Oct. 3, 2017, © Leeham Co.: The other shoe in the Boeing-Bombardier trade complaint is to drop Wednesday when the US Department of Commerce makes its decision whether Boeing suffered harm, or there is a threat of harm, in the CS100 order by Delta Air Lines.
The DOC last week determined that Bombardier received illegal subsidies dating to the 2008 program launch of the CSeries, through the 2016 equity investments by the provincial government of Quebec and the federal government of Canada. Certain tax breaks were also deemed illegal subsidies by the DOC.
The determination was expected, even by Bombardier. But the DOC shocked the global aviation community by levying a 220% tariff. The rate is preliminary and won’t be finalized until next year, but absent some extraordinary event, it’s expected to be confirmed—followed by lengthy appeals.
The decision Wednesday relates to harm, or anti-dumping in legal terms. Here’s where the aviation community and observers, except for one who is prominent and who receives funding from Boeing, universally believe there is no case.
The Bombardier case relating to harm is in sharp contrast to the US-European Union trade battle over subsidies and launch aid between Boeing and Airbus before the World Trade Organization.
While the subsidies portion in the Bombardier and Airbus cases read like chapters out of the same book, there are sharp differences over “harm.”
Airbus and Boeing compete head-to-head in every airplane category. Observers debated the amounts of harm claimed by Airbus and Boeing in the respective US-EU complaints, but there was no disputing harm of some level occurred.
Contrast this with universal condemnation (except for the consultant who benefits from Boeing grants) of the Boeing claims that it is harmed and Bombardier threatens to put Boeing and the entire US aerospace industry out of business unless punished.
Boeing and Bombardier don’t compete at all in the 100-125 seat sector, which is at stake with the CS100 order by Delta in the current trade complaint.
The CS100, in Delta’s two-class configuration of 109-seats, doesn’t even match Boeing’s own “Single Aisle” description of its new Current Market Outlook; this begins at 110-seats. (Below this is Boeing’s definition for regional aircraft.)
Boeing didn’t offer an airplane to Delta that competed with the CS100. It doesn’t build an airplane that competes with the CS100.
Boeing does, however, offer the 737-700 and 737-7 MAX. Bombardier offers the directly competitive CS300, for which Delta has options. There is occasional talk of BBD offering an even larger CS500 that would be the same size as the 737-800 and 737-8.
It is this on which Boeing lays claim to harm. If Delta exercises options for the CS300, this airplane will kill the 737-700 and 7 MAX. If Bombardier builds the CS500, it will kill the 737-800 and 737-8 MAX. With it, Boeing will be brought down and with it, the US aerospace industry, Boeing claims.
Observers, including LNC, see these arguments as preposterous.
The 737-700 and 737-800 will cease production by 2019 because these are superseded by the MAX. This has nothing to do with the CSeries.
The MAX 7, even after redesign to add 12 more seats (and which makes it closely competitive with the smaller-capacity CS300, according to LNC’s analysis), is a niche airplane for hot-and-high and difficult airports. Airlines clearly prefer the larger MAX 8, MAX 9 and now the MAX 10. The MAX 8 is the preferred airplane but even the less desirable MAX 9/10 have each outsold the MAX 7.
Suggesting Bombardier will develop a CS500 is, at this point, theoretical.
With Boeing not building a 100-125-seat aircraft or competing in the Delta bid, where is the harm that Bombardier won this order?
With the 737-700 and 737-800 being superseded by Boeing’s own MAX product line, where’s the harm from CSeries?
With the market already having voted with its checkbook on the MAX 7 for larger MAX airplanes, it’s difficult to make a case Boeing that the MAX 7 is harmed by the CS300.
With the CS500 being little more than a fanciful Internet wish, an airplane that doesn’t exist, where’s the harm?
This is where very objective observer and nearly all industry experts believe Boeing has no case.
Despite this universal, independent conclusion, it seems almost certain the DOC will conclude there is harm or a threat of harm and find for Boeing. This view is reinforced by the shocking 220% tariff the DOC levied in the subsidies case.
This is the decision expected Wednesday. If the process of the subsidies case is followed, the decision may not be made public until Thursday.
This whole debacle was framed brilliantly in a sentence on airliners .net
“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…”
This is such a great comment. And true.
I can get behind that comment. I think the DoC has lost their mind by levying a 220% tariff. It’s as if “Trump thinking” has infected their brains and they can’t think past the next freaking tweet.
Boeing can kiss the F/A-18E order to Canada good-bye, along with the foreseeable future of Air Canada orders, too. How they didn’t see this as a likely result is beyond dumb. Boeing would be wise to drop the complaint, deal with the fact that the C-Series is here to stay, they don’t have a product to compete against it, and Delta basically has kicked them to the curb anyway (what with Richard Anderson’s BS).
If Boeing thinks that “Ha! We’ll punish Delta for screwing around with us!”, that is extremely short-sighted. The DoC is being even more so, given that a substantial amount of that plane is built in the U.S.
I give up. If Boeing and the Trump-led DoC want to lead Boeing and by extension, the U.S., down the proverbial toilet, nothing I can do or say will discourage them. I’m already bent at Boeing’s lackluster (or COMPLETE LACK OF) response to Trump’s Charlottesville nonsense, anyway.
Seems to me BA just followed the old adage, “Don’t get mad, get even!” (And so, thanks to DOC, they got more than even, LOL.) And Trudeau’s probably just gonna turn the RCAF into a total Canuck national SAR force anyway. Twin Vikings and Hercs all around, eh? Then, what use would F18s be anyway, “pretty picture makers at Up North airshows?
Uh, MontanaOsprey, the CF-18s are supposed to be part of North American air defenses (against Russian bombers, which are still about).
Canada cheaps by under-spending, but was part of the F-35 group (the military probably still wants it, but financial debate and time scale of F-35 deliveries motivated it to try to fill the gap with more F-18s (I forget if they were planning to order the same as they have or the newer version).
As for airlines in Canada, there are two large ones operating A320s and 737s as well as larger airliners – Air Canada and Westjet, plus Transat operating larger airliners . Smaller ones like Porter want to move up (Porter wants to operate turbofan aircraft into Toronto Island airport, it has been cleared for London Dockyards, some smaller airlines operate older 737s sometimes for large ones like Air Transat.) Westjet has Q400s and Air Canada has various aircraft for smaller markets – will the C100 replace them? (Depends on economics and performance as many airfields are shorter though operators like Pacific Coastal may serve them – Powell River for example. WestJet has been a single-model airline like SWA, but added a smaller aircraft division, and will get larger.)
A small market in the big world, but given that Boeing scrambles for even small orders they sure are betting big that they don’t want Canadian business (and are ticking off the UK, as some Bombardier chunks are built by the old Shorts operation in Ireland).
SU-35S better suited to Canadian conditions!
