northern Ireland's Democratic Unionist Party’s (DUP). Satisfying the DUP is key to delivering on Brexit and other policies in addition to maintaining peace in N Ireland.
 
User avatar
YULspotter
Posts: 132
Joined: Thu Mar 30, 2006 11:47 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 11:23 pm

Boeing's complaint and the US Trade Commission's ruling will only serve to hurt the US in the long run. Here are some excepts of letters from US politicians to the US Trade Commission.

Sen. Blumenthal, Sen. Murphy, and Rep. Larson from Connecticut: "[W]e write urging you to closely examine the merits of the dispute and refrain from taking action that will endanger the many jobs in Connecticut that depend upon Bombardier." "These [C Series] planes are critically important to Connecticut. The company buys the plane's state-of-the-art Geared Turbofan Engine from Connecticut-based Pratt & Whitney. Bombardier also buys parts and supplies from many Connecticut-based aerospace companies."

Sen. Moran, Sen. Roberts, and Rep. Estes from Kansas, and Sen. Capito, Sen. Machin, and Rep. McKinley from West Virginia: "Bombardier's C Series . . . is an example of the company's significant contributions to the U.S. economy." "[M]ore than 50 percent of each aircraft's content is sourced from U.S. suppliers." "[W]e encourage you to work with the parties and the government of Canada to find a responsible solution that acknowledges the material economic benefit both parties generate for the United States and allows their long-term positive influence on our economy to continue."

Governor Justice, West Virginia: ""I am writing to raise a potential concern in this instance, specifically the unintended negative economic impacts this case could generate for West Virginia and the greater United States. I am referring to the consequences this process could have on an aircraft that contains significant U.S. content as well as high promise for creating jobs and economic benefit in this country."

... and quotes from US based carriers:

jetBlue: "The C Series is the only aircraft offering a newly designed five-abreast interior. The aircraft's interior has won praise from commentators and our competitors alike, which aligns with our history of product differentiation. Second, the C Series has the potential to reduce an airline's operating costs through a more efficient geared turbofan engine, which aligns with our strategy of maintaining a low cost structure. If the petitions prevail, JetBlue will lose access to a competitive and innovative platform that could bring significant benefits to the American flying public.
.Boeing makes no comparable aircraft to the C Series (by number of seats or seat configuration). Imposing tariffs on the C Series would potentially benefit Embraer, not Boeing or the U.S. aerospace industry, and tariffs would burden Americans with higher airfares, less innovative aircraft and reduced competition."

Sun Country: "Sun Country believes that innovation and aircraft development are essential to moving the industry forward and bringing new and better services to passengers." "Sun Country therefore opposes the antidumping and countervailing duties sought by Boeing against the Bombardier C Series. These duties, which effectively operate as a tax on U.S. passengers and increases ticket prices, are counterproductive and inappropriate."

Spirit: "Should Spirit decide it needs an aircraft in the 100-140 seat class, it would not consider Boeing or Airbus, as neither of those manufacturers makes an aircraft in that size. If Boeing prevails, Spirit will lose access to a competitive and innovative platform that could bring significant benefits to the American flying public."

Sorry but Boeing and US trade commission are the bad guys here. They've decided to start a trade war with their greatest ally and largest trading partner. If it's a war they want, then a war they will get.
Don't let Canadian's reputation of always being polite fool you., This time it seems, Canadians will be fighting back. Video from a rally in Toronto this week: https://youtu.be/brRO0egVGlw

YULspotter
 
JoeCanuck
Posts: 4704
Joined: Mon Dec 19, 2005 3:30 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 11:33 pm

bigjku wrote:
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.


It is a simple case; nothing BBD did caused any harm to Boeing....period. BBD testified to that, as did the, American, customer.

Yet Boeing, which was never being considered, is claiming that they were harmed, even though they admitted they didn't have a new build product to offer Delta.

Not just that, their absurd claims about how the sale to Delta puts the very future of the company in jeopardy, should put very syllable they utter in doubt.

But this is a US company making claims in US legal proceedings so anyone expecting anything other than a reality show's level of credibility, was bound to be disappointed.

The fact that us companies and workers actually ARE being harmed by this decision, is just more irony on the cake.
What the...?
 
MSPNWA
Posts: 3694
Joined: Thu Apr 23, 2009 2:48 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 11:42 pm

JoeCanuck wrote:
It is a simple case; nothing BBD did caused any harm to Boeing....period. BBD testified to that, as did the, American, customer.

Yet Boeing, which was never being considered, is claiming that they were harmed, even though they admitted they didn't have a new build product to offer Delta.


Demonstrably false. And Delta's own words prove it.
Last edited by MSPNWA on Wed Sep 27, 2017 11:49 pm, edited 1 time in total.
 
ytz
Posts: 3529
Joined: Thu Jun 25, 2009 12:31 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 11:43 pm

KarelXWB wrote:
F9Animal wrote:
I also hope Air Canada and West Jet turns it's backs on Boeing. This modern day mafia of a company makes me sick.


Air Canada is a private company, I'm sure they don't care that much.

In an alternate reality, the Canadian gouvernement would propose an import tariff on Boeing products. Then Air Canada would automatically walk away from Boeing aircraft as those products would become too expensive.

That of course won't happen.



Air Canada has been protected from the ME3 to an extent that is just unimaginable for American and European carriers. The government has also dragged its feet on allowing airlines like Norwegian to set up in Canada. Trudeau needs to tell them in no uncertain terms that if they don't drop that Boeing order, he'll open the flood gates to the ME3, TK, Norwegian, etc.. Air Canada and Westjet have benefited tremendously from government protectionism. Time to pay up.

Also, many here are ignoring the UK dimension of this:

https://www.theguardian.com/business/20 ... bardier-us

Forget the 18 Super Hornets. Let's see what Boeing says if the UK decides to drop an order for 80 Apaches.
Last edited by ytz on Thu Sep 28, 2017 12:08 am, edited 3 times in total.
 
oslmgm
Posts: 224
Joined: Wed Dec 03, 2014 6:29 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 11:50 pm

Bobloblaw wrote:
Yes a trade bully with a $600b annual merchandise trade deficit.


Exactly!
Or are you trying to say that a the trade deficit is proof of no bullying?
Bullying is about tactics. The size of the country makes that tactic possible. The deficit is irrelevant to the bullying question.
 
multimark
Posts: 466
Joined: Sat Jul 29, 2006 1:53 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Wed Sep 27, 2017 11:56 pm

MSPNWA wrote:
JoeCanuck wrote:
It is a simple case; nothing BBD did caused any harm to Boeing....period. BBD testified to that, as did the, American, customer.

Yet Boeing, which was never being considered, is claiming that they were harmed, even though they admitted they didn't have a new build product to offer Delta.


Demonstrably false. And Delta's own words prove it.


Nonsense. The 737 isn't a direct competitor. If Boeing was serious about that market they wouldn't be flogging a geriatric pig with lipstick that had its origin when Noah was a boy. The 737 sells because of corporate inertia and fleet commonality and Boeing is terrified of competitors that actually go out on a limb with a new design.
 
User avatar
Aesma
Posts: 12743
Joined: Sat Nov 14, 2009 6:14 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Thu Sep 28, 2017 12:26 am

Bobloblaw wrote:
multimark wrote:
KarelXWB wrote:
The USA is a trade bully, pure and simple. We are fortunate to live in a time when the USA is being eclipsed by China, thereby giving international businesses another outlet for their goods. No amount of trade disputes will stave off that inevitable decline, indeed it will exacerbate it,.


Yes a trade bully with a $600b annual merchandise trade deficit.

Too bad but looks like the CS will be joining the Avro Aero.


The deficit is caused by the lack of competitiveness of your production (my country has a trade deficit for the same reason). Many of the leading US products someone foreign might buy aren't actually made in the US, for example the iPhone. The iPhone is humongously expensive yet it's made in China, is that our fault ?

You can play unfairly and lose anyway.
New Technology is the name we give to stuff that doesn't work yet. Douglas Adams
 
iamlucky13
Posts: 1157
Joined: Wed Aug 08, 2007 12:35 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Thu Sep 28, 2017 12:29 am

washingtonflyer wrote:
One little wrinkle that folks should be aware of......The USITC's preliminary determination was a threat determination - not injury. What that means is that the USITC found that there was no reasonable basis to believe that the domestic industry is -currently- harmed by imports. That determination was made using a very low standard of assessment.

The USITC will get to revisit the matter in the final phase. If, and this is a BIG if, the USITC goes affirmative in its final determination, you can be 98% sure that the USITC would find threat again. After all, if the USITC could not find current injury in a preliminary phase, the likelihood of the USITC finding injury in the final phase is very small. In all my years doing this, Ive think Ive seen it once - and that case involved some rather extraordinary circumstances.

The effect of this is that duties that get paid between now and, say, next January or February will be refunded, and cash deposits (new duties) would not go into effect until the USITC issues its final determination.

A little nuanced piece of US trade and customs law.

Of course, we have to get to an affirmative final for that to happen.....


That doesn't sound nuanced. It sounds like a critical distinction in understanding the future evolution of this case.

If only a threat and no actual injury is found, does that not mean the Delta sale is in the clear, and effectively that Bombardier simply has to be careful not to underprice future sales where Boeing is an actual contender?
 
User avatar
YULspotter
Posts: 132
Joined: Thu Mar 30, 2006 11:47 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Thu Sep 28, 2017 1:19 am

Take that Boeing ...

Bombardier Nears $1.25 Billion C Series Deal With Air Baltic
https://www.bloomberg.com/news/articles ... air-baltic
 
surfdog75
Posts: 270
Joined: Thu Nov 17, 2005 5:39 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Thu Sep 28, 2017 1:26 am

MSPNWA wrote:

Demonstrably false. And Delta's own words prove it.


Where? Delta claimed Boeing was not part of the RFP because they lacked a product Delta was looking for. My personal opinion is Delta will go ahead with this deal one way or another and make it work. They are very excited about acquiring the aircraft.
 
CX747
Posts: 6196
Joined: Tue May 18, 1999 2:54 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Thu Sep 28, 2017 1:56 am

Everyone should take a deep breath and a step back. These are PROPOSED tarriffs that just so happen to have been put forward during NAFTA negotiations. Let's really wait and see what happens.

Boeing has thought this through and went forward. If they suffer business wise, that's on them. At the end of the day, I don't see it happening. This is a bargaining chip, nothing more, nothing less.
"History does not long entrust the care of freedom to the weak or timid." D. Eisenhower
 
CX747
Posts: 6196
Joined: Tue May 18, 1999 2:54 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Thu Sep 28, 2017 2:05 am

YYZLGA wrote:
washingtonflyer wrote:
Actually, yes there was a WTO decision on lumber.

https://www.wto.org/english/tratop_e/di ... s257_e.htm


As your link indicates, there as no WTO decision. It was a "mutually agreed settlement," meaning that Canada surrendered and basically accepted an export tax on its lumber exports as the US demanded. This was because Canada knew the US wouldn't abide by any WTO decision on the issue.

jeffrey0032j wrote:
Airbus killed McDonnell Douglas with EU support. MD had no chance in that bloodbath. The MD80 could compete with the 737 classic, but things changed with the A320.


Maybe the problem is that MD's updated 60s technology simply couldn't compete with Airbus' brand new design in the marketplace. The reality is it takes a lot of money to develop a truly new aircraft technology. The upfront cost is gigantic and very difficult to obtain through conventional financial markets, whose interest is almost always quite short term--especially if the company isn't a tech startup. Airbus received considerable government support for its clean sheet designs. Boeing received billions in tax breaks plus had lavish military contracts to fall back on, but the 787 still nearly broke the company. Now, Bombardier has a new narrowbody design that everybody accepts is a significant improvement on what currently exists, and Boeing, helped by the US government, is trying to strangle it in the cradle to protect their updated 1960s era design. Can anybody honestly say this is good for commercial aviation?


MD had it's own issues. A state sponsored and financed manufacturer who didn't need to turn a profit killed it. That company is Airbus. Boeing was created by.... Mr. Boeing and has fought to get to where it is. Airbus was created by governments so they wouldn't lose out on a market.

So, the US loses a company because other country's want to be manufacturers too. Now the Canada tries it with the help of the U.K. who is back for round 2 after supporting Airbus. I'm surprised it has taken this long for Boeing to file a complaint.

In the end, Delta will get their CS aircraft, Canada will buy F/A-18s and the U.K. will increase their P-8 order and some other Boeing programs.

All in all, we are close allies. Let's work through an agreement that everyone can be happy with.
"History does not long entrust the care of freedom to the weak or timid." D. Eisenhower
 
sxf24
Posts: 986
Joined: Wed Aug 15, 2007 12:22 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Thu Sep 28, 2017 2:20 am

surfdog75 wrote:
MSPNWA wrote:

Demonstrably false. And Delta's own words prove it.


Where? Delta claimed Boeing was not part of the RFP because they lacked a product Delta was looking for. My personal opinion is Delta will go ahead with this deal one way or another and make it work. They are very excited about acquiring the aircraft.


I’ve heard Boeing was part of the original RFP, along with the other 3 OEMs. The RFP was the reissued to just Bombardier, written so that only the CSeries could win, prior to the selection.
 
CX747
Posts: 6196
Joined: Tue May 18, 1999 2:54 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Thu Sep 28, 2017 2:22 am

washingtonflyer wrote:
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.


There in lies the rub. A private entity filed a complaint against another private entity. The US Government put forward a proposed action. Somehow the Canadian and U.K. Governments got upset. Why would that happen? They shouldn't be involved in this at all. It is a tarriff against a supposed private company.

The problem is the U.K. and Canadian governments have been caught with their hands in the cookie jar. How the governments figure out how to go forward will be interesting.
"History does not long entrust the care of freedom to the weak or timid." D. Eisenhower
 
washingtonflyer
Posts: 1602
Joined: Sun Sep 08, 2013 9:45 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Thu Sep 28, 2017 2:57 am

CX747 wrote:
Everyone should take a deep breath and a step back. These are PROPOSED tarriffs that just so happen to have been put forward during NAFTA negotiations. Let's really wait and see what happens.

Boeing has thought this through and went forward. If they suffer business wise, that's on them. At the end of the day, I don't see it happening. This is a bargaining chip, nothing more, nothing less.


The tariffs are technically more than proposed - they're going into place on an interim basis. Commerce has told USCBP to collect cash deposits.

What happens to those deposits is another question - predicated on how Commerce rules in its final determination and how the USITC votes in its final phase.

The tariffs are indeed real.
 
washingtonflyer
Posts: 1602
Joined: Sun Sep 08, 2013 9:45 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Thu Sep 28, 2017 3:01 am

iamlucky13 wrote:
washingtonflyer wrote:
One little wrinkle that folks should be aware of......The USITC's preliminary determination was a threat determination - not injury. What that means is that the USITC found that there was no reasonable basis to believe that the domestic industry is -currently- harmed by imports. That determination was made using a very low standard of assessment.

The USITC will get to revisit the matter in the final phase. If, and this is a BIG if, the USITC goes affirmative in its final determination, you can be 98% sure that the USITC would find threat again. After all, if the USITC could not find current injury in a preliminary phase, the likelihood of the USITC finding injury in the final phase is very small. In all my years doing this, Ive think Ive seen it once - and that case involved some rather extraordinary circumstances.

The effect of this is that duties that get paid between now and, say, next January or February will be refunded, and cash deposits (new duties) would not go into effect until the USITC issues its final determination.

A little nuanced piece of US trade and customs law.

Of course, we have to get to an affirmative final for that to happen.....


That doesn't sound nuanced. It sounds like a critical distinction in understanding the future evolution of this case.

If only a threat and no actual injury is found, does that not mean the Delta sale is in the clear, and effectively that Bombardier simply has to be careful not to underprice future sales where Boeing is an actual contender?


Depends. Any entry of merchandise that comes in after the final determination (this is assuming a threat vote) will be assessed the 200% subsidy rate and whatever antidumping rate gets assigned to Bombardier. So, no Delta is not in the clear.

Underpricing sales and eliminating the underpricing could eliminate the dumping - but only after Commerce conducts what is called an administrative review of the sales made after the order goes in place. Commerce can also review what took place on the subsidy side, but countervailing duty margins are much more "sticky" than antidumping duty margins and can't easily be "managed" away.

Simply put, assuming USITC goes affirmative on a threat vote, any entry of goods that enter after the threat vote and the issuance of the order will be assessed duties.
 
iamlucky13
Posts: 1157
Joined: Wed Aug 08, 2007 12:35 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Thu Sep 28, 2017 3:28 am

Subsidies or not, the 219% tariff is bogus. That should be obvious from a few simple napkin calculations like CS500 did, but a few posters are struggling to understand that.

Now that I've had time to review the memo here, it provides the information necessary to concretely understand why, but it's a bit complicated:
viewtopic.php?f=3&t=1361667&start=850#p19845243

And because it got my attention and led me to look back in the thread for the memo, I'm going to flesh this out in contrast to the following comment:

bigjku wrote:
CS500 wrote:
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.


Did you read it? Between this and a couple of your later posts, I get the strong impression you have not.

I don't have time to discuss the full 34 pages, but just to focus on some of the most critical parts, if you think it is straight forward, perhaps you'd like to explain the formula:
A(k) = (y/n + (y - (y/n) * (k - 1))/d) / (1 + d)
...from 19 CFR 351.524 that you would have had to review in order to comprehend section VI, subsection A of the memo well enough to call it "straightforward."

Looking in particular at the Quebec investment, they conclude the $1 billion invested is a 147% subsidy. I've been pondering for the last several days, supposing we treat all the government involvement as subsidies at 100% value, what math says things like $1 billion equals 147% of $5.4 billion, even if we spread that value over several years and inflate it? Now I know.

It uses your "straightfoward" formula above, and a few other factors that for companies with consistent sales levels and an established product line makes sense, but in an highly cyclical industry like aerospace and with an in-development product is not much different from numerology.

Your discussion in later posts of the S&P, or Boeing's or Tesla's returns is irrelevant, especially since you're discussing the market price returns, not actual operating financial returns. Had you actually read and understood the memo, you would have gone to the the federal regulation it cited for determining the discount or return rate, and known to use a value somewhere in the range of 5.5% (Canada long term corporate bond average) to 7.5% (recently issued Bombardier 10 year bond rate according to Morningstar).

Assuming the higher rate, it seems the DOC determined to numerator in the subsidy ratio to be about US $163 million (per my Excel calc) - how much of the subsidy applies in the first year out of the 10 year subsidy "use" period. The denominator was the 2016 CSeries sales. I can't seem to find the document where they determined that value, nor can I corroborate the figure they use from other sources like Bombardier's 2016 financial results, which don't show that level of detail, but there's enough information to get very close regardless. Commerce Department's figure for 2016 CSeries sales was roughly US $111 million.

Basically, Commerce department's analysis assumes the subsidies are proportionate to Bombardier earning $111 million per year for the next decade.

It's not a number of any coherence in terms of evaluating the actual subsidy value. It's actually rather like calculating a personal budget on payday, and assuming you get that much money every day even though you're payed biweekly.

