Boe­ing says com­plaint aimed at pre­vent­ing larger CSeries

The Hamilton Spectator - - BUSINESS - ROSS MAROWITS

Boe­ing says its trade com­plaint against Bom­bardier is de­signed to pre­vent the Mon­treal-based ri­val from us­ing sub­si­dies to build a larger ver­sion of the CSeries plane that would di­rectly com­pete with its own flag­ship nar­row body 737 air­craft.

Last week, Boe­ing filed a doc­u­ment with the U.S. In­ter­na­tional Trade Com­mis­sion that sheds new light on the tit-for-tat dis­pute be­tween the two aerospace man­u­fac­tur­ers. In the 109-page fil­ing, Boe­ing said Bom­bardier would be po­si­tioned to build a full fleet of sin­gle-aisle planes — re­peat­ing a strat­egy em­ployed by French aerospace com­pany Air­bus — if Cana­dian sub­si­dies to Bom­bardier are left un­ad­dressed.

“The U.S. in­dus­try has been the vic­tim of this ex­act strat­egy be­fore, as sub­si­dies to Air­bus en­abled it to push McDon­nell Dou­glas and Lock­heed from the market, and cap­ture 50 per cent global market share, de­stroy­ing count­less high-pay­ing, skilled U.S. jobs in the process,” Boe­ing said.

Bom­bardier said in a sep­a­rate fil­ing that Boe­ing’s ef­fort to shut down its in­no­va­tive tech­nol­ogy from the market is “mis­guided,” adding that the com­plaint is tan­ta­mount to ask­ing the U.S. In­ter­na­tional Trade Com­mis­sion to imag­ine a hy­po­thet­i­cal world in the fu­ture. The com­pany said its CSeries com­mer­cial jet isn’t an im­mi­nent threat to Boe­ing be­cause the first planes won’t be de­liv­ered to Delta for an­other year, Boe­ing doesn’t sell a com­pa­ra­ble prod­uct and Boe­ing’s 737 pro­duc­tion is sold out for about eight years with a back­log val­ued at about US$190 bil­lion, Bom­bardier said.

Bom­bardier also re­jected Boe­ing’s claim that it is suf­fer­ing present ma­te­rial in­jury as a re­sult of Delta Air Lines’ CSeries or­der.

“If Boe­ing were cor­rect that Delta es­tab­lished mo­men­tum for Bom­bardier, and caused harm to Boe­ing, one would ex­pect to see ad­di­tional CSeries or­ders in the U.S. market, but not one has oc­curred in the 13 months since the Delta pur­chase of CS100s,” Bom­bardier said.

The dis­pute has be­come po­lit­i­cally charged, with Ot­tawa re­cently an­nounc­ing that it was re­view­ing cur­rent mil­i­tary pro­cure­ment projects with Boe­ing — a thinly veiled threat to scrap the planned pur­chase of 18 Su­per Hor­net fighter jets from the com­pany.

Boe­ing has pe­ti­tioned the U.S. Com­merce Depart­ment and the U.S. In­ter­na­tional Trade Com­mis­sion to in­ves­ti­gate sub­si­dies for Bom­bardier’s CSeries air­craft that it says have al­lowed the com­pany to ex­port planes at well be­low cost.

A pre­lim­i­nary de­ter­mi­na­tion on the pe­ti­tion is ex­pected by June 12.

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