Boeing UK contracts jeopardised over row

Thousands of jobs at risk in N. Ireland

BELFAST/LONDON, Sept 27, (RTRS): Britain told US planemaker Boeing on Wednesday that it could lose out on British defence contracts because of its dispute with Canadian rival Bombardier which has put 4,200 jobs at risk in Northern Ireland.

The US Department of Commerce on Tuesday imposed a 220-percent duty on Bombardier’s CSeries jets, whose wings are made at a plant in Belfast, following a complaint by Boeing which accuses Canada of unfairly subsidising Bombardier.

The ruling is a political headache for Britain’s minority Conservative government, which relies on support from a Northern Irish party to stay in power.

It also undermines the government’s assurances to Britons that free trade and London’s close ties with Washington will be pillars of Britain’s prosperity and global influence after it leaves the European Union in 2019.

“This is not the behaviour we expect from Boeing and it could indeed jeopardise our future relationship with them,” British Defence Secretary Michael Fallon told reporters in Belfast.

“Boeing has significant defence contracts with us and still expects to win further contracts. Boeing wants and we want a long-term partnership but that has to be two-way.”

Bombardier is the largest manufacturing employer in Northern Ireland, which is the poorest of the United Kingdom’s four parts and is mired in political difficulties after emerging from decades of armed sectarian conflict.

“Bitterly disappointed by initial Bombardier ruling,” said British Prime Minister Theresa May, who had personally asked US President Donald Trump to help resolve the dispute.

“The government will continue to work with the company to protect vital jobs for Northern Ireland,” she said on Twitter.

Boeing said in a statement it was committed to the UK, but gave no indication that it might change tack in the dispute.

“We have heard and understand the concerns from the Prime Minister and the Government about Bombardier workers in Northern Ireland,” the statement said.

Boeing said that since 2011 it had tripled its spending in the United Kingdom to 2.1 billion pounds ($2.8 billion) in 2016, while the firm and its suppliers accounted for more than 18,700 UK jobs.

The row has come at a bad time for May, who was severely weakened by her party’s poor showing in an election in June and who has been struggling to contain infighting within her top team over Brexit.

Manufacturing Northern Ireland, an industry group, said the row was an ominous sign of the difficulties Britain could face after leaving the EU.

“What we could be witnessing is the fundamental difference between being a fully-fledged member of an internal market and a junior partner in a free trade agreement,” it said.

“This does not bode well for the UK’s plan to be a leader in global free trade nor indeed ambitions of a free trade agreement with the EU which cannot match the benefit we currently enjoy as part of the EU’s Single Market.”

At the Bombardier plant in Belfast, workers were nervous about what impact the dispute could have on their livelihoods.

“Nobody knows how it will end up,” said aircraft fitter George Burnside, 56, who has worked for Bombardier for 27 years. “I am concerned. I was shocked at the size of the tariff.”

The US penalty will only take effect if the US International Trade Commission (ITC) rules in Boeing’s favour. A final decision is expected early in 2018.

British Business Secretary Greg Clark said he was confident the initial Department of Commerce ruling would be overturned, arguing that Bombardier’s CSeries jets did not compete with Boeing.

But Boeing conceded no ground, accusing Bombardier of illegally dumping its products in the US single-aisle airplane market out of desperation.

“Any claimed economic threat to Bombardier is due to the weakness of its product in the marketplace,” said Boeing.

Arlene Foster, leader of the DUP, the Northern Irish party that is propping up May’s minority government, signalled she would put pressure on May to act.

“Everyone realises how important Bombardier is to Northern Ireland and we will use our influence with our government to make sure that continues,” she told Sky News.