BOEING FACES STIFFER RIVALRY AT HOME
Complaint backfires as European firm plans 2nd line in Alabama
BOEING Co’s diminutive Canadian rival just found itself one heck of a wingman. The world’s largest aerospace company tried to block Bombardier Inc’s all-new C Series jet from the United States by complaining to the government about unfair competition. Now that move is backfiring as Boeing’s primary foe, Airbus SE, takes control of the Canadian aircraft — with plans to manufacture in Alabama.
The deal leaves Boeing’s 737, the company’s largest source of profit, to face a strengthened opponent in the market for singleaisle jetliners, where Airbus’s A320 family already enjoys a sales lead.
The European plane maker is riding to the rescue of a plane at the centre of a trade dispute that soured US relations with Canada and the United Kingdom, where the aircraft’s wings are made.
“For Boeing, its decision to wage commercial war on Bombardier has arguably had some unintended negative outcomes,” said Vertical Research Partners analyst Robert Stallard in a report.
Boeing on Tuesday held firm to its stance against the C Series, saying the deal with Airbus would have “no impact or effect on the pending proceedings at all” in the trade dispute. Boeing won a preliminary victory against Bombardier last month when the US imposed import duties of 300 per cent on the C Series.
While some manufacturing work would stay in Canada, Airbus believed it would be able to get around the tariffs by opening a second assembly line at its factory in Alabama, said strategy chief Patrick de Castelbajac.
That leaves Boeing to consider whether a competitive response is needed, such as re-evaluating its new aircraft development plans or entering its own partnership.
It could explore options with razilian plane maker Embraer, said Nicholas Heymann of William Blair & Co. The Embraer’s E2 jets are of similar size to the C Series. Bloomberg