Canada doesn’t like the F35 because it only has one engine. The non total war use of the plane and part of the total war use would be remote arctic patrols which would greatly benefit from redundancy. The sole reason Canada would get F35’s is because of the input into it and getting part of the production. But as a pure effort vs the Canadian air forces requirements for a plane, the F35 comes up short
None of the judges on the USITC were appointed by Trump. 3 are supposed to be democrats and 3 republicans, all were appointed by Obama
You are correct that the nominal makeup of the USITC is 3 Democrats and 3 Republicans; however, according to the excellent New York Times article that I have posted a link to below, the current makeup is two Democrats appointed by President Obama and two Republicans appointed by the 2nd President Bush. There are two vacancies, President Trump has renominated someone who was nominated by President Obama but not confirmed before Obama left office for one of the Democratic positions, this nomination has yet to be confirmed. There is also a Republican vacancy for which there is not yet a nomination. USITC commissioners serve 9 year terms and the appointment process is in many ways similar to how US Federal judges are selected. The USITC is supposed to be a quasi-judicial body, largely insulated from direct political pressure. The Commissioners are almost always very experienced trade lawyers, and not political types that are looking to run for some office after the end of their term. Typically after leaving office they might go into or back into private trade law practice, or take on a trade law professorship somewhere, or retire. I seriously doubt that any of the present commissioners, all appointed by Presidents Obama or Bush, give a damn about what President Trump thinks about anything.
As I pointed out in a message directed to Scott elsewhere in this thread, USITC’s role in CVD and dumping cases is limited to deciding whether a US industry has suffered material injury. The first decision in the Bombardier case was a preliminary decision by the USITC that there was reasonable indication that a US industry had suffered material injury. The case then went to US Commerce for preliminary and final determinations on whether prohibited subsidies or dumping were occurring, Commerce last week issued a preliminary CVD decision, and its preliminary dumping decision is due this week. The next step will be final CVD and dumping decisions by Commerce due in December of this year, followed by final injury determination from the USITC due in February of next year. Commerce is run by the Secretary of Commerce, who is appointed by the US president, and is not as well insulated from politics as the USITC is.
Below are some quoted from the New York Times article at the link below. Some things that liked about this article were thta I could find no factual errors about US trade laws or the roles of the various bodies involved, something that is sadly very rare, and that the reporter sought out comments from people who actually knew what t were talking about when it came to trade laws, such as former USITC commissioners, and named most of his sources I believe that the New York Times employs professional editors, who do fact checking before an article is published, This as apparently a standard that is too high for many aviation websites.
“The best hope for shielding Canada’s Bombardier Inc and its CSeries jetliner customers from massive trade duties imposed by the Trump administration is a little-known commission tucked away next to an expressway in Southwest Washington, DC.”
“The ITC is normally seen as immune from political influence, with a total of six commissioners who are equally split between Democrats and Republicans. However, the panel currently has only four members, who are scrambling to cope with a bigger workload this year.”
“All the commissioners are seasoned trade lawyers appointed by former presidents Barack Obama and George W. Bush. Chair Rhonda Schmidtlein, a Democrat, and two other commissioners have experience working at the U.S. Trade Representative’s office, while Republican David Johanson was the international trade counsel with the U.S. Senate Finance Committee.
President Donald Trump has nominated Jason Kearns, a USTR veteran who is now trade counsel to Democrats on the House Ways and Means Committee, to the ITC for a term expiring in 2024, but no confirmation hearing has been scheduled yet. Kearns had been previously nominated by Obama late last year.”
Thanks AP, think this gives all of us a better insight of “who’s who in the zoo”.
Think things will start getting direction after this weeks ruling which we expect to be in favor in Boeing, the “big one” actually the Dec 2017 ruling.
End of the day airlines in the US are going to be robbed from operating the CS aircraft. More efficient domestic operations will give an airline such as DL more muscle to better compete on International routes in “the battle against the ME airlines”, European LCC’s etc.
Not sure if these guys think that far ahead?
I could have used a professional editor in my post above, but that is a standard that is too high for me, since it is not free. The paragraph before the New York Times article quotes contained more than my usual share of typos and misspellings, and should have read as follows.
Below are some quotes from the New York Times article at the link below. Some things that I liked about this article were that I could find no factual errors about US trade laws or the roles of the various bodies involved, something that is sadly very rare, and that the reporter sought out comments from people who actually knew what they were talking about when it came to trade laws, such as former USITC commissioners, and named most of his sources. I believe that the New York Times employs professional editors, who do fact checking before an article is published, This is apparently a standard that is too high for many aviation websites.
For what its worth, Dennis Devaney was nominated to the USITC late late week. Devaney was a Commissioner for an interim period back during the Steel 201 era. Devaney would fill one of the Republican slots – I believe Broadbent’s slot.
Uh, “Neutron73”, what does Charlottesville have to do with this thread?
If you are talking about the violence in demonstrations there a few weeks ago, be warned of neo-Marxist lies.
One example is covered in https://www.hermancain.com/trump-was-right-that-left-wing-protesters.
Trump can be a shallow loudmouth who panders to union workers, but he is not what you think. (Interesting that Saudi Arabia will now allow women to drive, in the same year that Mrs. Trump and daughter Trump were there, the same year that Air Force Flight One flew directly from Saudi Arabia to Israel where women are freed (one was even PM) – a route people claim is verboten.)
“Bombardier offers the directly competitive CS300, for which Boeing has options.”
That should probably say “Delta” instead of Boeing, no?
Or Scott might mean that – in the CS300 category – Boeing provides potential customers with an option, an alternative offering, yes?
It is not true, as you state that on Wednesday the “US Department of Commerce makes its decision whether Boeing suffered harm, or there is a threat of harm, in the CS100 order by Delta Air Lines.”
First, the scope of the investigation is not the “CS1oo order by Delta Airlines, the scope is, at least so far, 100 to 150 seat large commercial aircraft from Canada. This means that the competition at United Airlines between the 737-700 and Cs100 falls within the scope of the investigation, as do any prices that Delta may have locked in for Cs300 purchase options. How is it possible for their have been a completion between the CS100 and 737-700 at United Airlines if the CS100 and 737-700 do not compete with each other?
Second, Commerce’s role is limited to evaluating whether dumping or prohibited subsidies are occurring, and if so, the what the dumping margin and/or value of the prohibited subsides are, and what the appropriate duty levels would be for the dumping margin and/or prohibited subsidy values that they have found. USITC is a quasi-judicial body that is not part of the Commerce Department, and USITC, and only USITC, rules on the issue of whether there has been material injury to a US industry. It is possible for Commerce to determine that dumping is occurring, but for there to be no final duty order because USITC finds that there has been no material injury to US industry. Confusingly, USITA, a Commerce Agency that does the subsidy and margin evaluations, is a completely different entity than USITC, which is not part of Commerce and determines injury. See the excerpt below from an Import Injury FAQ on the USITC webpage.
“What are the roles of Commerce and USITC during antidumping and countervailing duty investigations?
Commerce determines whether the alleged dumping or subsidizing is occurring, and if so, the margin of dumping or amount of subsidy.
The USITC determines whether the U.S. industry is materially injured or threatened with material injury by reason of the imports under investigation.
If both Commerce and the USITC reach affirmative final determinations on their individual questions, then Commerce will issue an antidumping duty order to offset the dumping or a countervailing duty order to offset the subsidy.”
The full FAQ may be found at the following link.
The following excerpt from the USITC website describes the final investigation phase, which is triggered by a preliminary or final CVD or dumping determination by Commerce/USITA. The decision due this week is Commerce/USITA’s preliminary dumping determination. Commerce/ USITA’s final determinations are due 12-18-17.
“When: After a preliminary affirmative determination by the Secretary of Commerce (or after a final affirmative determination if the preliminary determination was negative) that imported products are being, or are likely to be, sold at less than fair value or are subsidized, the USITC conducts the final phase of the injury investigation.
Duration: The USITC final phase injury investigation usually must be completed within 120 days after an affirmative preliminary determination by the Secretary of Commerce or within 45 days after an affirmative final determination by the Secretary of Commerce, whichever is later. However, in cases in which the Commerce preliminary determination is negative but the Commerce final determination is affirmative, then the USITC final injury determination must be made within 75 days.
Finding: The USITC determines (1) whether an industry in the United States is materially injured or threatened with material injury, or (2) whether the establishment of an industry in the United States is materially retarded, by reason of imports that the Department of Commerce has determined to be sold in the United States at less than fair value or subsidized.
If the USITC determination is affirmative, the Secretary of Commerce issues an antidumping order (in a dumping investigation) or a countervailing duty order (in a subsidy investigation), which is enforced by the U.S. Customs Service. If the USITC determination is negative, no antidumping duty or countervailing duty orders will be issued. If the USITC makes a finding of negligibility, the investigation regarding those imports will be terminated.
USITC determinations may be appealed to the U.S. Court of International Trade in New York City, or, in cases involving Canada and/or Mexico, to a binational panel under the auspices of the North American Free Trade Agreement. (For further information on antidumping investigations, see section 731 et seq. of the Tariff Act of 1930, 19 U.S.C. 1673 et seq. For further information on countervailing duty investigations, see section 701 et seq. of the Tariff Act of 1930, 19 U.S.C. 1671 et seq.)”
The above quote is from the following link.
Robert, are you one of the lawyers acting on behalf of Boeing?
More precisely, Robert Novick, who has cited Leeham within:
Hello Lord Vader,
If this were the old US TV Game Show “Whats My Line”, you just got stumped big time. I’ve worked as medical physicist for the past 22 years, before that my jobs were amusement park fast food worker, gift shop salesperson, teaching assistant, summer park ranger, teaching assistant and ambulance driver. The park ranger job required knowing how to read laws and regulations, as does the medical physics job. The medical physics job is mostly clinical service for patients undergoing cancer treatment but also requires some familiarity with business law when dealing with contracts for multi-million dollar equipment purchases and corporate office types in large hospital chains. Attention to detail and fact/data verification is also very important in the medical physics job, patients do not respond well to having radiosurgery done on the left side of their brain when their tumor was on the right side of their brain.
Then you just the guy we need, organize brain transplants for some of those Feds.
How is it possible for there to have been a competition between CS 100 and 737/700 at United? Because there wasn’t one. It was a fake.
@AP, you know as well as I do the headlines will be “Commerce finds,” “Commerce decides,” etc.
I agree with you that the decision in the case due this week will be from the Commerce Department, and thus an accurate headline might state “Commerce finds” or “Commerce decides”. Where I disagree with you is that this decision will have anything to do with “whether Boeing suffered harm, or there is a threat of harm”, as you stated in your post.
Here again is an excerpt that I cited in my post above from an import injury FAQ on the USITC webpage. Do you disagree that this clearly indicates that import injury determination is the sole province of the USITC, and thus will not be and cannot be part of any decision issued by Commerce this week or at any other time?
“What are the roles of Commerce and USITC during antidumping and countervailing duty investigations?
Commerce determines whether the alleged dumping or subsidizing is occurring, and if so, the margin of dumping or amount of subsidy.
The USITC determines whether the U.S. industry is materially injured or threatened with material injury by reason of the imports under investigation.
If both Commerce and the USITC reach affirmative final determinations on their individual questions, then Commerce will issue an antidumping duty order to offset the dumping or a countervailing duty order to offset the subsidy.”
The USITC final injury determination starts if Commerce reaches an affirmative preliminary determination. i.e is just now starting for the CVD case. Here is another quote from my post above (see the original post for the source of the quote).
“After a preliminary affirmative determination by the Secretary of Commerce (or after a final affirmative determination if the preliminary determination was negative) that imported products are being, or are likely to be, sold at less than fair value or are subsidized, the USITC conducts the final phase of the injury investigation.
Duration: The USITC final phase injury investigation usually must be completed within 120 days after an affirmative preliminary determination by the Secretary of Commerce or within 45 days after an affirmative final determination by the Secretary of Commerce, whichever is later. “
If this all goes the way it looks at the moment the US Airline industry will suffer the biggest injuries here.
Commerce is going to align the AD and CVD finals – the question is whether anyone (i.e., Bombardier) has asked that the final be postponed. I’ve not checked the docket. Bombardier has the right to do so under the regs…. That would push the final out an additional 60 days.
If DAL cancels the CS100 order next week what will happen?
Will the case be closed or stay open?
An interesting question……That one is worth pondering a bit….
I’m glad we’re bringing up the United 737-700 deal here. Because it’s a great case for many reasons:
– Boeing, again, went to unbelievable low prices (22M per 737-700) to counter the CSeries. Boeing openly admitted to that: they were BLOCKING the CSeries (yes, that’s legal, as long as you sell above the cost, which Boeing never does when they need to go there, like pretty much all 787s sold to AirCanada).
– In the end, United had “buyer’s remorse”. Sure, they got a crazy low price. But when truly looking at the numbers over time, that plane still didn’t make sense. United DID NOT WANT IT. And they DID NOT FOLLOW through with that order. They switched to larger 737-800 or higher.
– United and Boeing are both in Chicago. They can have a starbucks in the morning, go for lunch, etc. This is Stockholm Syndrome times a million.
– If Boeing could NOT convince United to take the 737-700 at a price lower that the cost of its parts (or even lower than just the engines?), then WHO can they convince?? WHO will buy that plane other than companies that already have tons of them [Southwest and WestJet] and need a couple for “hot and high” capability. NO ONE WANTS THE 737-700, that IS the answer. It’s gone. Even the 737-7MAX had to be changed to a 737-7.5Max to add 12 more seats to make it kinda/sorta interesting for some (fleet commonality and such). But NOTHING from Boeing is economically viable at the CS100/CS300 size. They could not even sell it to the people they sleep at night with (under that same city, ehehe).
Now, about that 22M per plane. Which, to me, looks pretty darn close to being lower than the sum of the parts. No wonder chop shops are now starting to “chop up” 10 year old 320s and 737s. When prices go that low, the plane is worth more in parts then flying. Crazy eh? So, take away Boeing and Airbus’ accounting tricks, what does that tell us about their pricing and accounting. Something is fishy, right?
Now tell me who’s fault all of this is. Who is causing prices to go to crazy low levels. What prices was Bombardier FORCED to offer Delta to be able to win even just one sale? Because we all saw the 22M per plane at United.
In this case, it wasn’t “Bombardier was going to kill Boeing”. In this case it was Boeing with its boot on Bombardier’s throat, pushing really hard to go for the kill. Bombardier needed just one sale and went all out to survive based on actions from Boeing. Boeing squeezed bombardier so low and then “hey, I have an idea, now that we’ve reached this low point, let’s make it so that it’s their fault, THEY Crossed the line”. Yeah…
Finally, as for imminent threat. Even for next 5 years; supposed Bombardier finds another 500M to a billion under a rock, what would they do with that. First, they would complete building the Final Assembly of CS100 and CS300 because, if you google a little, you’ll see that the factory is only half built and Bombardier is struggling to even build 30 planes per year. They are putting them outside, in other CRJ hangars and whatnot. They need to find money just to meet the 100 CSeries per year. Maybe in 3 years they will reach that. And then they need to build lots of them to get their money back, maybe 900 total. They’ll reach that, in what, 8 years if they don’t misstep anywhere along the way? 9 years out.
And the only way the CS500 ever makes it into reality is IF Bombardier can first build that factory (only half built now compared to the initial plan for 110 CSeries per year). And that assembly line would be ok for CS100/CS300 planned production. There is NO space to add a CS500.
Well, there is one way the CS500 could become reality. If Boeing pushes Bombardier to death and then they sell the program to the Chinese. And they wouldn’t screw around, THEY have the money for 10 assembly lines and THEY would get the CS500 and CS700 out asap. And THEY would sell CSeries at prices to kill pretty much any competition. But you and I hope that doesn’t happy. Boeing? I’m not sure they can see the results of their actions.
Also remember, people keep saying: they’ll stretch. Yeah, but you can’t stretch a 5 seat abreast plane that much. Maybe they could reach 190 seats with 2 stretches. But that too would become uneconomical. That argument (the stretches) has been put to rest by Leeham or AirInisght recently (I can’t remember which did that piece). But, yeah, in 10 years, Boeing will likely have its new single-aisle. So Bombardier has maybe 10 years to try and sell some planes. And Boeing thinks their livelyhood is at risk.
Just check the debt on Bombardier. There is no way they can start working on a middle of the market 757-type plane in 10 years. This is NOT Airbus. Canada is 35M people, we are NOT France and Germany (close to 200M people). There’s just so much we can do. Unemployment in QC is at low 5% and same in Canada. Where would we find all these employees to take on Airbus and Boeing??? This makes no sense.
I just hope Boeing doesn’t force us to fold and give it all to China. Because China already bid on the train side for 7B. And I’m sure they’d love to start cranking out planes sooner than the C919 and C929.
Canada still has a lot to give to the shared North-American aerospace industry. And 55% of the plane is sourced in the US which benefits Boeing and others. Competition IS good. Anyway, I hope you don’t squash Canada’s humble contributions to aerospace because we’d both lose.
You already answered your own questions. Trump & Boeing has analyzed their own situation and acted, you cannot dictate for them how to see their own interests, time for Canada & Bombardier to act on their own situation.
And, oh, if it were me, I would go and do the deal that needs to be done so that we remain in business and share prosperity with someone who is willing to share with us, it’s a big world out there, and there are other markets apart from USA.
I would not dilly dally hoping for the North American big brother hug, until you actually go out of business and make a fire sale. Boeing too, would be happy to buy a failed Bombardier off for a song, so maybe you do remain in the North America brotherhood, but as the poor cousins.
I’d rather be poor and keep my dignity, yes 🙂
And I wouldn’t call it a brotherhood anymore.
I’m not a lawyer but the United 737-700 deal seems pretty close to Entrapment by Boeing+USITC. Do an insane deal with United at 22M per plane (which must be pretty close or below cost). Then Bombardier, pushed to the brink, has to go lower and price it below cost (something that Boeing does and was clearly demonstrated many times). And when that happens, boom, go for the courts.
And United never wanted these planes in the end, they are not going to take delivery of them. Not even at 22M per plane. So, was this to trigger Bombardier? Was United even interested in these planes? Or were they planning to go for the 737-800 or -8Max but Boeing used United to claim a victory over the CSeries? Deal a blow and then switch to the -800? And it forces Bombardier to go even lower to win anything. You corner someone that way into doing something they really don’t want to do.
Isn’t entrapment illegal in many states? Anyway, legal or not, that’s how it feels to me. Force someone to do something they would never do otherwise.
And that is what is going to happen to Delta if they forced not to take the CS100’s due to absurd tariffs.
Maybe AA and United’s CEO’s had a chat with Muilenburg. Stop DL buying CS’s its going to kill us, then we will buy more Boeing from you, like 100 MoM’s each.
The reason Boeing had to go so low on the price at United, was the TCO of the 737-700 and its residual value would be appalling in comparison to the CS100. It was not an apples to apple competition. Even still United never had any intention to take delivery of those planes. They just baited a strategic supplier into undermining its entire price structure. Now United knows Boeings costs, and with a reasonable certainty they know Boeings bottom line on 737 deals. That Boeing chose to reveal this to the world is their mistake
Extremely salient point
I agree with Robert’s assessment. Leeham does not have its facts straight. DOC does not make any determination as to harm. That is up to the USITC.
Leeham also fails to note that the scope of the investigation is 100 to 150 seat aircraft, not 100 to 125 or 100 to 110. The failure to appreciate that distinction is pretty major.
My questions is why does it include aircraft with 100 – 125 seats? Boeing has nothing to offer with <125 seats or are they also protecting the Embraer's E series aircraft?
You’d have to ask that of Boeing’s counsel.
The US “Big 3” airlines went to the White House looking for measures against the ME airlines.
And to who will Boeing delivers the 1st 777X as part of a $76 Billion order?
Emirates. The DAL order at $40M/aircraft would only have been $3 Billion, threatening Boeing!
Wish we could swear on this site!!!!
Maybe Mr.T should stop Boeing from selling aircraft to the ME airlines that could threaten the future of US airlines???
Thanks AP, realisticly we know the ruling will be in favor of Boeing.
Tariffs will be so high that it won’t make economic sense to buy CS1/3’s.
