The EU has taken Bombardier’s side. Although the UK previously weighed in with BBD because the wings are produced in Northern Ireland, the EU hadn’t become involved. Now it has, filing briefs with the US Department of Commerce.
It’s because Airbus agreed to acquire a majority stake in the C Series program.
Now Boeing faces the potential wrath of the EU in addition to Canada and the UK.
Boeing officials were prepared for reaction from Canada and the UK and the possibility of losing military sales, according to Wall Street aerospace analysts who talked with them (and who talked with LNC).
But according to an Aviation Week article, Boeing was surprised (“shocked” is how AvWeek described it) by the BBD-Airbus deal. Boeing’s focus was the prospect of Bombardier making a deal with China’s COMAC. Indications that Airbus, having rejected a deal in 2015, seemed not to have been in the picture.
The UK newspaper, The Independent, wrote, “If the EU ultimately imposes painful tariff counter-measures against Washington – or threatens them – it’s possible the US might back down.”
Canada’s Financial Post wrote, “Bombardier’s ties to Europe have strengthened in the last month since the company announced French aerospace giant Airbus SE will acquire a majority stake in the CSeries program. Part of the deal involves shifting production of U.S.-bound CSeries jets to a facility in Alabama, a move that could potentially allow Bombardier to avoid the crippling tariffs imposed by the U.S.”
Boeing sniffs at this and asserts the Mobile (AL) C Series production plant will never be built because, the company claims in a filing, it “makes no economic sense” and there isn’t sufficient market in the US to support it. In any event, Boeing claims, the mere existence the propose plant is simply to circumvent the tariffs. US law allows tariffs to be imposed for circumvention. Bombardier, Airbus and observers note that trade laws are intended to support US jobs and investments in the US, which the proposed C Series plant will do.
But Boeing may have some ‘splainin’ to do, to famously quote Ricky Ricardo in the popular 1950s TV series I Love Lucy.
In its original complaint filing April 27, Boeing in a footnote takes note of the presence of the Airbus Mobile assembly plant and acknowledges in so many words that this produces US-made airplanes.
“Boeing notes that Airbus has opened a final assembly facility in Mobile, AL, which may be used in the future to produce Aircraft in the United States. Until Airbus does so, however, it should not be treated as a domestic Aircraft producer. Accordingly, Boeing has treated scheduled Airbus deliveries of Aircraft to U.S. customers as scheduled deliveries of non-subject imports….”
By Boeing’s own reasoning, if the Airbus Mobile plant produces US-made airplanes, so will the C Series plant.
Generally, I let Reader Comments appear as they are written and without my own comment, unless there is a specific question directed to Leeham News or on a topic that I think a reply will add to the discussion.
Sometimes Readers email me directly.
This last week produced a couple of comments that just had me laughing.
In an email to me: