Bombardier tax decision irks U.K.
U.S. backs duties of almost 220% after Boeing’s complaint
LONDON — British Prime Minister Theresa May said Wednesday she was “bitterly disappointed” with the U.S. government’s decision to place duties of almost 220 percent on Bombardier’s C series aircraft, which threatens more than 4,000 jobs in Northern Ireland.
May took to Twitter to vow she’d work with the Montreal-based company to protect jobs. The prime minister had previously lobbied President Donald Trump after U.S. aircraft maker Boeing alleged that Bombardier used unfair government subsidies to sell planes at artificially low prices.
May has a key alliance with Northern Ireland’s Democratic Unionist Party to support her minority government in Parliament.
Defense Secretary Michael Fallon warned Boeing that its behavior could jeopardize future U.K. defense contracts — though the defense ministry said existing contracts with Boeing would be honored.
“We have contracts in place with Boeing for new maritime patrol aircraft and for Apache attack helicopters and they will also be bidding for other defense work, and this kind of behavior clearly could jeopardize our future relationship with Boeing,” Fallon said.
But unions accused the prime minister of failing to protect workers. Ross Murdoch, national officer for the GMB union, said the ruling was a “hammer blow” to Belfast, where Bombardier makes aircraft wings and fuselages.
“Theresa May has been asleep at the wheel when she could and should have been fighting to protect these workers,” Murdoch said. “It’s high time she woke up.”
The U.S. Commerce Department ruled Tuesday in
favor of Boeing, saying “the subsidization of goods by foreign governments is something that the Trump Administration takes very seriously.” The department is scheduled to issue a final ruling in the case on Dec. 12.
Boeing alleges that Bombardier received at least $3
billion in subsidies from the governments of Britain, Canada and the province of Quebec, allowing it to sell planes to Delta Air Lines for less than the cost of production. The Chicago-based aircraft maker asked the Commerce Department and the U.S. International Trade Commission to investigate what it called “predatory pricing.”
Delta last year agreed to buy 75 of Bombardier’s new
CS100 aircraft, with an option for as many as 50 more. Bombardier valued the firm order at $5.6 billion based on the list price of the aircraft.
Delta says Boeing doesn’t even make the 100-seat planes it needs for short- to mediumrange trips.
Bombardier called the decision “absurd,” and accused Boeing of trying to stifle competition.
Commerce Secretary Wilbur
Ross, on a visit to Hong Kong, told reporters that part of the problem was Bombardier’s lack of cooperation with the investigation.
British Liberal Democrat leader Vince Cable urged May to stand up to the United States, as her Canadian counterpart Justin Trudeau has done. And the leader of the Democratic Unionist Party, Arlene Foster, said she would the use the party’s influence with the government
to press the issue.
“Unfortunately, it’s not a surprise,” Foster told Sky News. “What we must do now is to continue to work with our own government, with the American government, with the Canadian government, in trying to get Boeing to see sense in relation to this issue.”