Next in line will be Airbus….
….and Boeing will have its monopoly in the US.
Ah, but airbus has an assembly plant in the US. This seems to be only way out of the trap set by. Surely Boeing must have thought of that?
They will could go the CVD route?
Remember, Toulouse airport belongs 60% to the French Government, etc….
While we talking shoes, on the other foot, wonder how many Boeing employees worked at NASA tapping into knowledge from billions of $ of US Government funded research.
Anton: It would be appreciated if we kept the apples in one bin and the oranges in another.
NASA has released its research to all parties including European (Chinese and Russian for all I know)
The EU has programs the same as NASA. I don’t know if they put their material into public domain.
Appreciate that Transworld, in short background to my comment.
I cut my teeth in a parastatal doing post-grad research (could call it the NASA of metallurgy). There were 3 levels of programs, 100% Government (released after completion, except if strategic), 50% Government (released 5 years after completion), and 100% private funding (remains property of sponsor).
But in the real world the private sponsor company gets a bargain of over 50 years knowledge that’s not nearly reflected in his project cost, in our case 800 Engineers and Scientists had more than 15 000 years of research knowledge.
I don’t think the Europeans release their information to the world like we do in the U.S. with NASA. I found it nigh on grating when I hear folks (mostly European) say “Boeing got illegal subsidies because they had access to NASA research” when they damn well know(knew) that they (Europeans) have benefitted from the very same American taxpayer funded and bought research.
It’s kind of funny that Airbus could get away with that. Because all parts comes from planes/boats and they just assemble it in the USA. And that’s how they get away with it. All the profit in making up these parts is lost to the USA (sure, there’s still an amount of parts from the USA). And Bombardier is the reverse, it sources MOST of the plane parts from the USA [including the ONLY plane made in North-America to source Pratt&Whitney’s awesome Geared Turbo Fan] and only assembles it in Canada. Yet, that’s worse… It’d be interesting to calculate the REAL economic impact on the USA of each CS100/CS300 vs each A320/A321 sold. I’d bet it’s pretty close OR that Bombardier’s planes contribute more to the US economy than the Airbus planes…
“Preposterous” isn’t really a valid take down argument in scope of MAGA.
We’ll see more of a brute force approach in “competing” via table leveling ( up to 90° askew in a select direction. 😉 from now on.
blowback in the future will be a nice n fresh wind.:-)
Maybe, just maybe, the whole goal of this complaint from Boeing’s perspective is to eliminate/postphone the launch of the CS500 in the 2020-2027 time frame.
If so, all the emotional hyperbole and amateur legal reasoning/business analysis probably could be set aside, as the business goal will be realized unless this is swiftly reversed. If Boeing gets the NSA into at least powerpoint presentations toward the late 2020’s it can freeze out any CS500 window with it’s key customers (globally).
Boeing is going to have to do something well before that. Kodak, Nokia,etc.
Lets say the total tariff is going to be 300%. Maybe DL is prepared to pay $80M for an CS, but BBD will still stay in the some financial squeeze as $60M will go to the US Government ($4.5 Billion).
With $4.5 Billion you can buy 20 A350-1000’s at discounted prices?
I would assume, that Delta pushes the CSeries deal to one of their foreign partners. I can’t imagine them to pay that much.
Air France operates A320 family and KLM 737’s aircraft, neither has NEO’s or MAX’es on order, which is a bit unusual in itself.
Transavia KLM and France are only operating 737’s, again none of these have new aircraft on order.
Something will have to happen with their single aisle fleets at some stage. The CS300 most likely have bigger application but the CS100’s could replace A318’s of Air France and some of KLM’s Cityhopper E175/190’s?
Maybe we should get the “Greenies” on this one.
What will the CO2 emission per seat mile of an CS100 be vs that of a 737-700?
America first, lower the Carbon footprint, fly CS!
As I said before, Boeing can sell a 777-300ER for $120million to United and others, 38% of list price, but if Bombardier do it then it’s dumping. Not a level playing field, me thinks
Having read the ‘memo’, it appears the US government thinks the CS series will never make a profit. So by definition the Canadian government is providing a ‘subsidy’ because the Canadian government will never get its money back. This then leads to the allegation of ‘dumping’. That is, the allegation of ‘dumping’ is valid because of the ‘subsidy’. But how does the US government know the CS series will never make a profit, which means how does the US government know that the Canadian government won’t get its money back? Well Boeing told the US government that the CS series won’t make a profit and the US government agreed. So it must be true.
The 787 hasn’t made a profit. Moreover, Boeing have already taken a charge on early 787s and have also ‘dumped’ the first 500 at below cost. Will Boeing pay back the ‘subsidies’ that it and the US government insists it does not receive? No, but Boeing doesn’t receive ‘subsidies’ and the US government agrees that Boeing doesn’t recieve ‘subsidies’. So it must be true.
Boeing most certainly dumped 787s into the European market. We can clearly see the harm they caused Airbus. Firstly the A340 is dead, secondly profits on A330 are much smaller then they should have been, thirdly, Airbus was forced to spend billions on the A350 program and finally Airbus was forced to spend more billions on A330 NEO. If Boeing had even sold the 787 at cost it would probably have less then 3-400 orders.
And is working for Mr Muilenburg’s back pocket.
Mark: While I agree on Boeing practices it was the 777 that killed the A340 not the 787.
Of course that was in the day before massive Boeing bailouts.
Shareholders should sue Boeing because the profit on which these bonuses are being issued can be construed as fraudulent. Where is the money Mr. Muilenberg?….I mean the 28B …or -(-28B) more accurately.
Mark are you saying Boeing sold 787s for less in Europe than they sold domestically?
So if AB sells one 359 to Iberia for $50M its fine if they sell 20 to AA at $75 a piece?
I think the point is that Boeing has been selling 787’s outside the US below cost?
No Anton that would be dumping, selling items in foreign markets for less than they are sold domestically.Production price doesn’t matter, they could sell them below cost if they offered the same deal domestically.
Is it possible for BBD to avoid the tariff if they set up a completion center in Wichita? The plane can be flown there as goods in process, have the interior fitted, delivery flights and delivered in Wichita. Since the current Cseries has about 52% US content already, this will probably increase it to 60%. Hard to say its not a US manufactured plane no?
The dumping decision of tomorrow maybe, but I doubt the CVD tariff as far as I can make out? AP-R’s field.
I am very far from the legal profession but need to deal with related things every day, but not the US law, which sometimes make me think of a Poker game with “local rules”.
Interesting thought „mark from toronto”.
Bombardier is already in Wichita in the form of Learjet and flight test centres there or to the south, and a well-connected Canadian financial outfit is already in Wichita building nose sections of 737s and 787s (Spirit Aerospace, perversely a former Boeing operation there).
Regarding – “Is it possible for BBD to avoid the tariff if they set up a completion center in Wichita? The plane can be flown there as goods in process, have the interior fitted, delivery flights and delivered in Wichita. ”
I doubt this would work, since the scope clauses in all federal register notices in the case so far have included partially assembled aircraft. My guess would be that although there would be some level of assembly in the US that would qualify US assembled C Series aircraft to be “not from Canada”, aircraft that were sufficiently completed in Canada to be flown into the US would be declared to fall within the scope statements that have been published so far. Below is an excerpt from the scope statement in the Federal Register notice for the preliminary CVD determination and a link t0 the full document.
“The scope includes all aircraft covered by the description above, regardless of whether they enter the United States fully or partially assembled, and regardless of whether, at the time of entry into the United States, they are approved for use by the FAA.”
This document also contains the following quote. Might a scope revision be coming in the preliminary dumping determination?
“In accordance with the preamble to the Department’s regulations, the Initiation Notice set aside a period of time for parties to raise issues regarding product coverage, (i.e., scope). Certain interested parties commented on the scope of the investigation as it appeared in the Initiation Notice. The Department intends to issue its preliminary decision regarding comments concerning the scope of the antidumping duty (AD) and countervailing duty (CVD) investigations in the preliminary determination of the companion AD investigation.”
As the scope presently stands, note that the title of the document starts with “100 to 150 Seat Large Civil Aircraft From Canada”, rather than “The Sale of the CS 1oo to Delta”.
Not only local rules, ones that change depending on if the bus is late or the moon is full.
I don’t think this is like the CV880 that goes away. The CS is a good platform, Airbus and Boeing have to build their next single aisle in the 738 to A321 range. They can’t build the wing and engine combo light and small enough to compete with the CS.
Except for possible large sales of the MAX7 to Southwest, the CS will eventually be the optimal platform for 150 seats.
Boeing can keep the CS500 out of the hands of JetBlue, if that’s what makes them happy, but they can’t scuttle a quality multi-billion dollar investment in a global economy. Somebody will see a good buy and exploit the value, be that Airbus or China.
Just fitting my comment in somewhere here: Did not Airbus literally give the A300, maybe about 10 of them, to Eastern Airlines just to get them into revenue generating service? 1985?
No not literally, but I think EAL leased four aircraft in about 1977 that they subsequently bought, followed by about 30 others.
From the wiki…
“Aviation author John Bowen alleged that various concessions, such as loan guarantees from European governments and compensation payments, were a factor in the decision as well.”
..and The US government paid for the development of the JD series engines in the 60’s that was the start of the Boeing commercial jet era?
The AUL of any “subsidy” related to that has long, long since passed.
BBD is making a loos of between $50M and 300M per Quarter. This is not sustainable without intervention.
Stop the bleeding, someone must take over the CS program asap. before its to late.
@Geo: 16 subsidies, tax breaks, land use agreements, etc., were involved, including launch aid by the UK, Quebec Province, Canada and more. The only European government involved is the UK.
When Air Canada was bankrupt, Boeing sold them a new 787/777 fleet and offered to take in the Airbus fleet if needed. R Milton fixed it.
Here we are going on but Westjet has outstanding orders for 60 Boeing’s and no CS orders, probably know they got them for near production cost prices?
So Boeing killing the CS in Canada itself.
The Max7 ordered by WS does compete directly with the CS3 by all technically logical metrics….
1. Has Boeing dumped Max7 into Canadian mkt by selling @ below cost?(Most likely)
2. Will Canada/BBD take anti-dumping action against a foreign producer(i.e. Boeing)?
3. Is the Canadian gov’t willing to hurt a domestic carrier(i.e. WS) indirectly via anti-dumping tariff like the U.S. gov’t willingly did so to DL?
Don’t think the Canadian Government should do that.
The PM should talk to the airlines and say no more Boeing’s as long as the CS’s are hit with these massif tariffs. Encourage WJ to replace 737-700’s with CS300’s in future.
… also no more military aircraft from Boeing.
The Canadian legislation should pass a law that specifically requires the producer to pay for import duties. So it would hurt Boeing and not the local airline.
But of course it won’t happen.
The penalty rates are stupid.
Canada imposed 276% on drywall sheet for buildings, then decided to reimburse people rebuilding burned out housing in Fort McMurray AB. (Last summers fire disaster, this summer in Canada was the Caribou region of B.C.) Of course individual owners outside disaster areas won/’t be helped.
Yes, it will be known in the coming days if Bombardier will have to review its strategy in US territory. If there is a review, we can expect surprises from Bombardier. In the single-aisle sector, the company will certainly leave the United States for a forthcoming presidential election. In the meantime, the Canadian compagny will find her trojan horse. Indeed, remember, the CEO of Bombardier has always said that there was a third player missing in the CSeries limited partnership. It would be a great opportunity to look for a rich investor ready to launch an expanded range of CSeries. Imagine the funny head of the Boeing executives, compelled to compete with the CS500 and CS700, naturally offered with CS100 and CS300. One might also think that the leaders of the American airlines are going to make a lot of noise with the senators to be able to buy these 150-180 seats, economical, of great comfort, and so on. In short, the conjuncture that announces an end of life is often the mother of invention …
Mother of invention…..
+3rd party +CS700 + aisle +2 seats,
…..and you have Boeing busted?
Captain Scarlet, I think I just inferred who you are on twitter because of the typo you keep making on “compagny”, ehehe. Sorry, off topic…
Yes, the A320/737 are ripe for the taking. A couple of dinasaurs thst are selling because there isn’t competition!
Here’s a wild theory: Boeing needs to design a successor to the 737. It has taken huge financial hits from the 787, 748 and and KC-46, but also has to find money for the MOM airliner. So it puts Bombardier out of business, buys the C Series design cheap and voila, a new family of smaller airliners is ready to roll years before Airbus can put out an A320 successor.
@colin you think canada woudn’t block the transaction ? You know how happy the gouverment of canada and Quebec are with boeing right now ? You can’t do a hostile takeover because the bombardier/Beaudoin own the majority of voting Stock for the cseries or the bombardier cie.Maybe if Boeing offered 3 trillions us dollars. you know something that garanties that Boeing goes bankrupt the very next day ? Maybe then……
Wasn’t the C-Series ( as a project change of ownership or as partner ) “offered” to Airbus/Boeing (and declined) before the GoC intervened with an infusion to BBD ?
I can see UTC purchasing the Quebec stake in Cseries and providing capital. UTCs content in Cseries is massive and frankly, the most major delays were due to their FBW and engines. They kinda “owe” BBD and it is strongly in their interest to increase sales of their engines. They are shut out of the 737 market so they may as well ride the Cseries horse where they have an exclusive deal. If the provincial money in BBD is replaced by private sector money, and Quebec and the Feds in turn make that investment in P&W Canada the us trade complaint will have little grounds to stand on.
@Mark from Toronto:
“I can see UTC purchasing the Quebec stake in Cseries and providing capital.”
Initially, I dismissed yr speculation per above as unrealistic. After some thoughts in the bigger picture of what has been happening recently in terms of big strategic shifts by Boeing and UTC in the aerospace mkt as reported by leehamnews.com earlier, I no longer think your speculation is so far fetched:
1. Per recent Boeing longterm strategic review, they’ve clearly started to position themselves to branch out more into areas as below for better margin/RoI/growth than their traditional airframe building biz=
A) Maintenance & Services
The recent formation of BGS(Boeing Global Services) thru basically merging their current, much weaker maintenance & service divisions is a great example.
B) Integrated avionics & aircraft systems
I read fm somewhere recently that Boeing wants to do far more biz in these areas in the future.
Both A) & B) are classic bread & butter(and highly profitable) territories for UTC Aerospace/P&W.
2. UTC has been acquiring large, critical/key pieces in the civil aerospace supply chain. 2 examples=
Among the global top 3 players in landing gear systems, FADECs, engine nacelle, etc.
B) Rockwell Collins
Long time global dominator in the avionics/cockpit control system biz. Also a significant player in IFE systems.
Basically, products designed, developed & manufactured by UTC already or will represent a huge % in the supply chain of any Airbus, Boeing, EMB E2Jet and of course, BBD CSeries. Just about the only key capabilities still beyond the reach of UTC to build a whole narrowbody airliner are airframe design & development(i.e. the shell structure & the airfoils), integration, final assembly and test & cert……exactly the only real aerospace capabilities held by BBD.
In essence, the trend is Boeing will be moving more ‘upstream’ into UTC’s traditional space while UTC will be moving more ‘downstream’ into Boeing’s traditional space.
Of course, there’re 2 huge hurdles for the idea of UTC acquiring BBD Aerospace(or @ least CSeries program):
1. Mkt hurdle
Existing PW1000G partners such as Airbus, EMB, Mitsubishi and Irkust won’t be happy when their propulsion supplier indirectly becomes their competitor.
2. Legal hurdle
Anti-trust authorities worldwide won’t be thrilled with the idea of a single corp parent for almost all entities involved and vertically integrated in an airliner program fm overall design to parts production to cert to life time maintenance….
That’s a really good idea. UTC buying the CSeries. They too could start cranking them out much faster. I think a lot of airlines are on the sidelines waiting to see IF Bombardier can deliver them in time. They like the product. They just don’t want to buy something they’re not sure WHEN they’ll get it. Yep, UTC, good one. This is a Merges&Acquisitions play that could yield a LOT of money. And could catch Boeing with its pants down.
Perhaps someone with an Airsight premium subscription could summarise their latest article. 777x launch pricing would be interesting, particularly Lufthansa, which is obviously in airbuses home market and probably includes all sorts of maintenance deals in addition to the purely cash numbers.
In all he tens of thousands of words I’ve seen written on this, I don’t believe that anyone yet has pointed out that the TOC thinking in this matter is at least 400 years old and probably a great deal older than that.
Brutus’s self-persuasion as to the necessity to assassinate Caesar:
‘It must be by his death: and for my part,
I know no personal cause to spurn at him,
But for the general. He would be crown’d:
How that might change his nature, there’s the question.
It is the bright day that brings forth the adder;
And that craves wary walking. Crown him?–that;–
And then, I grant, we put a sting in him,
That at his will he may do danger with.
The abuse of greatness is, when it disjoins
Remorse from power: and, to speak truth of Caesar,
I have not known when his affections sway’d
More than his reason. But ’tis a common proof,
That lowliness is young ambition’s ladder,
Whereto the climber-upward turns his face;
But when he once attains the upmost round.
He then unto the ladder turns his back,
Looks in the clouds, scorning the base degrees
By which he did ascend. So Caesar may.
Then, lest he may, prevent. And, since the quarrel
Will bear no colour for the thing he is,
Fashion it thus; that what he is, augmented,
Would run to these and these extremities:
And therefore think him as a serpent’s egg
Which, hatch’d, would, as his kind, grow mischievous,
And kill him in the shell’.
Today is signature date and we won’t get the published release until tomorrow.
My bet is that Commerce bases its margin on the petition rate given that BBD has refused to cooperate with Commerce. BBD refused to pony up a questionnaire response.
Boeing’s stand in the exhibition hall is next to Emirates for Dubai 2017, at the main entrance.
Big Emirates order for Boeing coming? Hope the US is waking up to this circus?
How long before Boeing puts up an assembly plant in Dubai?
PB: “And the only way the CS500 ever makes it into reality is IF Bombardier can first build that factory (only half built now compared to the initial plan for 110 CSeries per year). And that assembly line would be ok for CS100/CS300 planned production. There is NO space to add a CS500.”
The new final assembly building can take the CS100, CS300 and CS500 as well. All positions are interchangeable between the three variants. However the existing paint shop cannot accommodate the CS500 and a new one would need to be built.
And production capacity is not 110 C Series a year (when completed) but between 140 and 150 a year, as per Fred Cromer.
PB: “THEY have the money for 10 assembly lines and THEY would get the CS500 and CS700 out asap.”
Yes the Chinese have the money for that, but not the skilled manpower. They already have great difficulties producing the fuselage sections for the C Series, and because of that production of the centre fuselage, centre wing box and tail cone have all been moved back internally to Bombardier’s Belfast facility, except perhaps for the tail cone (I don’t know where it is manufactured today).
This being rectified, I do agree with everything else you said in your post and others as well.
Thanks for the corrections. But isn’t that 120-150 per year IF the 2nd half of the final assembly buildy (FAL) is built? I’m referring to the info from Sylvain Faust talking about Mirable bursting at the seams already?
I assume that they would have to build on that planned full FAL (half missing now). Plus a new paint hangar that you mention. That’s a LOT of money that Bombardier doesn’t have now. They’ll be happy just to start cranking out more CS100/CS300. They’ve said all along they were not focusing on a CS500 for now. And I thought it was just strategic talk. Of course, they have looked at it on paper. But now I believe them that there is not way they can add a CS500 if Bombardier stays the way it is. Too much debt, not way to raise more money = no way they’ll complicate things more with a CS500. Maybe if they’re are pushed to the wall and run out of orders and someone says “we’ll buy 100 if you start on the CS500 or CS300 w same wings but stretched = lower range, more seats. Maybe then.
Other than that, like I said, the only way I can imagine the CS500 appearing is if Bombardier is forced to sell to someone with lots of $ (like China for example). In that case, yes, FAL2, FAL3, FAL4 will all come online and Boeing will THEN have to worry about things. But that can only happen if Boeing continues down its path. Which, every day that passes is more likely to happen. We’ll see.
Good point about skilled employees and fuselage sections (I think it was AVIC). We can’t underestimate the availability of skilled worked in aerospace clusters. Whether Montreal or Belfast. I sure hope UK and Canada wake up and start to do like the USA and spend their defense budgets locally. Shorts in Belfast has a lot of history and it’s a waste that they only build wings and such. There is so much potential. Same in Canada, we’re doubling our defense spending, why not go for a moonshot project. Why do we have to buy F18 super obsoletes or F35 barely flyings… Like someone said, it’s time to think for ourselves first if that’s the new reality, then so be it.
PB: “But isn’t that 120-150 per year IF the 2nd half of the final assembly buildy (FAL) is built?”
That is what “when completed” meant in my comment.
PB: “I’m referring to the info from Sylvain Faust talking about Mirable bursting at the seams already?”
I am the author of that article you are referring to. Please click on my name above this reply and see for yourself.
PB: “I assume that they would have to build on that planned full FAL (half missing now). Plus a new paint hangar that you mention.”
They also need to build a store for the C Series parts. The secondary assembly line, the new paint shop and the store were all supposed to be built in 2013 at the same time as the initial assembly building was built.
PB: “Good point about skilled employees and fuselage sections (I think it was AVIC).”
It is actually a subsidiary of AVIC called Shenyang Aircraft Corporation (SAC).
Discord in the rebel alliance against the evil empire? Some quotes from the Bloomberg article at the link below. Based on unnamed sources, so one has to be careful about fully believing it all.
“The U.K. is said to see Canada as primarily responsible for the trade dispute between Boeing Co. and Bombardier Inc. because of the level of its state aid to the aerospace company.
Publicly, the British government has said that the U.S. imposition of punitive duties on Bombardier is disproportionate, and Prime Minister Theresa May even lobbied U.S. President Donald Trump unsuccessfully to try to prevent it.
Privately, it believes that Canada has overstepped the mark in aid to Bombardier, according to two officials who declined to be named while talking about an ongoing dispute. Bombardier spokesman Simon Letendre declined to comment.”
“The U.K., which is seeking post-Brexit free-trade agreements with both countries, feels it’s caught in the crossfire. While British officials think Canada has brought the dispute on itself, they don’t want Boeing’s challenge to succeed and want a resolution via diplomatic means.”
Bloomberg was able to correctly state the roles of the Commerce and the USITC, and the schedule for the remainder of the case.
“A final determination on the so-called countervailing duties is due in December. The Commerce Department is expected to decide by Wednesday whether to also impose anti-dumping duties on the C Series.
On that matter, Boeing is seeking duties of about 80 percent. The trade penalties could be reversed by the U.S. International Trade Commission if the tribunal determines that Boeing wasn’t injured by Bombardier’s jet program. That decision is expected to be made next year.”
A dumping tariff of 80% is not a killer, its the CVD tariff of 220%.
MAYBE? BBD should put the CS program up on tender. They take their 50.5% of proceedings and Government 49.5% and walk?
Newco obtained the program on 100% commercial terms and can move on with production.
If Newco wants to sell equity (to develop an CS500 for example) BBD could claw back into the program if they want with a first right of refusal.
Of the track with this one. See there will be an 787-10X at Dubai. Anyone any idea what this is?
Boeing shares trading higher. Wonder if there are any news on the dumping claim?
Maybe BBD “bit off more that they could chew” with the CS program. Technically excellent, but they could hardly make ends meet with the CRJ’s and Q400’s.
The CS program is a company maker or breaker, unfortunately they are now compromising the rest of their business and the latter more likely?
Have a look at the link and see the writing on the wall?
Has things gone quiet, no news yet?
For some reason, the decision is now to come out today instead of yesterday. No idea on the time of day but I’m guessing after the markets close.
Thanks, Boeing was also busy with other things yesterday it seems?
LOL! Yeah, sure sounds that way. Maybe the USITC should be renamed “Boeing/USITC division”. Kinda like the Boeing bank. So, they now have their bank and lawyer division 🙂 Why not I guess…
See below regarding announcement delay.
From the article at the link below, which was published at 8:41 AM ET 10-6-17.
“Bombardier will likely learn today about anti-dumping duties over its CSeries commercial jet.
The U.S. Commerce Department was expected to announce preliminary anti-dumping duties yesterday, but last night said it was holding off until today.”
Thanks AP. Can’t see anything special in the Boeing share price, down 0.3% but that following market trends.
I would think that most investors who control large amounts of investment funds have decided many months ago how they thought the Boeing Bombardier case would turn out, and how it would effect the future value of Boeing’s stock. If that is the case, then any decision announced today should little effect on Boeing’s share price today if it is the decision that most investors were expecting.
P.S. Boeing stock closed yesterday (10-5-17) at $258.89 per share, up from $159.67 on 1-3-17, a gain of 62% or $62,000 per $100,00o invested for the year to date, neglecting dividends. It would appear that stock investors collective assessment of Boeing’s future in rather different than the prevailing gloomy views in the Leeham comments section.
Bombardier stock closed yesterday at $2.19 per share, down from $2.28per share on 1-3-17, a loss of 4% or $4000 per $100,000 invested for the year to date.
Looks like the defense part of the business could also boost Boeing in future.
If Airbus don’t do a catch-up at Dubai Boeing could be on a roll. Also seems that Qatar is warming up strongly to Boeing.
Think Airbus was caught napping when they thought the 787 is going to be a failure and could get away with an A330NEO.
Don’t say the NEO is a bad aircraft but airlines don’t want it. AB should seriously think about an A350-700/800 to compete with the 787-9.
Petition rate for Bombardier….
Are you saying that US Commerce has announced that their preliminary dumping margin decision is 79.82%, or just that 79.82% is what Boeing had asked for in their petition?
Dumping margin was 79.82% – the petition rate.
What is an AFA call?
After a little internet searching I think I have figured out what “AFA call” refers to. I believe that AFA is an abbreviation for “adverse facts available”, which refer to US law that states that a party in a trade dispute cannot obtain a more favorable result by failing to cooperate than if it had cooperated fully. See the quote below, which may be found at the Court of International Trade webpage at the link following the quote.
“In conformity with the Antidumping Agreement and current practice, new section 776(b) [19 U.S.C. Section 1677e(b)] permits Commerce and the Commission to draw an adverse inference where a party has not cooperated in a proceeding. A party is uncooperative if it has not acted to the best of its ability to comply with requests for necessary information. Where a party has not cooperated, Commerce and the Commission may employ adverse inferences about the missing information to ensure that the party does not obtain a more favorable result by failing to cooperate than if it had cooperated fully. In employing adverse inferences, one factor the agencies will consider is the extent to which a party may benefit from its own lack of cooperation. Information used
to make an adverse inference may include such sources as the petition, other information placed on the record, or determinations in a prior proceeding regarding the subject merchandise. ”
Off piste: If James Brown is the former editor of WAN, would he care to communicate with a former offshore contributor… – where to find you?