jeffrey0032j
Posts: 669
Joined: Wed Jun 15, 2016 3:11 pm

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

Mon Oct 02, 2017 5:28 pm

northstardc4m wrote:
jeffrey0032j wrote:

Well see that's the problem with the US position... the WTO WILL look at the United deal and at Boeing's position in relationship to Bombardier's, and EMBRAER's previous dealings and whatever incentives all 3 have offered and what subsidies of any kind are in play... and that will not go well. Odds are they will null out alot of the tariff in that case if not basically tell all sides to make a deal or else.

No one is squeaky clean here... and anyways as I've said before the Boeing/BBD/tariff issue smacks of NAFTA trade negotiation ploy as much as justifiable trade law... don't be surprised to see it negotiated down/away in the NAFTA discussions.

EMBRAER's appeal to the WTO will likely run around for years before any ruling... and then appeals... if any ruling ever comes, and even then will not be anywhere near the tariff the US is pushing.

WTO cannot look into United's deal as it is done within a domestic setting. It is not dumping (and we aren't even sure if Boeing was even selling below cost) when you do it in your own country, and therefore it isn't against trade regulations. That comes under the purview of domestic competition authorities.

Then again, for the CSeries BBD gave a discount to AC that is of a similar magitude (around 60% - 70%) of the UA 737-700 deal. So, given your argument, BBD should also be fined in that case. But I have to repeat myself, it is not against trade regulations even if Boeing is found to have sold below cost (which we don't have proof of it) to a US carrier.
Last edited by jeffrey0032j on Mon Oct 02, 2017 5:31 pm, edited 1 time in total.
 
User avatar
SheikhDjibouti
Posts: 1931
Joined: Sat Sep 30, 2017 4:59 pm

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

Mon Oct 02, 2017 5:30 pm

jeffrey0032j wrote:
As I have said before, Airbus and Boeing have been found to be receiving illegal subsidies before by WTO. Why should the Canadian government or BBD think they are above this?


Totally agree.
But please help me out here; what were the sanctions imposed by WTO against Airbus and Boeing?
220% ?
22% ?
2.2% ?
Ok, sarcasm aside, I am asking a genuine question here. What were the sanctions, and how do they compare?
Nothing to see here; move along please.
 
User avatar
northstardc4m
Posts: 3327
Joined: Fri Apr 28, 2000 11:23 am

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

Mon Oct 02, 2017 5:35 pm

Here's the whole ruling

Basically the US/Boeing won but there was 0 settlement after they abandoned arbitration.

https://www.wto.org/english/tratop_e/di ... s316_e.htm

Also im not claiming they can impose duties or tariffs in regards to the United or any domestic deals, but they CAN rule it was a contravening factor in the dispute against Boeing in favor of BBD, or vice versa for the AC deal if they can find some sort of justification. Just read the factors in the Boeing Airbus ruling and you'll see they definitely looked at domestic and international issues in their determinations.
Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.
 
c933103
Posts: 3955
Joined: Wed May 18, 2016 7:23 pm

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

Mon Oct 02, 2017 6:29 pm

jeffrey0032j wrote:
As for the comparison with Fokker 70/100, the Dutch eventually allowed Fokker to fail. Canada didn't do so for BBD, and did the opposite by stuffing money into BBD, and had done so quite blatantly. This is the whole point of the case against BBD/Canada. The trade officials are not going to focus on how nice the other planes are, they are primarily concerned about how the products were financed. If BBD did indeed receive subsidies that are contrary to trade regulations, then they should be prepared to face the consequences. If they didn't, they should bring their evidence to the Canadian government who should defend BBD. Simple as that. The tricky part here is, that the Canadian and Quebec governments may not be willing to provide such evidences (if there was any in the first place), as they are as much involved in this as BBD. Not forgetting that there is currently a WTO case against BBD by Brazil.

As I have said before, Airbus and Boeing have been found to be receiving illegal subsidies before by WTO. Why should the Canadian government or BBD think they are above this?

How would Fokkers compete against Boeing products?
The message in signature have been removed according to demand.
 
Waterbomber
Posts: 849
Joined: Sat Jul 09, 2016 11:51 am

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

Mon Oct 02, 2017 6:42 pm

I still think that you guys are too negative about this case.
Sure, BBD is going to lose the Delta order and maybe any business from the U.S., but instead of taking BBD down, it will save them money.
This is also what Leahy is saying. 7 million loss per aircraft x 75 aircraft is still a loss for BBD, no matter how you look at it.
Tom Enders was wrong not to integrate the Cseries into Airbus when they could get it for free. Leahy must be biting his nails on this, but Enders is the boss so what can he do? However, now Enders must come under pressure as Airbus sales teams don't have any A320NEO slots to sell for the foreseeable future.

Second of all, even the U.S. market isn't completely lost when you consider that 55% of the CSeries is U.S. content. Sure, the tariff applies to whatever is written on the invoice and imported into the U.S., but BBD can agree that each airline could pay the U.S. equipment manufacturers directly as is customary for the engines and even for seats nowadays. BBD could then charge commissions on those direct sales. This way, for instance BBD could invoice the airframe and the assembly work to the airline at a very low rate, and the airline pays the 250% tariff on 2-3 million USD. This way, sure they are subsidised and they're dumping it whatever, but they're punished for it.
However, good luck tracing what each airline is paying to which manufacturer and how much of it goes as commission to BBD... Such a scheme would also make it more apparent that the CSeries is an American aircraft more than it is Canadian, appeasing the U.S. administration. One could even go as far as to wonder if the U.S. shouldn't be subsidising the Cseries rather than try to kill it?

At the end of the day I wonder if this isn't going to turn into one of those love stories that started with a fight and that Boeing isn't going to end up buying BBD...
It makes sense after all. Boeing could really use the BBD business jet line-up to expand its BBJ portfolio and the CSeries is a perfect way for them to get a full line-up between 120 and 230 seats. Airbus has ATR and Boeing could compete directly using the Q400.
Last edited by Waterbomber on Mon Oct 02, 2017 6:52 pm, edited 1 time in total.
 
Amiga500
Posts: 2627
Joined: Tue Mar 03, 2015 8:22 am

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

Mon Oct 02, 2017 6:50 pm

Waterbomber wrote:
Second of all, even the U.S. market isn't completely lost when you consider that 55% of the CSeries is U.S. content.


You raise a very interesting point.

By what measure is it 55% US content?

- weight
- volume
- component count
- value

I think it is safe to assume that it is not the suppliers taking the "onerous contract provision" on the DL sales. So, lets say BBD can build the aircraft for $35m USD, sell to DL for $25m and lose $10m per frame. But, if 55% of the frame is US content (@ 35m, that is $19.25m), 19.25/25 = 77%. So by value, 77% of the sold item is US sourced.

Given the anti dumping law exists to prevent foreign companies taking money away from US companies, is the law actually being broken?

What is the yardstick for US content for it to not be considered for tariffs?
 
User avatar
northstardc4m
Posts: 3327
Joined: Fri Apr 28, 2000 11:23 am

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

Mon Oct 02, 2017 6:54 pm

Amiga500 wrote:
What is the yardstick for US content for it to not be considered for tariffs?


Basically by assembling the Aircraft in Canada, the US content counts as 0 as i understand it. That's why there was a discussion about setting up an assembly line in the US.
Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.
 
User avatar
aerolimani
Posts: 1298
Joined: Tue Jun 18, 2013 5:46 pm

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

Mon Oct 02, 2017 6:57 pm

Waterbomber wrote:
…even the U.S. market isn't completely lost when you consider that 55% of the CSeries is U.S. content. Sure, the tariff applies to whatever is written on the invoice and imported into the U.S., but BBD can agree that each airline could pay the U.S. equipment manufacturers directly as is customary for the engines and even for seats nowadays. BBD could then charge commissions on those direct sales. This way, for instance BBD could invoice the airframe and the assembly work to the airline at a very low rate, and the airline pays the 250% tariff on 2-3 million USD. This way, sure they are subsidised and they're dumping it whatever, but they're punished for it.


Could they actually get away with that? I must say it's very clever. It would certainly keep everybody's accountants and lawyers busy.

Waterbomber wrote:
However, good luck tracing what each airline is paying to which manufacturer and how much of it goes as commission to BBD... Such a scheme would also make it more apparent that the CSeries is an American aircraft more than it is Canadian, appeasing the U.S. administration. One could even go as far as to wonder if the U.S. shouldn't be subsidising the Cseries rather than try to kill it?

Ha! :lol: Thanks for that bit of levity.

I've said it before. This action only protects the interest of one US company, at the expense of every US airline, every US supplier to BBD, and every American BBD employee.
 
Waterbomber
Posts: 849
Joined: Sat Jul 09, 2016 11:51 am

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

Mon Oct 02, 2017 6:58 pm

Amiga500 wrote:
Waterbomber wrote:
Second of all, even the U.S. market isn't completely lost when you consider that 55% of the CSeries is U.S. content.


You raise a very interesting point.

By what measure is it 55% US content?

- weight
- volume
- component count
- value

I think it is safe to assume that it is not the suppliers taking the "onerous contract provision" on the DL sales. So, lets say BBD can build the aircraft for $35m USD, sell to DL for $25m and lose $10m per frame. But, if 55% of the frame is US content (@ 35m, that is $19.25m), 19.25/25 = 77%. So by value, 77% of the sold item is US sourced.

Given the anti dumping law exists to prevent foreign companies taking money away from US companies, is the law actually being broken?

What is the yardstick for US content for it to not be considered for tariffs?


This article discusses a summary of this subject http://www.airinsight.com/us-manufacturing-impact/

It concludes that the U.S. is actually shooting itself in the foot with this ruling, as it affects more U.S. jobs in the CSeries supply chain than Canadian jobs

Basically, the big picture is that a U.S. airline is acquiring a product manufactured more than half in the U.S. at less than cost, the Canadians are paying for those U.S. jobs partially out of their pocket, and the U.S. administration is punishing Canada for it... Hahahaha.
There is no way that this story isn't going to end in flowers and wedding vows.
 
MSPNWA
Posts: 3641
Joined: Thu Apr 23, 2009 2:48 am

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

Mon Oct 02, 2017 7:37 pm

aerolimani wrote:
Utter rubbish. By this logic… why fly a route with a bunch of regionals at 75 seats, 4 times a day, when you could just fly one A380 once every four days? For that matter, why should Boeing and Airbus offer the 737 and A320 series in multiple sizes? Wouldn't it be cheaper to just offer one size, and make airlines plan around that?


If the economics are rubbish, I'm pretty sure you should have a better rebuttal available than taking things to an extreme, nonsensical level. You're not using the same logic. The fact that manufacturers offer differing sizes based on the same platform is not evidence against the fact that different-sized airplanes can and do compete against each other in the marketplace. Quite the contrary in fact. This is actually very evident in, say, the 737 line. Airlines may want the smaller size of a 73G for example, but the overall economics of the 738 or 739 are better overall and are ordered more often. Does AA's route structure need exactly 500 (in service + on order) airplanes in the 150-160 seat category and only 125 in the 125-seat range? Are their 4 times the routes that need exactly that 150-160 capacity? Undoubtedly not, but the overall economics are better for the larger aircraft, so it wins the competition with a smaller aircraft. Once again an example of the highly blurred lines for aircraft size ranges. Airlines are cost-driven business, and lower costs rules the day. This was not a choice between a CR9 and a 747. Saying Bombardier was the only option for DL is simply an excuse not based on reality.
 
Hamlet69
Posts: 2540
Joined: Thu Mar 09, 2000 2:45 am

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

Mon Oct 02, 2017 7:47 pm

LockheedBBD wrote:
Hamlet69 wrote:


Also an interesting tidbit that I found is that P&W Canada has received more direct government subsidies than BBD has. :scratchchin:




https://beta.theglobeandmail.com/report ... dmail.com&

"Pratt & Whitney Canada to repay $1-billion debt to Canada, Quebec early"

Hartford, Connecticut.-based United Technologies Corp. (UTC), Pratt's parent, disclosed in a regulatory filing Wednesday that Pratt & Whitney Canada (PWC) signed amendments to existing loans agreements with the governments on Dec. 30.

[...] PWC will also spend about $8-million a year over 14 years to support innovation and research and development through existing partnerships with postsecondary schools and key industry associations.


Good find, thank you! I did not look for PWC articles specifically. I just read several references to their receipt of government funds and incentives when reading BBD-specific articles.

c933103 wrote:
Bombaqrdier is a new market participant to the market and thus it would not be able to sell its aircrafts if they aren't selling them attractively.


And again, I am not against loss-leader sales per se. As long as the company that does so can afford it. I am against it when the company is struggling to survive, and "needs" a bailout just to pay its bills. When they get that bailout, and turn around and give half of it away for a fire-sale price on their brand-new product, that is the definition of a subsidy. And when it is done in a foreign country, that is the definition of dumping.

Think of it this way - imagine one of your best friends tells you he/she is struggling to make ends meet, and needs money just for groceries. So you give him/her $100 to get by. You run into them the following week and they tell you they were at the casino last night and lost $50. How are you gonna feel? Was that $100 money well invested because they had a chance of walking out of the casino with more? Or did you just subsidize their gambling habit?

And Bombardier is not Tupolev/Sukhoi (who never sold successfully outside Russia and the former Soviet bloc until the SSJ) or the companies who have never done this before. Just counting the CRJ and Dash 8, BBD have sold and delivered 3,000+ aircraft to operators all over the world.

jeffrey0032j wrote:
As for the comparison with Fokker 70/100, the Dutch eventually allowed Fokker to fail. Canada didn't do so for BBD, and did the opposite by stuffing money into BBD, and had done so quite blatantly. This is the whole point of the case against BBD/Canada. The trade officials are not going to focus on how nice the other planes are, they are primarily concerned about how the products were financed. If BBD did indeed receive subsidies that are contrary to trade regulations, then they should be prepared to face the consequences. If they didn't, they should bring their evidence to the Canadian government who should defend BBD. Simple as that. The tricky part here is, that the Canadian and Quebec governments may not be willing to provide such evidences (if there was any in the first place), as they are as much involved in this as BBD. Not forgetting that there is currently a WTO case against BBD by Brazil.

As I have said before, Airbus and Boeing have been found to be receiving illegal subsidies before by WTO. Why should the Canadian government or BBD think they are above this?


:checkmark: :checkmark:

northstardc4m wrote:
But see the question is had Boeing not undercut BBD at United so badly would the situation be the same? Odds are split there.


Seeing as how UA turned right around and cancelled the order everyone seems to be complaining about, I don't think it changes anything at all. But for S's & G's, let us say Boeing does not offer UA the deal they did, and BBD gets it. Then what? One can only assume that the same business review that took place after the 73G order will come to the same conclusion. So UA turns around and cancels their (hypothetical) C-Series order. And now we are back to where we started.

aerolimani wrote:
I've said it before. This action only protects the interest of one US company, at the expense of every US airline, every US supplier to BBD, and every American BBD employee.


You can certainly say it as many times as you like. It does not change U.S. law. Nor does it change simple math - that that "one US company" has more US suppliers and more American employees than BBD will ever have. So if we are just doing a 'math = jobs' calculation, BBD still loses.

Waterbomber wrote:
Basically, the big picture is that a U.S. airline is acquiring a product manufactured more than half in the U.S. at less than cost, the Canadians are paying for those U.S. jobs partially out of their pocket, and the U.S. administration is punishing Canada for it... Hahahaha.


:rotfl: Well, when you put it that way. . .

Regards,

Hamlet69
All gave some. Some gave all.
 
User avatar
northstardc4m
Posts: 3327
Joined: Fri Apr 28, 2000 11:23 am

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

Mon Oct 02, 2017 8:04 pm

Hamlet69 wrote:
northstardc4m wrote:
But see the question is had Boeing not undercut BBD at United so badly would the situation be the same? Odds are split there.


Seeing as how UA turned right around and cancelled the order everyone seems to be complaining about, I don't think it changes anything at all. But for S's & G's, let us say Boeing does not offer UA the deal they did, and BBD gets it. Then what? One can only assume that the same business review that took place after the 73G order will come to the same conclusion. So UA turns around and cancels their (hypothetical) C-Series order. And now we are back to where we started.


Hamlet69


They weren't canceled, they converted the order into larger 737s, 4-800s and 61-MAX9... and the point isn't what would of happened, the point is if Boeing did an undercut loss sale at United, it will hurt them at the WTO.
Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.
 
User avatar
aerolimani
Posts: 1298
Joined: Tue Jun 18, 2013 5:46 pm

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

Mon Oct 02, 2017 8:19 pm

MSPNWA wrote:
Saying Bombardier was the only option for DL is simply an excuse not based on reality.

I didn't say that. Wha I have previously done is to paraphrase Delta, who have stated that Boeing was not a competitor in this RFP. If you want to argue about the economics of plane sizes, and why Delta didn't consider Boeing (or Airbus, for that matter), then you can argue with Delta. The general consensus regarding the Delta order was that it was between the CSeries and Embraer.

Sure, there's mission overlap between the CSeries and the smaller available 737's. But, it's really not unreasonable for an airline to find enough differences to exclude one or another from an RFP.

Even then, what excuse does an airline need to justify excluding whoever they wish? In many cases, it seems like fleet commonality alone is enough to exclude manufacturers. Just ask every ULCC out there.
 
Hamlet69
Posts: 2540
Joined: Thu Mar 09, 2000 2:45 am

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

Mon Oct 02, 2017 9:07 pm

northstardc4m wrote:
Hamlet69 wrote:
northstardc4m wrote:
But see the question is had Boeing not undercut BBD at United so badly would the situation be the same? Odds are split there.


Seeing as how UA turned right around and cancelled the order everyone seems to be complaining about, I don't think it changes anything at all. But for S's & G's, let us say Boeing does not offer UA the deal they did, and BBD gets it. Then what? One can only assume that the same business review that took place after the 73G order will come to the same conclusion. So UA turns around and cancels their (hypothetical) C-Series order. And now we are back to where we started.


Hamlet69


They weren't canceled, they converted the order into larger 737s, 4-800s and 61-MAX9.


Indeed they were. So again, what would have happened if UA had ordered the C-Series? Just ignored their business review that said they needed larger aircraft? Or cancelled the C-Series order and gone with more 738's and MAX 9's? Plus, is it not universally agreed that the 737 does not compete with the C-Series? :scratchchin:


northstardc4m wrote:
the point is if Boeing did an undercut loss sale at United, it will hurt them at the WTO.


First off, be specific. Under which Article is BBD/Canada going to challenge Boeing/US at the WTO? In fact, let me help you out:

It cannot be the Anti-Dumping Agreement unless Canada can prove Boeing sold AC and/or WS MAX's for less than UA is paying, which I find highly doubtful. In fact, based on the WTO summation - "If a company exports a product at a price lower than the price it normally charges on its own home market, it is said to be “dumping” the product." - the fact that AC, as reported in this very thread, is paying significantly MORE than DL only strengthens the U.S. argument. So BBD/Canada is going to steer VERY clear of this one.

It cannot be the Safeguards Agreement, as it just flat out does not apply.

So therefore it can only be under the Subsidies and Countervailing Measures Agreement. This would be BBD/Canada's only chance. It is under this Agreement that Embraer/Brazil is suing BBD/Canada under. It is also this Agreement that almost the entire Boeing/Airbus dispute has fallen under.

And that would be BBD/Canada's MAJOR problem. Unless Canada can find something new (possible, but unlikely), any Prohibited and/or Actionable subsidy that Boeing would have used to undercut BBD at UA would be the same ones Airbus/EU have already challenged, and the WTO already ruled on. Which means that at this point in time, they have either been cleared or corrected. Either way, it is highly doubtful the WTO would take up the exact same issue again.*

* = again, with the caveat being that no new subsidy has come into play that the EU did not challenge.

In short, Canada would be taking a very big risk by taking Boeing/US to task at the WTO. And it would likely backfire quite badly.

Hamlet69
All gave some. Some gave all.
 
PPVRA
Posts: 8272
Joined: Fri Nov 12, 2004 7:48 am

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

Mon Oct 02, 2017 11:42 pm

The Boeing-UAL deal is quite different than the BBD-Delta deal. Boeing took the hit themselves, BBD used government money to dodge the financial hit. This is completely different.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
User avatar
Classa64
Posts: 311
Joined: Fri Apr 03, 2015 5:40 pm

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

Tue Oct 03, 2017 12:30 am

As I don't know the politics or how stuff like this works, just looking for simple explanation if there is one.

Is it simple to say the Boeing is crying to the government for help because they didn't get orders for a plane they never built? Meaning someone else beat them to it.... There are more than enough airlines to buy more than enough planes from everyone so why the Crying...
"Freedom is the miles i'm rolling on"
 
c933103
Posts: 3955
Joined: Wed May 18, 2016 7:23 pm

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

Tue Oct 03, 2017 12:41 am

Hamlet69 wrote:
c933103 wrote:
Bombaqrdier is a new market participant to the market and thus it would not be able to sell its aircrafts if they aren't selling them attractively.


And again, I am not against loss-leader sales per se. As long as the company that does so can afford it. I am against it when the company is struggling to survive, and "needs" a bailout just to pay its bills. When they get that bailout, and turn around and give half of it away for a fire-sale price on their brand-new product, that is the definition of a subsidy. And when it is done in a foreign country, that is the definition of dumping.

Think of it this way - imagine one of your best friends tells you he/she is struggling to make ends meet, and needs money just for groceries. So you give him/her $100 to get by. You run into them the following week and they tell you they were at the casino last night and lost $50. How are you gonna feel? Was that $100 money well invested because they had a chance of walking out of the casino with more? Or did you just subsidize their gambling habit?

And Bombardier is not Tupolev/Sukhoi (who never sold successfully outside Russia and the former Soviet bloc until the SSJ) or the companies who have never done this before. Just counting the CRJ and Dash 8, BBD have sold and delivered 3,000+ aircraft to operators all over the world.

- "as long as the company that does so can afford it" surely give large companies an unbalanced advantage as obviously they can afford more lost. There are all sort of startups around the world that are burning third party money in order to gain market shares in whatever markets they are competing in, and I don't think they have faced complains against them in this aspect.
- Gambling =\= investment, despite some risky investment could have even lower expected return than gambling. If the one who borrow those money think it is ok for the "friend" to do so, then why should e.g. the boss at casino worry about it?
- CRJ have been sold worldwide but that is an regional aircraft mainly used by regional operator not mainline carriers
The message in signature have been removed according to demand.
 
SteelChair
Posts: 1381
Joined: Fri Aug 25, 2017 11:37 am

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

Tue Oct 03, 2017 1:17 am

The snarkiness and smugness of some on this thread on the Boeing side is almost beyond belief. Are you all Supreme Court Justices? How can you be so sure that Bombardier broke the law? Whose law? What law? To what extent? Boeing never broke the law? Did their company and product survive their law-breaking?

The reality is that NAFTA is being renegotiated. The CSeries is a pawn in that negotiation. No one knows how it will turn out. As an observer, and not a laywer, I will go on recored and predict that the CSeries survives and the 220% does not.
 
washingtonflyer
Posts: 1598
Joined: Sun Sep 08, 2013 9:45 pm

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

Tue Oct 03, 2017 2:19 am

Gee, practically everyone readily admits that Bombardier got a massive cash and equity infusion to keep afloat and to be able to develop the C-series program. Thats the very definition of a subsidy - based on US law and WTO agreement.

And Bombardier itself admitted that it underpriced the Delta offer/bid in order to secure the deal. That's a pretty good indicator of dumping.

As to whether the CSeries survives, you've got a fair to middling chance that you're correct.
 
GalaxyFlyer
Posts: 4652
Joined: Fri Jan 01, 2016 4:44 am

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

Tue Oct 03, 2017 3:53 am

Frankly, "dumping" shouldn't matter--if Canadian taxpayers are willing to subsidize Delta and its passengers, good for the passengers. Likewise, if South Carolina wants to give Boeing tax breaks that cause other South Carolinians to pay more in taxes, so what? It's stupid economics and stupid business, but it's their respective citizens being hurt.

GF
 
User avatar
northstardc4m
Posts: 3327
Joined: Fri Apr 28, 2000 11:23 am

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

Tue Oct 03, 2017 12:40 pm

Hamlet69 wrote:
First off, be specific. Under which Article is BBD/Canada going to challenge Boeing/US at the WTO? In fact, let me help you out


I never said bring it as a challenge.

I said if the Boeing/BBD dumping case goes to the WTO it would be examined in an evidentiary way. I said nothing of a challenge or calling for a determination on it. If the case goes to the WTO all previous deal where the 737 and CSeries were in contention are open to be looked at counter-evidence of damage... If BBD needs to call Boeings claims of damages due to undercutting into play, the United deal is ample proof that Boeing has used the same tactics and will likely result in a not proven in that argument.

That's it

That's all I'm saying

AND the re-iterate, this is not going to be a pure legal challenge, nor is it likely that there will ever be a full determination on the BBD/Delta deal from anywhere... this is all going to be settled through politics and negotiations far bigger than this case alone that will in all likelihood alter the laws and agreements involved.

But fine to make everyone understand where im coming from:

BBD underpriced the deal to Delta... THAT is not illegal in its own right, for Boeing and Airbus and everyone else have done so for... ever basically.

Yes BBD has financial questions around it.

Yes BBD has been badly run by the Beaudoin family for decades and I hate them. Quite frankly i hope they sell the C-series or all of BBD Aero and the new owners can restructure the debt to end this idiocy.

The determination on subsidies for BBD is unlikely to be as clear cut as people here are saying, there are shares and payments and a whole structure of financing involved that both the Quebec and BBD sides say followed WTO rulings and IS compliant. That piece will be argued and examined by people with more information that we ever will if it is ever brought before any tribunal. I doubt it is fully compliant, but i also doubt it is in the majority not compliant... we will have to see.

All information released to date is partial and redacted.

Pretty much every independant and unbiased review of the current tariff has questioned it's amount and how it was determined.

I don't disagree, and in fact expected, that a tariff is probably justified, however 219% is ridiculous, spiteful and smacks of politics and NAFTA negotiation fuel and not a true determination of damages.
Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.
 
PPVRA
Posts: 8272
Joined: Fri Nov 12, 2004 7:48 am

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

Tue Oct 03, 2017 12:46 pm

GalaxyFlyer wrote:
Frankly, "dumping" shouldn't matter--if Canadian taxpayers are willing to subsidize Delta and its passengers, good for the passengers.


THAT kind of dumping does matter, because winning a competitive bid for your aircraft effectively through externalizing the costs associated with the extreme deal required to win is beyond unfair competition--it's handicapping BBD, and it's piss poor economics.

This is also a level of political meddling in the industry, which is going to INCREASE uncertainties, and thus DECREASE future investment and development.

If you like this industry and want to see it prosper, you should be outraged at BBD, not Boeing.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
User avatar
northstardc4m
Posts: 3327
Joined: Fri Apr 28, 2000 11:23 am

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

Tue Oct 03, 2017 1:03 pm

PPVRA wrote:

If you like this industry and want to see it prosper, you should be outraged at BBD


yes


PPVRA wrote:
, not Boeing.


nope, be outraged at them too... they have used dirty tricks far too many times over the years to prevent open competition to be approaching respectability in this.
Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.
 
washingtonflyer
Posts: 1598
Joined: Sun Sep 08, 2013 9:45 pm

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

Tue Oct 03, 2017 1:33 pm

Just a little perspective here: if Boeing had to take a loss on a sale (or take less revenue) in order to win the business against Bombardier, you've demonstrated that the two entities are competing for the same business and that Boeing had to lose money in the face of a product that was illegally subsidized. That is the very definition of injury. In any number of industries, the USITC has seen examples where domestic industry has had to fight off imports (in various commodity segments, its known as "foreign fighter" discounting) and has had to take a loss in order to maintain customer business.

But for the presence of subsidized imports, Boeing would not have had to take that lost revenue sale.
 
User avatar
northstardc4m
Posts: 3327
Joined: Fri Apr 28, 2000 11:23 am

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

Tue Oct 03, 2017 1:44 pm

washingtonflyer wrote:
Just a little perspective here: if Boeing had to take a loss on a sale (or take less revenue) in order to win the business against Bombardier, you've demonstrated that the two entities are competing for the same business and that Boeing had to lose money in the face of a product that was illegally subsidized. That is the very definition of injury. In any number of industries, the USITC has seen examples where domestic industry has had to fight off imports (in various commodity segments, its known as "foreign fighter" discounting) and has had to take a loss in order to maintain customer business.

But for the presence of subsidized imports, Boeing would not have had to take that lost revenue sale.


Well if you accept the assumptions that:

Bombardier was at the time taking a loss as well

That there are in fact subsidies that are illegal (not proven)
Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.
 
PPVRA
Posts: 8272
Joined: Fri Nov 12, 2004 7:48 am

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

Tue Oct 03, 2017 2:56 pm

northstardc4m wrote:
Well if you accept the assumptions that:

Bombardier was at the time taking a loss as well


During the UAL deal? Please post a link to the source. I'm pretty sure that deal was when BBD still thought they didn't have to offer any discounts, because their plane was just that good.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
User avatar
northstardc4m
Posts: 3327
Joined: Fri Apr 28, 2000 11:23 am

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

Tue Oct 03, 2017 3:18 pm

PPVRA wrote:
northstardc4m wrote:
Well if you accept the assumptions that:

Bombardier was at the time taking a loss as well


During the UAL deal? Please post a link to the source. I'm pretty sure that deal was when BBD still thought they didn't have to offer any discounts, because their plane was just that good.


Please re-read what i posted... Washingtonflyer's post assumes that for Boeing to have a case Bombardier must of been selling at a loss AND the subsidies are illegal. Bombardier is only at a loss if the subsidies are in fact illegal. And if the subsidies are in fact found to be legal (very complicated and won't be determined soon), then Boeing is wrong on any damages in most of their claim and probably not able to get the rest to stand on it's own. If they aren't legal, even in part in some part (again complicated far beyond what we have full disclosure of) then there is argument for a tariff no question.

Hypothetically if Boeing was selling for more and Bombardier was selling for less and Boeing couldn't compete on price sorry but that's the definition of free trade , Boeing either has to find a way of lowering it's costs or as they say "die trying"... it's all legal at that point.

Now... that's in a vacuum with no other factors. Add in subsidies, tax breaks, aid, financial tactics, etc etc and that whole argument becomes what we have in front of us. It isn't illegal to sell a product for less than the competition in and of itself.
Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.
 
washingtonflyer
Posts: 1598
Joined: Sun Sep 08, 2013 9:45 pm

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

Tue Oct 03, 2017 3:28 pm

northstardc4m wrote:
washingtonflyer wrote:
Just a little perspective here: if Boeing had to take a loss on a sale (or take less revenue) in order to win the business against Bombardier, you've demonstrated that the two entities are competing for the same business and that Boeing had to lose money in the face of a product that was illegally subsidized. That is the very definition of injury. In any number of industries, the USITC has seen examples where domestic industry has had to fight off imports (in various commodity segments, its known as "foreign fighter" discounting) and has had to take a loss in order to maintain customer business.

But for the presence of subsidized imports, Boeing would not have had to take that lost revenue sale.


Well if you accept the assumptions that:

Bombardier was at the time taking a loss as well

That there are in fact subsidies that are illegal (not proven)


Commerce has already said in its initial determination that the equity infusion into BBD was a subsidy because BBD was not creditworthy and was not equityworthy. BBD lost 1.26 billion in 2014 and over 5.3 million in 2015. The infusion took place in 2015 in "a deal with the Quebec government to invest in the struggling CSeries jet program." Almost everyone here agrees that this infusion represents a direct injection of capital into a company.

Articles elsewhere show BBD absolutely took a loss on the sale. "Bombardier’s task is not made easier by an outbreak of transparency in the secretive jet market after it was forced by Canadian accounting rules to take a $500 million charge for the Delta deal and two others covering a total of 127 planes."
 
User avatar
northstardc4m
Posts: 3327
Joined: Fri Apr 28, 2000 11:23 am

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

Tue Oct 03, 2017 3:38 pm

washingtonflyer wrote:
northstardc4m wrote:
washingtonflyer wrote:
Just a little perspective here: if Boeing had to take a loss on a sale (or take less revenue) in order to win the business against Bombardier, you've demonstrated that the two entities are competing for the same business and that Boeing had to lose money in the face of a product that was illegally subsidized. That is the very definition of injury. In any number of industries, the USITC has seen examples where domestic industry has had to fight off imports (in various commodity segments, its known as "foreign fighter" discounting) and has had to take a loss in order to maintain customer business.

But for the presence of subsidized imports, Boeing would not have had to take that lost revenue sale.


Well if you accept the assumptions that:

Bombardier was at the time taking a loss as well

That there are in fact subsidies that are illegal (not proven)


Commerce has already said in its initial determination that the equity infusion into BBD was a subsidy because BBD was not creditworthy and was not equityworthy. BBD lost 1.26 billion in 2014 and over 5.3 million in 2015. The infusion took place in 2015 in "a deal with the Quebec government to invest in the struggling CSeries jet program." Almost everyone here agrees that this infusion represents a direct injection of capital into a company.

Articles elsewhere show BBD absolutely took a loss on the sale. "Bombardier’s task is not made easier by an outbreak of transparency in the secretive jet market after it was forced by Canadian accounting rules to take a $500 million charge for the Delta deal and two others covering a total of 127 planes."


I guess it's now banned to post hypothetical statements?

I haven't disputed that there is questionable financial support. SOME of it certainly is. SOME Tariff is going to be justified. SOME tariff as it currently stands will be struck down one way or another.

Only the WTO or NAFTA tribunal can issue a determination on if the subsidies named in the complaint are in fact legal. USDOC can impose tariffs until that determination but will be held to arbitration should any part be found to be legal by one of those tribunals under the current agreements the US and Canada signed. If the entire package is found to be in fact legal then the tariff will get eliminated or countered tariffed legally.

Should NAFTA be renegotiated in good faith (so far to be seen) then this will be on that debate no doubt. Should NAFTA fali or should Bombardier prefer to go to the WTO, then I'm sure there will be a negotiated deal before it gets to the WTO determination, because it is extremely unlikely that there is 0 legal subsidy in the package done for Bombardier in international law, not impossible but I really doubt even the majority of the package isn't going to pass judgement.
Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.
 
WaywardMemphian
Posts: 1418
Joined: Sat Dec 13, 2014 9:05 pm

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

Tue Oct 03, 2017 3:44 pm

Delta bought it's own refinery, what if they bought their own plane company? I'm only 3/4ths joking. Buy a 51 percent stake in the aviation side of Bombardier. If the plane is all it's supposed to be and the CS 500 has so much promise as well. Why not own it for yourself and sell it to others outside of the US legacy carriers? Kinda reminds me of Penske buying an engine manufacturer and then telling the truckmaker you need to put that engine in the trucks we buy from you.
 
Amiga500
Posts: 2627
Joined: Tue Mar 03, 2015 8:22 am

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

Tue Oct 03, 2017 3:49 pm

washingtonflyer wrote:
Articles elsewhere show BBD absolutely took a loss on the sale. "Bombardier’s task is not made easier by an outbreak of transparency in the secretive jet market after it was forced by Canadian accounting rules to take a $500 million charge for the Delta deal and two others covering a total of 127 planes."


So because Boeing didn't have to take charges for the 787 under US accounting rules, does that mean its all OK?

I thought that lot in Chicago want a level playing field?
 
washingtonflyer
Posts: 1598
Joined: Sun Sep 08, 2013 9:45 pm

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

Tue Oct 03, 2017 4:01 pm

Ever hear the saying "two wrongs don't make a right"? (assuming that there are two wrongs)....
 
Amiga500
Posts: 2627
Joined: Tue Mar 03, 2015 8:22 am

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

Tue Oct 03, 2017 4:04 pm

washingtonflyer wrote:
Ever hear the saying "two wrongs don't make a right"? (assuming that there are two wrongs)....


Well, I'd like to hope the opposing lawyer rams it down Boeing's throat next day out in court and draws the clown's/judges' attention to it so the penny might finally drop and they realise how the industry operates.
 
User avatar
northstardc4m
Posts: 3327
Joined: Fri Apr 28, 2000 11:23 am

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

Tue Oct 03, 2017 4:09 pm

WaywardMemphian wrote:
Delta bought it's own refinery, what if they bought their own plane company? I'm only 3/4ths joking. Buy a 51 percent stake in the aviation side of Bombardier. If the plane is all it's supposed to be and the CS 500 has so much promise as well. Why not own it for yourself and sell it to others outside of the US legacy carriers? Kinda reminds me of Penske buying an engine manufacturer and then telling the truckmaker you need to put that engine in the trucks we buy from you.


Actually illegal for an airline and an aircraft manufacturer to be owned by the same people in the US under anti-trust, also apples to engine manufacturers. Stems from the fallout of the 1934 air mail monopoly anti-trust suit.
Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.
 
PPVRA
Posts: 8272
Joined: Fri Nov 12, 2004 7:48 am

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

Tue Oct 03, 2017 4:28 pm

Amiga500 wrote:
washingtonflyer wrote:
Articles elsewhere show BBD absolutely took a loss on the sale. "Bombardier’s task is not made easier by an outbreak of transparency in the secretive jet market after it was forced by Canadian accounting rules to take a $500 million charge for the Delta deal and two others covering a total of 127 planes."


So because Boeing didn't have to take charges for the 787 under US accounting rules, does that mean its all OK?

I thought that lot in Chicago want a level playing field?


And Boeing isn't taking a charge, it's taking several. . . their charges are taken spread out over time, rather than at once. Regardless, this doesn't matter to the case at hand.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
User avatar
northstardc4m
Posts: 3327
Joined: Fri Apr 28, 2000 11:23 am

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

Tue Oct 03, 2017 4:44 pm

Amiga500 wrote:
washingtonflyer wrote:
Articles elsewhere show BBD absolutely took a loss on the sale. "Bombardier’s task is not made easier by an outbreak of transparency in the secretive jet market after it was forced by Canadian accounting rules to take a $500 million charge for the Delta deal and two others covering a total of 127 planes."


So because Boeing didn't have to take charges for the 787 under US accounting rules, does that mean its all OK?

I thought that lot in Chicago want a level playing field?


The 787 deals are out of scope for anything regarding the C-series.

Now that said the tax breaks they receive will probably get looked at again should this end up at WTO or NAFTA tribunal. Some of those, like the recent Washington State tax break, didn't exist for the Airbus vs Boeing dispute at the WTO and some of the rulings against the EU were on the same issue...

I really don't understand why Boeing is pushing this, it's opening cans of worms if it gets out of the US courts and into international tribunals. Even if they "win" it's going to ignite a whole new round of accusations and so on.
Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.
 
Shenzhen
Posts: 1666
Joined: Wed Jun 25, 2003 12:11 pm

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

Tue Oct 03, 2017 4:59 pm

Wow, what does this mean for Airbus once the WTO suit is complete (soon).

Certainly, the UAL order for discounted 737 airplanes is more evidence of the damage that foreign manufactures can do to a domestic industry when sales are directly subsidized by foreign taxpayers.

If the Chinese can get FAA certification on their commercial airplanes, they will likely face the same issue if they dump in the US.

Cheers
 
User avatar
northstardc4m
Posts: 3327
Joined: Fri Apr 28, 2000 11:23 am

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

Tue Oct 03, 2017 5:02 pm

Shenzhen wrote:
Wow, what does this mean for Airbus once the WTO suit is complete (soon).

Certainly, the UAL order for discounted 737 airplanes is more evidence of the damage that foreign manufactures can do to a domestic industry when sales are directly subsidized by foreign taxpayers.

If the Chinese can get FAA certification on their commercial airplanes, they will likely face the same issue if they dump in the US.

Cheers


Airbus/Boeing would go back to arbitration since it's still open... then Airbus would have to file a new dispute over the new findings and start all over seperately. The UA sale is not a justifiable dispute, but could be used as evidence in a larger dispute.

And i thought COMAC said they were definitely pursuing FAA certification on the 9x9 series?
Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.
 
TerminalD
Posts: 363
Joined: Wed Apr 26, 2017 7:32 pm

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

Tue Oct 03, 2017 5:08 pm

This was probably said elsewhere, but if this bites DL they can really only blame themselves. They've been complaining about foreign subsidies for years and now it is proven they are a large recipient of them. To my knowledge, none of the "illegal subsidies" Delta has alleged against others have been given the level of legal credibility that the subsidy on their C-Series order has gotten.
 
Shenzhen
Posts: 1666
Joined: Wed Jun 25, 2003 12:11 pm

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

Tue Oct 03, 2017 5:11 pm

The Boeing / Airbus suit is way past arbitration, and I think nearly all the possible EU/Airbus appeals have been filed (although something might be negotiated if duties are applied per the WTO).

The UAL 737-700 order is evidence of a distorted market due to C Series Sales subsidies.

Pursuing FAA Certification is a lot different then obtaining.

Cheers

quote
Airbus/Boeing would go back to arbitration since it's still open... then Airbus would have to file a new dispute over the new findings and start all over seperately. The UA sale is not a justifiable dispute, but could be used as evidence in a larger dispute.
And i thought COMAC said they were definitely pursuing FAA certification on the 9x9 series?
unquote
 
User avatar
northstardc4m
Posts: 3327
Joined: Fri Apr 28, 2000 11:23 am

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

Tue Oct 03, 2017 5:18 pm

Shenzhen wrote:

The UAL 737-700 order is evidence of a distorted market



Fixed that for you... the market is far more distorted than this one issue and was far before the CSeries came along.

Boeing bringing this suit is quite amusing actually considering their recent "ethics".

The aircraft manufacturing sales market as whole is corrupt.
Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.
 
User avatar
aerolimani
Posts: 1298
Joined: Tue Jun 18, 2013 5:46 pm

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

Tue Oct 03, 2017 6:03 pm

I think anyone looking at the situation sees that Boeing's aim is to crush Bombardier and that the prices they offered to UA were only offered with that intention. Boeing has said as much. If Boeing were just just trying to win orders, they wouldn't lowball like in the UA deal. Ever heard the saying nip it in the bud? Well… Boeing is the nipper and BBD is the bud.

Boeing couldn't sell its planes as cheap as they do if it wasn't for all their tax breaks and other incentives. So, this dumping legislation is just protecting the USA's corporate leeches from the foreign ones. If you want to pay more for your flights, then go ahead and encourage this protectionism. Go ahead and make Boeing the only real choice for US airlines. I'm sure they'll only give the best possible deals to the US airlines. :roll:

The aviation industry is subsidized globally. Welcome to 21st century global business.
 
PPVRA
Posts: 8272
Joined: Fri Nov 12, 2004 7:48 am

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

Tue Oct 03, 2017 6:22 pm

aerolimani wrote:
The aviation industry is subsidized globally. Welcome to 21st century global business.


Over the last 100 years, industry has grown to be less subsidized, not more. If you truly cared about free trade you'd be arguing against subsidies, for subsidies are not compatible with free trade. Subsidy wars create all kinds of problems and most especially, discontent, disagreements among trade partners and ultimately the taxpayer of all countries involved pay the cost. Worse yet, it can lead to boondoggle projects that end up distracting industry and diverting resources away from real, worthwhile and sustainable projects.
"If goods do not cross borders, soldiers will" - Frederic Bastiat
 
User avatar
N717TW
Posts: 545
Joined: Sun Feb 14, 2016 9:24 pm

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

Tue Oct 03, 2017 6:25 pm

aerolimani wrote:
MSPNWA wrote:
Saying Bombardier was the only option for DL is simply an excuse not based on reality.

I didn't say that. Wha I have previously done is to paraphrase Delta, who have stated that Boeing was not a competitor in this RFP. If you want to argue about the economics of plane sizes, and why Delta didn't consider Boeing (or Airbus, for that matter), then you can argue with Delta. The general consensus regarding the Delta order was that it was between the CSeries and Embraer.

Sure, there's mission overlap between the CSeries and the smaller available 737's. But, it's really not unreasonable for an airline to find enough differences to exclude one or another from an RFP.

Even then, what excuse does an airline need to justify excluding whoever they wish? In many cases, it seems like fleet commonality alone is enough to exclude manufacturers. Just ask every ULCC out there.


I feel that this is correct. At some level all aircraft on the market today compete for the sub-1,500 mile route segment since nearly all aircraft can viability operate on those routes. Heck, one could argue that DL should reopen the 764 line and run widebodies on ATL-NYC/BOS/FLA again. But in a world where Delta is going to run 8 to 12 frequencies per day from ATL to nearly all markets east of the rockies, you need a mix of jet sizes.

The true analysis is the real-world business market for such flights and the aircraft that operate them. Delta has purchased the CSeries to operate high-frequency medium sized markets and thin medium-length routes. That means flights that will have a need for up to 125 passengers on peak times (i.e. Monday morning; Thurs. afternoon) but are likely to be sub-100 otherwise. Frankly the 737 and A320 family is not competitive in the 75 to 125 passenger segment, which is what this plane and Delta's order is about. Delta in fact has moved around the 319 several times to make the plane financially workable (the 73G has a special mission in the DL fleet related to short/high/hot runway performance and therefore doesn't really serve this purpose). Sure the larger Boeing planes can operate shorter/thinner routes and sure the CASM might be less on paper, but the costs aren't less in reality. If a flight is likely to fetch less than 100 paying passengers outside of a peak M/Th/F route then the 73G is too much plane. So the straight full-aircraft CASM analysis isn't right b/c you're carrying unsold inventory but still have to pay for it. That leads back to some accuracy in DL's statement: the 737 wasn't competitive in the bid. It was for all intents and purposes a bid between the CS100 and the E2. Boeing is carrying a lot of water for EMB in this case.

This case might not be 100% about blocking a CS500 and CS700 but its probably pretty close to 99%.
 
CS500
Posts: 39
Joined: Mon Sep 25, 2017 4:31 pm

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

Tue Oct 03, 2017 6:32 pm

washingtonflyer wrote:
Articles elsewhere show BBD absolutely took a loss on the sale. "Bombardier’s task is not made easier by an outbreak of transparency in the secretive jet market after it was forced by Canadian accounting rules to take a $500 million charge for the Delta deal and two others covering a total of 127 planes."


Bombardier took a loss on the sale, but that is to the current production costs, not any sort of planned production costs or life-averaged production costs. If BBD was using program accounting ala Boing, it would not have taken any charges like that (despite the cash flow being the same in both cases).
 
MSPNWA
Posts: 3641
Joined: Thu Apr 23, 2009 2:48 am

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

Tue Oct 03, 2017 6:33 pm

aerolimani wrote:
I didn't say that. Wha I have previously done is to paraphrase Delta, who have stated that Boeing was not a competitor in this RFP. If you want to argue about the economics of plane sizes, and why Delta didn't consider Boeing (or Airbus, for that matter), then you can argue with Delta. The general consensus regarding the Delta order was that it was between the CSeries and Embraer.

Sure, there's mission overlap between the CSeries and the smaller available 737's. But, it's really not unreasonable for an airline to find enough differences to exclude one or another from an RFP.


I didn't say you directly said that. But you are agreeing with the argument.

DL's argument is invalid. Competition isn't voluntary. Voluntarily excluding a certain model from consideration is a company's choice, but that doesn't mean you are excluding that choice from the competition and they are not harmed by your decision. The market effects stretch far and wide. And in order for Boeing to truly be excluded, all interested parties would have to know. Do we really think a company would be so dumb as to tell a supplier that they're excluding certain competition and giving them pricing power? And would the supplier be so dumb to believe it as the whole truth? And you definitely can't publicly say you're interested in aircraft up to 130 seats and then say that Boeing isn't a competitor for it, unless you want to be hypocritical. So I go back to the bottom line of the final result. If there truly was no competition, why as a monopoly supplier is Bombardier having to price its airplanes at well below marginal cost before it sells? It makes no economic sense. The only way it makes sense is if there were significant competition for that order from multiple parties.

aerolimani wrote:
Even then, what excuse does an airline need to justify excluding whoever they wish? In many cases, it seems like fleet commonality alone is enough to exclude manufacturers. Just ask every ULCC out there.


A reasonable excuse would be a good start. Otherwise the company comes across as one big hypocrite, as DL is on multiple levels in this debate.
 
User avatar
northstardc4m
Posts: 3327
Joined: Fri Apr 28, 2000 11:23 am

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

Tue Oct 03, 2017 6:41 pm

PPVRA wrote:
aerolimani wrote:
The aviation industry is subsidized globally. Welcome to 21st century global business.


Over the last 100 years, industry has grown to be less subsidized, not more. If you truly cared about free trade you'd be arguing against subsidies, for subsidies are not compatible with free trade. Subsidy wars create all kinds of problems and most especially, discontent, disagreements among trade partners and ultimately the taxpayer of all countries involved pay the cost. Worse yet, it can lead to boondoggle projects that end up distracting industry and diverting resources away from real, worthwhile and sustainable projects.


He was stating a fact.

If you want to argue about it then you are barking up a tree that is very deeply rooted. Industry as a whole may of decreased in subsidy, but Aerospace is too tied to national interests to fit that.

No manufacturer in the business today is clean... none. And the rules are not written to make them so... the rules are written to keep the subsidies of various kinds in check to try and keep it somewhat fair competitively however again national interests will always try to nudge and poke to keep their domestic player in a superior position.
Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.
 
User avatar
northstardc4m
Posts: 3327
Joined: Fri Apr 28, 2000 11:23 am

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

Tue Oct 03, 2017 6:47 pm

MSPNWA wrote:

A reasonable excuse would be a good start. Otherwise the company comes across as one big hypocrite, as DL is on multiple levels in this debate.


And which party ISN'T Hypocritical in this debate?
Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.
 
MSPNWA
Posts: 3641
Joined: Thu Apr 23, 2009 2:48 am

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

Tue Oct 03, 2017 7:01 pm

northstardc4m wrote:
And which party ISN'T Hypocritical in this debate?


Uh, Boeing since they've played by the rules? Or do laws not matter anymore...
 
User avatar
northstardc4m
Posts: 3327
Joined: Fri Apr 28, 2000 11:23 am

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

Tue Oct 03, 2017 7:04 pm

MSPNWA wrote:
northstardc4m wrote:
And which party ISN'T Hypocritical in this debate?


Uh, Boeing since they've played by the rules? Or do laws not matter anymore...


Did you seriously just say Boeing plays by the rules?

http://blog.seattlepi.com/aerospace/200 ... t-go-away/

https://www.c-span.org/video/?193687-1/ ... department

https://www.corp-research.org/boeing

Yea... by the rules... that's a good one...
Those who would give up Essential Liberty to purchase a little Temporary Safety, deserve neither Liberty nor Safety.

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