If we use more realistic long-term program numbers (eg: 10 frames/month, $30 million per frame), the result is that $1 billion works out to something like a 4.5% subsidy. A proper analysis would be more complicated, and I think yield something in the really rough ballpark of a 6% subsidy.
 
iamlucky13
Posts: 1157
Joined: Wed Aug 08, 2007 12:35 pm

Re: Boeing targets Bombardier for “price dumping” CSeries

Thu Sep 28, 2017 3:32 am

washingtonflyer wrote:
iamlucky13 wrote:
washingtonflyer wrote:
One little wrinkle that folks should be aware of......The USITC's preliminary determination was a threat determination - not injury. What that means is that the USITC found that there was no reasonable basis to believe that the domestic industry is -currently- harmed by imports. That determination was made using a very low standard of assessment.

The USITC will get to revisit the matter in the final phase. If, and this is a BIG if, the USITC goes affirmative in its final determination, you can be 98% sure that the USITC would find threat again. After all, if the USITC could not find current injury in a preliminary phase, the likelihood of the USITC finding injury in the final phase is very small. In all my years doing this, Ive think Ive seen it once - and that case involved some rather extraordinary circumstances.

The effect of this is that duties that get paid between now and, say, next January or February will be refunded, and cash deposits (new duties) would not go into effect until the USITC issues its final determination.

A little nuanced piece of US trade and customs law.

Of course, we have to get to an affirmative final for that to happen.....


That doesn't sound nuanced. It sounds like a critical distinction in understanding the future evolution of this case.

If only a threat and no actual injury is found, does that not mean the Delta sale is in the clear, and effectively that Bombardier simply has to be careful not to underprice future sales where Boeing is an actual contender?


Depends. Any entry of merchandise that comes in after the final determination (this is assuming a threat vote) will be assessed the 200% subsidy rate and whatever antidumping rate gets assigned to Bombardier. So, no Delta is not in the clear.

Underpricing sales and eliminating the underpricing could eliminate the dumping - but only after Commerce conducts what is called an administrative review of the sales made after the order goes in place. Commerce can also review what took place on the subsidy side, but countervailing duty margins are much more "sticky" than antidumping duty margins and can't easily be "managed" away.

Simply put, assuming USITC goes affirmative on a threat vote, any entry of goods that enter after the threat vote and the issuance of the order will be assessed duties.


If the date of entry of merchandise is significant, then that leads me back to a previous question I never saw answered: what was the date of sale in the first place? Has a violation even occurred yet or is this anticipatory based on the expectation that Bombardier is going to deliver merchandise next year for a price that will constitute dumping?
 
RJMAZ
Posts: 1946
Joined: Sat Jul 09, 2016 2:54 am

Re: Boeing targets Bombardier for “price dumping” CSeries

Thu Sep 28, 2017 3:42 am

SonOfABeech wrote:
Newbie-ish question that might be out of place here, but I don't know where else to put it: What is it about the C-Series that scares Boeing (and to a lesser extent Airbus) so much, while they seem to get along with Embraer's offerings? The potential for a CS500 or 700?

If Boeing does nothing the CS300 sales would continue to trickle in. Bombardier would eventually launch the CS500 which would have better CASM and similar seating capacity to the Max8. Bombardier if left unchallenged in 10 years time they could be producing 20 C series per month. That's would be a huge hit on the 737.

Embraer E195 is maxed out. With 4 abreast it could never reach 737 territory and would never have a CASM advantage.

In hindsite the C Series should have been built lighter/smaller with the same sized fuselage but the rest of the structure underneath scaled down by 10-15%. Range would be reduced by 800-1000nm but CASM would have improved by 10%. The CS500 suggestion has only been floated around after everyone released how large and heavy and overbuilt the CS300 is.

They underestimated the CASM advantage they needed to break into a new market. Airlines won't risk adding a new type if CASM if the same. They could have gained a few percentage points by making the fuselage narrower using standard 17inch seats. You don't need premium economy seats on short flights.
  • 1
  • 5
  • 6
  • 7
  • 8
  • 9
  • 29

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos