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rotating14
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 2:13 am

I apologize if this was discussed earlier. Boeing wanted to keep Bombardier from gaining a foothold in the US market with its C series jet. This jet does not compete with jets that Boeing really promotes unless you consider the 737-700 0r the MAX 7 worth the time of competing. I say this because people think that this tie up will cause Airbus to create this huge shift in the aircraft landscape. If Airbus were to modify the C-Series into something that would apply greater pressure on the MAX 8, (the 9 is just about dead) and the MAX 10, it would eventually encroach into where the A320/1 now occupy. Am I wrong in this assessment?
 
ThePointblank
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 2:17 am

rotating14 wrote:
I apologize if this was discussed earlier. Boeing wanted to keep Bombardier from gaining a foothold in the US market with its C series jet. This jet does not compete with jets that Boeing really promotes unless you consider the 737-700 0r the MAX 7 worth the time of competing. I say this because people think that this tie up will cause Airbus to create this huge shift in the aircraft landscape. If Airbus were to modify the C-Series into something that would apply greater pressure on the MAX 8, (the 9 is just about dead) and the MAX 10, it would eventually encroach into where the A320/1 now occupy. Am I wrong in this assessment?

Correct. What it means is that Airbus is now free to stretch and rewing the A320 series to allow it to fill the MoM mission.

Boeing's got a bigger problem as a result of this deal, as they need to design and build their MoM aircraft from scratch, AND replace the 737 MAX at the same time. So what does Boeing want to do with finite resources? Build the MoM, or replace the 737 MAX?
 
ytz
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 2:35 am

ThePointblank wrote:

So what does Boeing want to do with finite resources?


To date, the answer has been share buybacks.

If they don't do both programs, Airbus will nibble at both ends.
 
PlanesNTrains
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Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Fri Oct 20, 2017 3:43 am

bmacleod wrote:
PlanesNTrains wrote:
highflier92660 wrote:
For Boeing, if there is good to come out of this ass-whupping by Airbus it may serve as a final awakening to produce a competitive aircraft. Thanks in-part to Jim "no more moonshots" McNerney Boeing has become a risk adverse airframe manufacturer that would rather hide behind government lobbyists and attorneys than turn to their incredibly talented aeronautical engineering staff. Even if your name is Boeing, you can only go so long selling an airliner equivalent to the ancient Wagon Queen Family Truckster.


A300/A310 ---> 757/767
737/727 ---> A320
A330/A340 ---> 777
A380 ---> 787
A350 ---> 797 (?)


Curious as to how you can compare the A380 to a 787. Did you mean 747-8i?


I believe you cut off the part where I said I wasn't drawing a correlation between the models, just listing them. :-)
-Dave


MAX’d out on MAX threads. If you are starting a thread, and it’s about the MAX - stop. There’s already a thread that covers it.
 
PlanesNTrains
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Re: Airbus and Bombardier Announce C Series Partnership

Fri Oct 20, 2017 4:12 am

JoeCanuck wrote:
washingtonflyer wrote:
ThePointblank wrote:
In terms of trade, the item has to be substantially transformed in terms of its essence. I will point to the NAFTA Rules of Origin:
https://www.nafta-sec-alena.org/Home/Te ... 6a08a#A401

Article 401: Originating Goods

Except as otherwise provided in this Chapter, a good shall originate in the territory of a Party where:


Careful, you're discussing NAFTA rules for NAFTA preference. You can always NOT claim NAFTA preference for goods - you just have to pay the duties - which are often times zero percent based on the agreement on civil aircraft.

ThePointblank wrote:
More on determining the rules of origin, and examples:
https://www.usitc.gov/elearning/hts/med ... rigina.pdf

Another point to look at is the General Rules of Interpretation for the Harmonized System; these rules dictate how something is to be classified. A brief explanation can be found here:
http://www.wcoomd.org/en/topics/nomencl ... 413CB.ashx
http://www.globaltariff.com/RulesofInterpretation.cfm


Careful when assessing rules of origin and country of origin. Most countries follow a "tariff shift" protocol whereas the USA follows a "substantial transformation" protocol. They're not the same thing. The General Rules of interpretation are excellent guidelines, but they are designed to address classification of a good as opposed to country of origin.


Your long list of grievances in an earlier post have one thing in common with each other, and a glaring difference with the Boeing action against BBD; They were protecting competing domestic industries against unfair competition from foreign products. In the Boeing/BBD case, there was no direct, or even indirect competition in the Delta deal. Boeing did not have a product, did not offer a product, so they lost nothing in the competition...one to which they weren't even invited.

You have yet to show how Boeing was harmed in any way. Not once. Since harm to domestic industry is the cornerstone to anti dumping legislation, it's kind of an important benchmark. Otherwise, it's just a foreign company willing to take a loss which actually benefits domestic consumers. In reality, foreign companies can literally give their products away in a domestic market, as long as no domestic industry is harmed by the actions.

The US Court of International Trade's mission is to determine harm. If THEY can't find any harm to Boeing, then the whole deal, tariffs and all, go away...which would also lay bare just how ridiculous the commerce department hearings's were.

Boeing brought the action to Commerce. Boeing claimed harm. You're the expert, so perhaps, once and for all, you would care to enlighten us, without obfuscating in the usual lawyerish way, EXACTLY how Boeing was harmed by the specific sale of the CS100 to Delta.

Good luck with that.


I'm quite certain DL has the option to convert CS100s to CS300s. Are you saying that the CS300 does not in any way compete with the 737-700? UA was kicking the tires on the CS100 then went for the 73G. To me, that shows a correlation between the products, and frankly quite directly.

https://leehamnews.com/2016/01/21/unite ... ombardier/

"The price of the airplane. The 737-700 is now a cheap airplane for Boeing to produce and the CSeries is not. Even though we estimate that BBD’s write-off of $3.2bn in development costs enables BBD to lower the price of the CSeries by about $5m, to the upper $20m, Boeing has a fully amortized 737-700 and can still undercut the price. We’ve already heard that the price may have been in the low $20m, which we think may be aggressive, but whether it’s mid-$20m or lower, we believe Boeing would have had no problem undercutting BBD."
-Dave


MAX’d out on MAX threads. If you are starting a thread, and it’s about the MAX - stop. There’s already a thread that covers it.
 
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LockheedBBD
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 4:14 am

ThePointblank wrote:


Boeing's got a bigger problem as a result of this deal, as they need to design and build their MoM aircraft from scratch, AND replace the 737 MAX at the same time. So what does Boeing want to do with finite resources? Build the MoM, or replace the 737 MAX?


JV with Embraer for an NSA
 
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FoxtrotSierra
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 4:22 am

This is wickedly accurate as to what is probably going on in Boeing HQ right now, its almost scary! Whoever created this probably foresaw this scenario. https://www.youtube.com/watch?v=ul7KVapsJO4
 
ytz
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 4:38 am

LockheedBBD wrote:
ThePointblank wrote:


Boeing's got a bigger problem as a result of this deal, as they need to design and build their MoM aircraft from scratch, AND replace the 737 MAX at the same time. So what does Boeing want to do with finite resources? Build the MoM, or replace the 737 MAX?


JV with Embraer for an NSA


I fail to see what Embraer has to offer Boeing. The E2 can't be extended to cover the 150-170 market. And even if it could, the 4 abreast config is just not optimal above ~120 seats. They don't have a substantial technological advantage/expertise to offer Boeing. So what exactly does Embraer have to offer Boeing beyond simply capital and risk sharing? There's really nothing that Embraer brings that Boeing could not do on its own.

The Airbus-Bombardier deal is simply unique. The product lines fit perfectly. Bombardier brings great composite wing tech and a better cockpit to the table that Airbus can and will exploit in due course. And Bombardier has blown billions developing an airplane that still has substantial potential untapped (with the hypothetical CS500) which could be exploited for cheap. There's no other analogous situation. Boeing has to go it alone on this one. They really should have snapped up Bomber before Airbus got to them....
 
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LockheedBBD
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 4:38 am

Words of wisdom by one Leeham News commenter(Alex): https://leehamnews.com/2017/10/18/airbu ... /#comments

The bottomline is quite simple – neither Airbus, nor Boeing wanted to have a new competitor in the market. Each chose their own way to achieve this. Boeing –
to fight (calling mommy for help), Airbus – to go fishing with a win-win bait. Bombardier ate the bait, Airbus will eat Bombardier. End of the story.
 
Siddar
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 5:05 am

On the one hand Canadians are saying cseries doesn't compete with Boeing and other hand they're saying how this deal with Airbus means real trouble for Boeing. Could you guy decide what point your arguing. Ether the cseries wasn't competing with Boeing and there is no impact to Boeing by this descion or cseries was competing with Boeing all along.
 
PlanesNTrains
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 5:34 am

Siddar wrote:
On the one hand Canadians are saying cseries doesn't compete with Boeing and other hand they're saying how this deal with Airbus means real trouble for Boeing. Could you guy decide what point your arguing. Ether the cseries wasn't competing with Boeing and there is no impact to Boeing by this descion or cseries was competing with Boeing all along.


For many, they're not arguing a point, they're simply chest-thumping and pontificating based on an emotional response. However, I'm guessing someone will point to the CS500. You know, the one that is yet to be launched but is somehow a fait accompli? It was said that a CS500 might take a few sales from Airbus but lots of sales from Boeing. Perhaps, perhaps not. Yet it's stated as fact. The CS500 is stated as fact. The new assembly rolling out CSeries in Mobile in 2020 is stated as fact. Airbus killing the A319neo, sacrificing the strength of the current A320neo to the CS500, and rewinging/stretching the A321 into an A322 are stated as fact. Etc.

ALL these things may come to pass, but the deal was just announced a few days ago. We have yet to see what will come of all this but in the meantime the "drug-like rush" has kicked into high gear from Vancouver to Vienna. So be it. Boeing screwed the pooch - no defense for them - but it's taken on a whole life of it's own in this thead. Good luck making sense of it all. :-)
-Dave


MAX’d out on MAX threads. If you are starting a thread, and it’s about the MAX - stop. There’s already a thread that covers it.
 
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767333ER
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 6:12 am

Siddar wrote:
On the one hand Canadians are saying cseries doesn't compete with Boeing and other hand they're saying how this deal with Airbus means real trouble for Boeing. Could you guy decide what point your arguing. Ether the cseries wasn't competing with Boeing and there is no impact to Boeing by this descion or cseries was competing with Boeing all along.

Or maybe, contrary to your apparent believe, there are two members to the CSeries family. The CS300 competes with Boeing and the CS100 does not compete with Boeing. The CS100 is what Delta ordered which is why many called foul over Boeing’s complaint. What’s really bad for Boeing though is that they didn’t really get their way, they want the plane dead, yet it is very much alive and probably stronger than ever. Think man!
Been on: 732 733 734 73G 738 752 763 A319 A320 A321 CRJ CR7 CRA/CR9 E145 E175 E190 F28 MD-82 MD-83 C172R C172S P2006T PA-28-180

2 ears for spatial hearing, 2 eyes for depth perception, 2 ears for balance... How did Boeing think 1 sensor was good enough?!
 
klkla
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 6:19 am

FoxtrotSierra wrote:
This is wickedly accurate as to what is probably going on in Boeing HQ right now, its almost scary! Whoever created this probably foresaw this scenario. https://www.youtube.com/watch?v=ul7KVapsJO4


This is so stupid and offensive I don't even know where to begin. YOU HAVE ISSUES.
 
douwd20
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 6:21 am

anfromme wrote:

I'll point out that you initially said "Airbus took over without paying anything", now you're chosing the even stronger "they got in for free".
"For free" would imply that you or myself could fulfill Airbus' duties under the agreement just as well as Airbus can.
That's clearly not the case. Without going out on a limb I dare say neither yourself nor me would be able to build an FAL in Mobile, nor provide marketing, sales, support, etc. for an airplane.
Which brings us back to "for free" being the myth that it is.

Lastly, as has already been pointed out, McD/Boeing was not a buy-out, but a merger, so the two cases aren't exactly comparable.


The exchange of one thing of value to another is valid.

anfromme wrote:
Airbus got a slow-selling plane for pennies and now they're going to spin straw into gold? Keep dreaming.
Hm - now they got it for pennies, not for free?

As a reminder: The CSeries has 360 firm orders. The last order to date was placed in December 2016.
The combined order total for the A319neo/737-7 is around 100. Neither has seen a single sale in over four years.

Keep dreaming that the reason for the relatively slow sales of the CSeries were to do with the market niche and/or the technical capabilities of the airplane.


Actually I will revert. Airbus is paying nothing up front for an entity worth $4 billion if the press is right. Everything is down the road IF the terms and conditions of the contract are meet. I have no thoughts whatsoever on why the C-Series is a slow seller but it is what it is. Rewind 10 years and Airbus said the A380 was the technological breakthrough for the next 20-30 years and it had Airbus sales behind it in a big way. But things didn't actually work out to the 1200+ frames they predicted.
 
PlanesNTrains
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 6:29 am

767333ER wrote:
Siddar wrote:
On the one hand Canadians are saying cseries doesn't compete with Boeing and other hand they're saying how this deal with Airbus means real trouble for Boeing. Could you guy decide what point your arguing. Ether the cseries wasn't competing with Boeing and there is no impact to Boeing by this descion or cseries was competing with Boeing all along.

Or maybe, contrary to your apparent believe, there are two members to the CSeries family. The CS300 competes with Boeing and the CS100 does not compete with Boeing. The CS100 is what Delta ordered which is why many called foul over Boeing’s complaint. What’s really bad for Boeing though is that they didn’t really get their way, they want the plane dead, yet it is very much alive and probably stronger than ever. Think man!


So when UA went 737-700 over CS100, it didn't count?
-Dave


MAX’d out on MAX threads. If you are starting a thread, and it’s about the MAX - stop. There’s already a thread that covers it.
 
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LockheedBBD
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 7:36 am

LockheedBBD wrote:
yowza wrote:
It looks like Boeing is on a bit of a charm offensive. Canadian social media channels are seeing a lot of this kind of thing: https://postimg.org/image/2eg1e0ko6j/
YOWza


I don't really understand the point of the campaign. Ordinary citizens aren't the ones purchasing aircraft, maybe they should be sending gift baskets to airline CEOs and government officials instead. In their campaign, they have Vancouver, Canada as the backdrop, which is a bit odd. There isn't an aviation industry there (or any Boeing facilities), the backdrop should have been Mirabel! :hyper:



Nevermind, I've finally figured out why they chose Vancouver as the backdrop after some digging. Mr. Boeing spent quite a bit of time wandering around British Columbia in his boat, and he even a purchased a yacht building company in Vancouver (long gone). Interestingly enough, when he passed away Mr. Boeing's ashes were scattered around in British Columbia since he spent much of his downtime there (boating).

Sources:
http://www.boeing.com/resources/boeingd ... graphy.pdf
http://shipbuildinghistory.com/canadayards/boeing.htm
http://seaisland1.homestead.com/Boeing.html
 
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scbriml
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Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Fri Oct 20, 2017 7:38 am

BREECH wrote:
And no, I don't think Airbus bought BBD to kill off Q400. What I said was that Airbus now has two competing products on their hands, both of which need investments to continue. One of them has to go. And it's going to be the Q400.


This is where you are totally wrong - Airbus hasn't and isn't buying BBD. They're buying the C Series, nothing else (although they will have the option to buy 5% of BBD shares).
Time flies like an arrow. Fruit flies like a banana!
There are 10 types of people in the World - those that understand binary and those that don't.
 
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LockheedBBD
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 7:44 am

Siddar wrote:
On the one hand Canadians are saying cseries doesn't compete with Boeing and other hand they're saying how this deal with Airbus means real trouble for Boeing. Could you guy decide what point your arguing. Ether the cseries wasn't competing with Boeing and there is no impact to Boeing by this descion or cseries was competing with Boeing all along.


That is a valid point. The plane technically competes with Boeing (CS300 vs. 737-700).
 
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Richard28
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 8:01 am

LockheedBBD wrote:
Siddar wrote:
That is a valid point. The plane technically competes with Boeing (CS300 vs. 737-700).


Ironically, the 737-700 only competes against the CS300 when Boeing sell it way below production cost so the economics work!

crazy world, init!
 
tommy1808
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 8:18 am

Siddar wrote:
On the one hand Canadians are saying cseries doesn't compete with Boeing and other hand they're saying how this deal with Airbus means real trouble for Boeing. Could you guy decide what point your arguing. Ether the cseries wasn't competing with Boeing and there is no impact to Boeing by this descion or cseries was competing with Boeing all along.


The CS Series isn´t a problem for Boeing as long as it is Bombardiers product only. It is a product for companies that do need a 100 seater and not more than 160 seats (or 150 in an non-LCC config). That is where Boeing starts to offer, hence that is pretty much different customers. Therefore it doesn´t have much effect on Boeings business, the 700/max-7 are not exactly selling like hot cake.

Bring Airbus into the game and the A320 family follow up product: Airbus now can comfortably ignore the 150 seat market (i.e. A319) and focus to optimize the Plattform around the A320/21, or if the do the CS500 for basically shum change compared to a new program, they can optimize around A321/"22".

That is the threat to Boeing, they either have to give up a chunk of the narrow body market, either the low or the top end, start two clean sheet programs or have one "i got something" solution at either end that is terrible in operating economics (736/A318 style).

And if they decide to drop the 150 seat market, that business and money is going to Airbus. If they decide not to drop that market, the A321/(22) become even more profitable. If they decide to develop two frames, they have higher Unit Costs than Airbus due to R&D, Tooling, .....

best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
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scbriml
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 8:27 am

douwd20 wrote:
Airbus is paying nothing up front for an entity worth $4 billion if the press is right. Everything is down the road IF the terms and conditions of the contract are meet.


Building a FAL in Mobile. Providing purchasing support for CS production. Providing sales & marketing support for CS. Providing customer support for CS. These are what Airbus is providing in return for 50.01% of CSALP. None of those things cost nothing.

#EndTheMyth

douwd20 wrote:
I have no thoughts whatsoever on why the C-Series is a slow seller but it is what it is.


We can't help you if you chose to ignore the explanations in this very thread.
Time flies like an arrow. Fruit flies like a banana!
There are 10 types of people in the World - those that understand binary and those that don't.
 
WIederling
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 8:35 am

kitplane01 wrote:
Here is another: Have the design rights to your product be owned in a country that has a low tax rate (it does not matter where it was actually designed .. this is a legal/intellectual property move).


This is the way how Opel was shown to be unprofitable by their master GM.
Sell all IP rights for a dollar to some GM offshore company.
Now let Opel in Germany pay for using that IP with 20% of revenue.

Profits in that venue are below 10%. voila bleeding 10+% of revenue all the time.
Before that : lean on Opel to have them produce products that nobody wants.
( though that probably was just American hubris. )
Murphy is an optimist
 
rheinwaldner
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 9:12 am

Siddar wrote:
On the one hand Canadians are saying cseries doesn't compete with Boeing and other hand they're saying how this deal with Airbus means real trouble for Boeing. Could you guy decide what point your arguing. Ether the cseries wasn't competing with Boeing and there is no impact to Boeing by this descion or cseries was competing with Boeing all along.

All that was said in this thread, is that Boeing did not compete for the DL order. Which is true. That overall and mid-/long-term the CSeries can become a competition to Boeing was confirmed by Boeing themselves (why would they have bothered otherwise?).

I agree with PlanesNTrains that it would take the CS500 to make Boeing really nervous. A really low hanging fruit, which is probably the reason why Boeing now really gives the impression of being nervous.

As I see it, the CSeries was hampered on the market primarily because of the uncertain future. The aircraft is targeted to the regional airlines of this world and not primarily to the mainlines. And the regional airlines are exactly those, who tend to shy away from unproven aircraft. But bringing the CSeries (or any other new design, that was a big step forward for the vendor) to maturity typically requires one ore more mainline airlines, that have the nerves, the budget and the staff to bring the aircraft through the nurturing phase. All this is a thing of the past now. Backed by Airbus all the smaller regional airlines can now have a second look at the CSeries. This time without fearing a potential total collapse just because the Vendor has a shacky long-term outlook.
Many things are difficult, all things are possible!
 
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SamYeager2016
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 9:23 am

klkla wrote:
FoxtrotSierra wrote:
This is wickedly accurate as to what is probably going on in Boeing HQ right now, its almost scary! Whoever created this probably foresaw this scenario. https://www.youtube.com/watch?v=ul7KVapsJO4


This is so stupid and offensive I don't even know where to begin. YOU HAVE ISSUES.


Oh give over. Are you seriously telling me you haven't seen that clip used over and over to mock various companies before now?
 
ytz
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 9:43 am

rheinwaldner wrote:
Siddar wrote:
On the one hand Canadians are saying cseries doesn't compete with Boeing and other hand they're saying how this deal with Airbus means real trouble for Boeing. Could you guy decide what point your arguing. Ether the cseries wasn't competing with Boeing and there is no impact to Boeing by this descion or cseries was competing with Boeing all along.

All that was said in this thread, is that Boeing did not compete for the DL order. Which is true. That overall and mid-/long-term the CSeries can become a competition to Boeing was confirmed by Boeing themselves (why would they have bothered otherwise?).

I agree with PlanesNTrains that it would take the CS500 to make Boeing really nervous. A really low hanging fruit, which is probably the reason why Boeing now really gives the impression of being nervous.

As I see it, the CSeries was hampered on the market primarily because of the uncertain future. The aircraft is targeted to the regional airlines of this world and not primarily to the mainlines. And the regional airlines are exactly those, who tend to shy away from unproven aircraft. But bringing the CSeries (or any other new design, that was a big step forward for the vendor) to maturity typically requires one ore more mainline airlines, that have the nerves, the budget and the staff to bring the aircraft through the nurturing phase. All this is a thing of the past now. Backed by Airbus all the smaller regional airlines can now have a second look at the CSeries. This time without fearing a potential total collapse just because the Vendor has a shacky long-term outlook.


Why do people keep calling this a regional aircraft? It isn't. 100-130 seats in 2-class with over 3000nm range is not regional. It's mainline. And that's why we see carriers like Swiss, Delta, Air Canada and Korean buy the CSeries. They are all going to use them on mainline service. It does overlap regionals a little at the lower end. And that's to allow mainline operators to replace their regionals. Exactly as DL intends to do with the CS100.

The only reasons it didn't sell before was uncertainty with Bombardier, and the constant competition from Airbus and Boeing. That's basically gone now.

Boeing is nervous. And they should be. The writing is on the wall. The CS500 is easy and competitive. And Airbus now has access to both IP and a plant that's already making carbon fibre wings for a narrowbody. Everyone should remember, that no Airbus or Boeing narrowbody airplane has a carbon wing. Bombardier was actually ahead of the game here. But now that Airbus has access to the tech, they could deploy that more easily than their competitors.

The only thing stopping Airbus is the possible cannibalization of some of their sales and the profit bleed to Bombardier. But the thing is, Airbus will also control the price and the production rate of any CS500 that's developed. They can limit cannibalization quite tactically.

There are many who say that Airbus won't launch the CS500 anytime soon. And they could well be right. But that doesn't make the threat go away for Boeing. They have to consider the implications of this deal. It will be top of mind with BCA execs, how quickly and cheaply, Airbus could bring the CS500, and a rewinged and stretch 320 and 321 to market.

Airbus won't say a peep till after the deal closes later next year. That's when the real fireworks begin.
 
thumper76
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 10:08 am

Siddar wrote:
On the one hand Canadians are saying cseries doesn't compete with Boeing and other hand they're saying how this deal with Airbus means real trouble for Boeing. Could you guy decide what point your arguing. Ether the cseries wasn't competing with Boeing and there is no impact to Boeing by this descion or cseries was competing with Boeing all along.

Cs100 and cs300 do not compete, the cs500 does. Boeing was and still is trying to kill the program before the cs500 comes out. If the cs100 and cs300 were able to get traction bombardier would have been able to produce an aircraft that does compete. The money made by the cs100 and cs300 would have given BBD money to directly compete reducing any chances of tariffs. The tactics used by Boeing are IMHO despicable. Any chance the cseries had was killed when the US government decided the cs100 and cs300 competed with boeings products... Witch they do not. The cseries was built because of the lack of competition in that size. The only way ITC could rule harm to Boeing would be by using future harm, which may or may not come. In the real world if a company wants to stay on the top they have to renew their products to compete in the current market. The bullying to the south has to stop!
 
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SheikhDjibouti
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Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Fri Oct 20, 2017 10:15 am

BREECH wrote:
It is so convenient when people not only answer your questions, but also ask themselves questions for you and then answer them as well. You did a great job arguing with you for me. Thank you very much.

aerolimani wrote:
You're welcome. I actually do try and look at things from all perspectives.

I'm all in favour of that too; it is a refreshing change from the blinkered dogmatism that shines through in the case of so many posters.
Would it be naïve of me to suggest that some of them sound like company men, infiltrating a.net in order to promote pro- and anti-Boeing propaganda?
:stirthepot:
Nothing to see here; move along please.
 
flipdewaf
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 10:17 am

PPVRA wrote:
This whole deal doesn’t give us a simple price or valuation that gives us an idea of how much the Cseries program is truly worth. That’s what I meant.

But the critical thing here surely is that the value is not 1 static number, in virtually all transactions. The value of what Airbus has gained is greater than that which it was/is to Bombardier. The Cseries program is worth more with the input of Airbus than it is without.

If the worth of an item to an individual or company is greater than the value to the current owner then there is a chance a transaction will happen. When I go to the pub across the road from my house then the worth of a pint to me is greater than the value of £3.50 that has been assigned by the pub then I will purchase it. There are cheaper and less nice pubs a greater distance from my house that will sell the same pint for £3.00, the pint is the same but the value of that pint is very different.

Fred
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astuteman
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 10:18 am

PlanesNTrains wrote:
For many, they're not arguing a point, they're simply chest-thumping and pontificating based on an emotional response. However, I'm guessing someone will point to the CS500. You know, the one that is yet to be launched but is somehow a fait accompli? It was said that a CS500 might take a few sales from Airbus but lots of sales from Boeing. Perhaps, perhaps not. Yet it's stated as fact. The CS500 is stated as fact. The new assembly rolling out CSeries in Mobile in 2020 is stated as fact. Airbus killing the A319neo, sacrificing the strength of the current A320neo to the CS500, and rewinging/stretching the A321 into an A322 are stated as fact. Etc.

ALL these things may come to pass, but the deal was just announced a few days ago. We have yet to see what will come of all this but in the meantime the "drug-like rush" has kicked into high gear from Vancouver to Vienna. So be it. Boeing screwed the pooch - no defense for them - but it's taken on a whole life of it's own in this thead. Good luck making sense of it all. :-)


For what its worth..

I haven't seen anyone state the CS500 as fact - that's hyperbole IMO.
What they have stated is that the potential for a CS500 gives Airbus strategic options going forward that it didn't have before. Assuming the deal goes though, that will be a fact.
I think your view that people see such a CS500 taking more sales from Boeing than Airbus is more rooted in the point above - i.e. Airbus are likely to move the A32X "uphill" if a CS500 gets built. It would clearly be a threat to the 737-7 and 737-8. The sensible counter to that is that Boeing would presumably then go ahead with NSA - no need for any hyperbole.

You are right to point out that the deal was only announced a few days ago.
Let me ask:- Do you think it is unlikely to go ahead?
For what its worth, my guess would be in the P80 to P90 range of probability. I can't really imagine this not happening now
(I'll ignore the la-la land notion that somehow Boeing could, or even would counter-bid, or that anyone would even give a rats ass if they did)

On that basis, the assembly line in Mobile can reasonably be assumed to be a fact as Airbus have publicly declared that as their strategy, and explained why.
The sacrifice of the A319 can also be assumed to be fact as Airbus have publicly declared that as their strategy, and explained why.

There has certainly been a lot of adrenaline floating around on the thread - you are right about that.
I think most of that is driven by a view that Boeing's bully-boy tactics have been sideswiped by a proposed strategic move that has been described by industry watchers as "volcanic".
There is also the unavoidable reality that BBD and Airbus shares went up, whilst Boeing's went down.
I can't imagine that those who (rightly) point out Boeing's strong stock market performance as a measure of the positive sentiment for the company are now going to suddenly ignore that. Actually, I can easily imagine it, but let's not go there.

Assuming the deal does go through, not only do Airbus extend their portfolio, but they also gain 2 more FAL's in "home countries".
In doing so they have once again demonstrated a willingness to behave proactively and inclusively, as 2 FAL's in China already demonstrates.
The global spread of FAL's that detractors point out is tactically sub-optimal from a cost viewpoint, is absolutely the strategic way forward for a global reach business. Show me any other global industry where that hasn't been the case.

Boeing on the other hand appear to have exhibited an isolationist stance, and a heavy-handed one at that.
They are a good decade behind Airbus in this sense in my book, and personally, I think that this will have long-term ramifications for Boeing.

The ball just got a lot harder in my book.
If MOM gets produced, I am fascinated to see what happens when Boeing try to sell early production slots in Canada or the EU.
I can easily see regulatory authorities tangling them up for years, just because they can.

I get the desire to damp the adrenaline on this thread.
There's nothing wrong with trying to inject some reality.
But I think that any effort to consign this to the "nothing has really happened" bin would be a head-in-the-sand response.

Something most definitely happened this week, and it will most definitely have market defining outcomes, whatever happens. :yes:

Rgds
 
washingtonflyer
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Re: Airbus and Bombardier Announce C Series Partnership

Fri Oct 20, 2017 10:38 am

ThePointblank wrote:
washingtonflyer wrote:
ThePointblank wrote:
However, the US government evaluates the "substantial transformation" by looking at how significantly was the item changed via tariff shift, with another analysis done to determine value added.


Nope, I disagree. CBP looked at going towards tariff shift but has not adopted it. Let me give you a perfect example. A piece of steel pipe that is low grade material and is heat treated in order to change its tensile strength and yield strength in a third country was found to be a product of the third country. There was -no- tariff shift at all. Just a heat treat process that changed the item from "green tube" to a premium pipe product.

I said the US government checks how significantly the item was changed via tariff shift, with another analysis done to determine value added. If there is no tariff shift, but there is significant regional value added, then the item becomes a product of the country where the value was increased.


And I will say that outside of FTAs and textiles, that you are wrong.

Read CBP's informed compliance manual on rules of origin.

For non-preference programs and for non-textiles, CBP states that "On the other hand, all U.S. non-preferential rules of origin schemes employ the “substantial transformation” criterion for goods that consist in whole or in part of materials from more than one country. In the majority of the non-preferential schemes, the substantial transformation criterion is applied on a case-by-case basis, and it is based on a change in name/character/use method (i.e., an article that consists in whole or in part of materials from more than one country is a product of the country in which it has been substantially transformed into a new and different article of commerce with a name, character, and use distinct from that of the article or articles from which is was so transformed)."

CBP then goes on to state: "A rules of origin scheme for textiles and textile products exists that employs the substantial transformation criterion. It is based on a tariff-shift method."

Again, in the example I gave above, there was absolutely no tariff shift yet CBP found a process to confer a country of origin shift.

ThePointblank wrote:
washingtonflyer wrote:
ThePointblank wrote:
Each non-originating material has to undergo a change in tariff classification, specified in the detailed schedule of HS tariff heading or subheading changes corresponding to each product or group of products. In some cases it is a change at the four-digit and in others at the six-digit subheading level of the tariff schedule. In certain circumstances where there is no change in the level of tariff classification specified in the first rule applicable to the good, origin can be conferred if a lesser tariff shift is satisfied and the regional value-added is not less than 60% of the transaction value or 50% of the net cost of the good.


Regional value content and total value content (build up or build down methods) are relevant in certain FTAs but not for general classification of goods where there is no FTA. If you have a Chinese coil of steel (hot-roll) and you re-roll it in India (cold rolling), you've added about 15% value to the product, but you didn't add anything to it. But, according to Ferrostaal v. United States, you've got a substantial transformation. If you have a cold-rolled coil in China and you add a zinc-aluminum coating to it in the Philippines (maybe a 15% value added), its now a Philippines product pursuant to Ferrostaal.

That example is erroneous, because the processes you mentioned does cause a HS code change.

As hot rolled steel coil, the HS code heading for the coil is 7208 (Flat-rolled products of iron or non-alloy steel, of a width of 600 mm or more, hot-rolled, not clad, plated or coated)

Cold rolling it changes it to 7209. (Flat-rolled products of iron or non-alloy steel, of a width of 600 mm or more, cold-rolled (cold-reduced), not clad, plated or coated.)

Applying a zinc-alumiumum coating to it, it becomes 7210 (Flat-rolled products of iron or non-alloy steel, of a width of 600 mm or more, clad, plated or coated.)


Agree that you do have a tariff shift, but you would fail rule of origin under your hypothesis because you didn't meet your belief of a regional value added content threshold. There was practically no value added in these two examples, yet CBP finds these to be substantial transformations.
 
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 10:42 am

mjoelnir wrote:
It was share swap, McDonald --Douglas owners got their shares swapped for Boeing shares. That is not buying, you got your shares replaced,, no money involved.

And Airbus got half of CSALP for swapping -- promises. Promises to support and market the plane, and promises to buy the other half of the enterprise over time. Good thing BBD retained control to make sure Airbus was really going to fulfill their promises in a fair way -- but wait, nope, they gave away a voting majority of the shares and control of the board too.

rheinwaldner wrote:
Revelation wrote:
If a positive delta on any account is not free money, then I really wonder, where the sound mind has gone.

Positive delta relative to what?

Easy: ...compared to the account balance if the subsidy would never have existed!!

And LH "saves" a lot of money every year not paying list price for airliners, but then again, no one else does either. Good thing the vendor subsidizes them, right?

anfromme wrote:
DfwRevolution wrote:
tommy1808 wrote:
Boeing will have 8 Billion more in the bank at some point than they would otherwise have or will they not? Who would have that money if it isn´t in Boeing bank account? The Tax payer. Ergo: 8 Billion tax payer money are given to Boeing.


No. No. No. Wrong. Wrong. Wrong. Stop. Stop. Stop.
Your premise is therefore that private property doesn't exist and everything belongs to the taxpayer until the government says otherwise.


Absolutely not.
His premise is that you owe the tax that you owe and it's not up for you to decide whether you feel like paying it or not.

That's a false premise with regard to setting up new enterprises. They can and do shop for the most advantageous location to establish the enterprise, and a big part of that is the tax rate. It happens all around the world, including the EU.
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mjoelnir
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 11:10 am

Revelation wrote:
mjoelnir wrote:
It was share swap, McDonald --Douglas owners got their shares swapped for Boeing shares. That is not buying, you got your shares replaced,, no money involved.

And Airbus got half of CSALP for swapping -- promises. Promises to support and market the plane, and promises to buy the other half of the enterprise over time. Good thing BBD retained control to make sure Airbus was really going to fulfill their promises in a fair way -- but wait, nope, they gave away a voting majority of the shares and control of the board too.

rheinwaldner wrote:
Revelation wrote:
Positive delta relative to what?

Easy: ...compared to the account balance if the subsidy would never have existed!!

And LH "saves" a lot of money every year not paying list price for airliners, but then again, no one else does either. Good thing the vendor subsidizes them, right?


I do not disagree with that the C series deal was a swap. But I did heavily disagree that the Boeing Douglas-McDonald was a cash on the table deal.

And is there a better way to insure Airbus does its promises, than letting them own that part of the C series?

Airbus will spend money on the C series, a FAL and all the support regarding supply line, sales and services cost money.

As it is now clear that there exist the tools for a second FAL, I expect Airbus to move very fast regarding Mobile.
 
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 11:13 am

Revelation wrote:
That's a false premise with regard to setting up new enterprises. They can and do shop for the most advantageous location to establish the enterprise, and a big part of that is the tax rate. It happens all around the world, including the EU.


Which is basically only available to large companies that have the resources to do so, hence even increases the anti-competitive effects of tax breaks.

"We should give them tax breaks or someone else will" is also pretty much along the lines of "Why have laws, who wants to breaks them anyways".

That problem has to be solved via legislation, not via anti-competitive "make bigger what is already big" tax gifts to "buy" the business, with the tax payer footing the bill.

best regards
Thomas
Well, there is prophecy in the bible after all: 2 Timothy 3:1-6
 
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 11:31 am

scbriml wrote:
Building a FAL in Mobile. Providing purchasing support for CS production. Providing sales & marketing support for CS. Providing customer support for CS. These are what Airbus is providing in return for 50.01% of CSALP. None of those things cost nothing.

Thing is, all the presser says is

Growing market for C Series results in second Final Assembly Line in Mobile, Alabama, serving U.S. customers

It doesn't say that Airbus is building it, or if CSALP is building it, or BBD is building it, etc. There's plenty of precedent for multiple vendors having factories at the same airport. It's already happening with BBD and Pratt at YMX. Similar thing is how Boeing Charleston got started. So it would be nice to have more facts before we assert that Airbus is the entity building the FAL. You would think that Airbus would prefer that the money come from CSALP rather than its own coffers.
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 11:45 am

Sorry If this was posted before

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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 11:48 am

mjoelnir wrote:
I do not disagree with that the C series deal was a swap. But I did heavily disagree that the Boeing Douglas-McDonald was a cash on the table deal.

And is there a better way to insure Airbus does its promises, than letting them own that part of the C series?

Airbus will spend money on the C series, a FAL and all the support regarding supply line, sales and services cost money.

As it is now clear that there exist the tools for a second FAL, I expect Airbus to move very fast regarding Mobile.

To me, it's interesting territory for MBA level game theory. Unfortunately I don't have an MBA nor a strong understanding of game theory.

Clearly BBD and Quebec benefit from making the value of CSALP as high as possible at the time of the buyout. Clearly that's less beneficial to Airbus because while it raises the value of its holding it also raises the price of the buyout. One could argue it's in their best interest to keep CSALP a small entity with a weak balance sheet till they can effect the buyout, then use the nucleus of what they now own along with its intellectual property to rapidly grow the value of their newly acquired asset. The problem is that the intellectual property doesn't age all that well. The longer they hold it, the less value it has.

It makes you wonder about how Airbus will do any follow-on "CS500". If they do it in the context of CSALP and it matures in less than seven years, then they are giving away half of the program to Quebec and BBD.

If anything, it will be in Airbus's best interest to keep any future contracts for goods and services as back loaded as possible so more revenue flows after the buyout.

Again, I'm not an MBA, but the structure of the deal intrigues me.
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astuteman
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 11:50 am

Revelation wrote:
scbriml wrote:
Building a FAL in Mobile. Providing purchasing support for CS production. Providing sales & marketing support for CS. Providing customer support for CS. These are what Airbus is providing in return for 50.01% of CSALP. None of those things cost nothing.

Thing is, all the presser says is

Growing market for C Series results in second Final Assembly Line in Mobile, Alabama, serving U.S. customers

It doesn't say that Airbus is building it, or if CSALP is building it, or BBD is building it, etc. There's plenty of precedent for multiple vendors having factories at the same airport. It's already happening with BBD and Pratt at YMX. Similar thing is how Boeing Charleston got started. So it would be nice to have more facts before we assert that Airbus is the entity building the FAL. You would think that Airbus would prefer that the money come from CSALP rather than its own coffers.


That's all the headline says.

If you read further down the Airbus press release

http://www.airbus.com/newsroom/press-re ... ement.html

it says

Airbus’ global industrial footprint will expand with the Final Assembly Line in Canada and additional C Series production at Airbus’ manufacturing site in Alabama, U.S


Which quite explicitly states that AIRBUS' global industrial footprint will expand at the manufacturing site in Alabama.

I suppose you can stay on the pedantic trail and say that this doesn't actually say who will BUILD the FAL in Alabama, but it very clearly demonstrates who it will be owned by. Realistically, I can't see any other than the FAL will be "built" by the CSALP entity of which Airbus would be the majority shareholder, and ultimately sole owner of...

Rgds
 
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 11:53 am

Revelation wrote:
scbriml wrote:
Building a FAL in Mobile. Providing purchasing support for CS production. Providing sales & marketing support for CS. Providing customer support for CS. These are what Airbus is providing in return for 50.01% of CSALP. None of those things cost nothing.

Thing is, all the presser says is

Growing market for C Series results in second Final Assembly Line in Mobile, Alabama, serving U.S. customers

It doesn't say that Airbus is building it, or if CSALP is building it, or BBD is building it, etc. There's plenty of precedent for multiple vendors having factories at the same airport. It's already happening with BBD and Pratt at YMX. Similar thing is how Boeing Charleston got started. So it would be nice to have more facts before we assert that Airbus is the entity building the FAL. You would think that Airbus would prefer that the money come from CSALP rather than its own coffers.


You declared that Airbus gets its part of CSALP for nothing. Now you say that you do not know. If there would have been possible for BBD to do this on there own, they would have done so. What you think what Airbus would prefer is what you think, nothing else.
The second FAL in Mobil is a plain answer to the protectionist behavior of the USA commerce department.
 
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 11:53 am

I haven't seen anyone daring to touch the subject, but culture / language seems to have not been absent in the deal going this direction.

Cooperation won over Powerplay.
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 12:14 pm

tommy1808 wrote:
Revelation wrote:
That's a false premise with regard to setting up new enterprises. They can and do shop for the most advantageous location to establish the enterprise, and a big part of that is the tax rate. It happens all around the world, including the EU.

Which is basically only available to large companies that have the resources to do so, hence even increases the anti-competitive effects of tax breaks.

This means that these tax breaks are not "free money" as so many here assert: you have to be a significant business with a track record of producing products and improving properties and creating jobs. These are all things that benefit those tax payers footing the bills.

tommy1808 wrote:
"We should give them tax breaks or someone else will" is also pretty much along the lines of "Why have laws, who wants to breaks them anyways".

That problem has to be solved via legislation, not via anti-competitive "make bigger what is already big" tax gifts to "buy" the business, with the tax payer footing the bill.

best regards
Thomas

You seem to think taxation is a uniform thing, and if not, it will be once sufficient legislation is applied.

That is a nonsense.

And one of the reason it is not uniform is because our elected officials want ways to encourage or discourage enterprises in different areas.

These same elected officials are the ones creating the legislation, so you know how this will turn out.
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 12:23 pm

astuteman wrote:
That's all the headline says.

If you read further down the Airbus press release

http://www.airbus.com/newsroom/press-re ... ement.html

it says

Airbus’ global industrial footprint will expand with the Final Assembly Line in Canada and additional C Series production at Airbus’ manufacturing site in Alabama, U.S


Which quite explicitly states that AIRBUS' global industrial footprint will expand at the manufacturing site in Alabama.

I suppose you can stay on the pedantic trail and say that this doesn't actually say who will BUILD the FAL in Alabama, but it very clearly demonstrates who it will be owned by. Realistically, I can't see any other than the FAL will be "built" by the CSALP entity of which Airbus would be the majority shareholder, and ultimately sole owner of...

Rgds

My bad. I searched the presser for the word Mobile and should have used Alabama instead, then I would have the 2nd statement as well.

If I was being pedantic I would wonder what "additional C Series production" meant as contrasted to just saying "second Final Assembly Line" but will grant the press release its license to be intentionally vague.

I agree with the idea that CSALP will almost certainly be the builder of the facility and AIrbus will become its ultimate owner. In my mind that is distinct from saying Airbus will build it, because BBD will be pumping in a lot of money to CSALP over the next several years.
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 12:48 pm

FoxtrotSierra wrote:
This is wickedly accurate as to what is probably going on in Boeing HQ right now, its almost scary! Whoever created this probably foresaw this scenario. https://www.youtube.com/watch?v=ul7KVapsJO4


:rotfl: :rotfl: :rotfl: :rotfl:

Probably some direct quotes in there somewhere
 
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 12:48 pm

Revelation wrote:
This means that these tax breaks are not "free money" as so many here assert: you have to be a significant business with a track record of producing products and improving properties and creating jobs. These are all things that benefit those tax payers footing the bills.


And that doesn´t mean it is anti-competitive how? And of course without legally binding Job guarantees, that Boeing doesn´t give, the point is mute. It also does in no way mean the money is less free for them. They have 8 Bn more in the bank and they paid exactly nothing for it. I also don´t see any proof that 8 Bn in Boeings hands will lead to more Jobs and Business created than 8Bn in citizens hands, or even the governments. Both don´t have much of a tendency to use money to relocate jobs out of the country, use more outsourcing or park it in tax heavens.

Fact remains: RLI increase competition, Tax breaks prevent it.

You seem to think taxation is a uniform thing, and if not, it will be once sufficient legislation is applied.

That is a nonsense.


The Tax code is just as uniformly applied and changed to reflect that as far as governments think it makes sense or as much as they are bribed/lobbied into thinking so.

Best example: Apple, Google, Facebook. Very good at finding loopholes to get around paying taxes in Europe. Well, in the future it seems they will be taxed on turnover and not on profit. There is another fractured foot with a bullet hole ..... lesson: pay your taxes as they are meant to be paid, or we go after your revenue. If you don´t like that, well there is a 500 million people market that will be lost to you.

best regards
Thomas
Last edited by tommy1808 on Fri Oct 20, 2017 12:50 pm, edited 1 time in total.
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helhem
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 12:59 pm

Very interesting development. I hope more information will come out of this. The clarity in 10 to 15 years will make for some interesting conclusions.

I think grilling Bombardier over subsidies was immoral. Like Boeing never gets any subsidies. Any info about the level of subsidy compared to the other players. I doubt they consider fairness and morality when they made their moves. Now assume if C-series would not have been put under tariffs and everything else would have been smooth sailing as well. C-series was not selling anywhere that much even before that. Perhaps the financial future of Bombardier was under question too much for airlines. Or is it the plane itself. Wrong size , too expensive? Wrong size perhaps going more after the 737 lines would have made more sense in that case. The responses would have been just as bad.

If Bombardier would have kept going on alone and the c-series was moderately successful? Would Bombardier repeat the process? New regional turboprop , 757 , new widebodies or a380 replacement or what? . After so much troubles perhaps Bombardier would be very cautious in moving forward. Perhaps doing nothing would have also been a good move as well.

Who was the potential Chinese buyer of the program? Comac?
 
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Polot
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 1:01 pm

tommy1808 wrote:
Revelation wrote:
This means that these tax breaks are not "free money" as so many here assert: you have to be a significant business with a track record of producing products and improving properties and creating jobs. These are all things that benefit those tax payers footing the bills.


And that doesn´t mean it is anti-competitive how? And of course without legally binding Job guarantees, that Boeing doesn´t give, the point is mute. It also does in no way mean the money is less free for them. They have 8 Bn more in the bank and they paid exactly nothing for it. I also don´t see any proof that 8 Bn in Boeings hands will lead to more Jobs and Business created than 8Bn in citizens hands, or even the governments. Both don´t have much of a tendency to use money to relocate jobs out of the country, use more outsourcing or park it in tax heavens.

Fact remains: RLI increase competition, Tax breaks prevent it.

RLI only "increase" competition if they are freely given out to everyone. Just like with tax breaks, I suspect the EU or anyone else will really only give you a reimbursable launch investment if A) you are a government owned entity or B) you are a significant business with a track record of producing products and improving properties and creating jobs.

The EU is not going to give Polot Aviation Enterprises based out of a garage a RLI to build an aircraft, just like how nobody will give me a tax break to do the same. And if they do and I failed at least with the tax break I'm just costing the tax payers potential money, while with the RLI you just lost real money (you are approaching RLIs like they are a 100% guaranteed success for taxpayers. They have worked out for Airbus, but that is because Airbus is now a significant business with a track record of producing products and improving properties and creating jobs).
Last edited by Polot on Fri Oct 20, 2017 1:07 pm, edited 2 times in total.
 
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 1:02 pm

mjoelnir wrote:
You declared that Airbus gets its part of CSALP for nothing.

I have not made that declaration. I think you are confusing me with @douwd20.

My first post regarding valuation was way back on page 3 ( viewtopic.php?f=3&t=1376389&start=100#p19890319 ) and says:

Revelation wrote:
Seems like a no brainer for Airbus and a desperation move by BBD. BBD has done all the heavy lifting, they're on the hook for something like 700M dollars more over the next three years presuming the program needs it (which it seems it will as the program is in ramp up mode). If the product is a success in 7.5 years then Airbus can buy them out at market value, then BBD gets to start all over again with 31% of the market value as a nest egg. If it doesn't go well, Airbus can force BBD to buy them out which will be the final death of BBD.

Bad news for BBD, good news for aviation. Seems BBD made the best deal that they could.

Personally, I think Airbus is a great home for the program. Best of luck to BBD and Airbus!

I've striken a sentence that was later shown to be a mis-interpretation of the press release. Other than that, I think the statement still captures my feelings with regard to valuation.

mjoelnir wrote:
If there would have been possible for BBD to do this on there own, they would have done so.

I agree.

mjoelnir wrote:
What you think what Airbus would prefer is what you think, nothing else.

It's an opinion and it's one based on some fairly obvious reasoning. This is a discussion forum. I'm entitled to it...

mjoelnir wrote:
The second FAL in Mobil is a plain answer to the protectionist behavior of the USA commerce department.

.... just as you are entitled to your opinion without being belittled for stating it.

Of course I don't think I'm belittling you for posting your opinion by pointing out that Tom Enders himself said the deal was not related to the tariff issue, I'm just injecting some facts to further the discussion.
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 1:10 pm

tommy1808 wrote:
The Tax code is just as uniformly applied and changed to reflect that as far as governments think it makes sense or as much as they are bribed/lobbied into thinking so.

So you are still expecting legislation to "solve issues" whilst stating that the ones who write the legislation are bribed/lobbied?

Seems you will be disappointed.
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 1:38 pm

Revelation wrote:
tommy1808 wrote:
The Tax code is just as uniformly applied and changed to reflect that as far as governments think it makes sense or as much as they are bribed/lobbied into thinking so.

So you are still expecting legislation to "solve issues" whilst stating that the ones who write the legislation are bribed/lobbied?

Seems you will be disappointed.


There was a qualifier involved, there are limits (as some US companies are just finding out to the tune of several billions). Well, maybe the level of corruption is just higher in the US.

Your "oh, they will find ways around it, so better roll over and just give them money, even if they use it to prevent competition" outlook is a tat pessimistic.

Who knows, maybe those future 8 Bn US$ for free have been the enablers to undercut the CS series at UA and bring Bombardier into a situation where they could ultimately get a tariff slapped on the aircraft. Time to put a 100 mil Tarif on the first 80 777x delivered into the EU and Canada.

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rheinwaldner
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Re: Airbus and Bombardier Announce CSeries Partnership

Fri Oct 20, 2017 1:51 pm

ytz wrote:
Why do people keep calling this a regional aircraft? It isn't. 100-130 seats in 2-class with over 3000nm range is not regional. It's mainline. And that's why we see carriers like Swiss, Delta, Air Canada and Korean buy the CSeries. They are all going to use them on mainline service.

Ok, agreed, it is not only a regional aircraft. It will be the uncontested choice for regional airlines but it will also find a home in many mainline airlines. Airlines or airline groups that have a split between mainline and regional operations could be tempted in the future, to shift the 150 seat capacity to their regional branch using CSeries. B.t.w. the Swiss CSeries fleet is operated by the branch, that was formed from the ex-Crossair parts (called Swiss European Airlines initially).

Revelation wrote:
rheinwaldner wrote:
Revelation wrote:
Positive delta relative to what?

Easy: ...compared to the account balance if the subsidy would never have existed!!

And LH "saves" a lot of money every year not paying list price for airliners, but then again, no one else does either. Good thing the vendor subsidizes them, right?

Don't muddy the water by changing the topic. We were discussing about whether Boeings subsidies result in free money for them or not. You no longer seem to insist it is not. Which is correct, because Boeing indeed is free how they want to use positive delta on their account, that is created by the tax break. They should have paid amount A, got a special deal to pay amount B (this deal is called subsidy for anybody else), so the delta between A and B is their free money.

Revelation wrote:
tommy1808 wrote:
Revelation wrote:
That's a false premise with regard to setting up new enterprises. They can and do shop for the most advantageous location to establish the enterprise, and a big part of that is the tax rate. It happens all around the world, including the EU.

Which is basically only available to large companies that have the resources to do so, hence even increases the anti-competitive effects of tax breaks.

This means that these tax breaks are not "free money" as so many here assert: you have to be a significant business with a track record of producing products and improving properties and creating jobs. These are all things that benefit those tax payers footing the bills.

How on earth should preconditions for tax breaks determine the question whether they are free money (= subsidy) or not? What you are saying only means, that these kind of subsidies does only exist for large companies.

Likewise do the time aspect or benefits for customers not change one bit regarding the question, whether it is free money for Boeing or not.
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Re: Breaking: Airbus and Bombardier Announce C Series Partnership

Fri Oct 20, 2017 1:52 pm

ytz wrote:
BREECH wrote:
And no, I don't think Airbus bought BBD to kill off Q400. What I said was that Airbus now has two competing products on their hands, both of which need investments to continue. One of them has to go. And it's going to be the Q400.

As for things Airbus may want from BBD, it's hard to say. BBD has a great portfolio of business jets (with steady clientelle) and that's a growing market. CRJ are still selling and causing some grief to Embraer. Airbus is a master of streamlining and optimizing production, so that has potential. We'll see how it goes.


Airbus did not buy Bombardier. They bought a share in the CSeries program only.


I think BREECH sometimes needs to calm down and assess what he does and doesn't know before launching each new opinion upon us... :)

Genuinely surprised that he still hasn't realised Airbus has only taken 50+% of the CSeries and nothing at all of Bombardier itself. I thought that was already pointed out several pages ago!
Last edited by SomebodyInTLS on Fri Oct 20, 2017 1:54 pm, edited 1 time in total.
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