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Old 09-27-2017, 12:09 PM   #41
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Originally Posted by blankall View Post
Even Bombardier admits they lowballed the bid, hence the statement stating they expected an 80% duty penalty. If the market price actually was in the 60 million range, the 220% duty penalty may not be too far off the mark.
The expected 60 million dollar price tag comes from some papers I was reading that estimated the C series at 63 million, the Boeing 737 at about 75 million and the Airbus a320 at about 80 million per copy.

And your right, if the estimated cost is 63 million and Bombardier bid at 20 then the 220% tariff makes sense.
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Old 09-27-2017, 12:09 PM   #42
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Being just received 8.7 billion in subsidies to keep manufacturing in Washington. So this isn't an unsubsidized Boeing trying to compete.
It's not just an issue of subsidization. The issue is with turning around and using that subsidization to put in a below market bid on a project, which it sound like is exactly what Bombardier did. The questions is whether a smaller duty penalty (the 80% claimed by Bombardier) or a larger one (the 220% being applied) should be applicable.
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Old 09-27-2017, 02:26 PM   #43
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Except when Boeing went to United Airlines with a bid for the 737, Bombardier submitted what they classed as a ridiculously low bid on the C series jet which I would think made Boeing think that Bombardier was trying to not only poison the bid, but they wanted to compete directly with the 737 class. In effect Bombardier entered the 737 class arena and then lowballed the bid.
Boeing underbid Bombardier on the 737 deal. If I understand correctly these are essentially end of the assembly line 700's and Boeing practically gave them away but how do you argue they were sold below cost and dumped. Actually I think that only foreign companies can 'dump' under U.S. law if what I have read is correct so in that respect Boeing could never be accused of dumping their product even though that is essentially what they did on the United deal since it was a deal between two U.S corporations. Not defending the incompetence of Bombardier as a business but Boeing basically did the same thing and now they are crying fowl.

But Bombardier is still screwed.

https://www.forbes.com/sites/scottha.../#2be0035130da
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Old 09-27-2017, 07:10 PM   #44
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Boeing underbid Bombardier on the 737 deal. If I understand correctly these are essentially end of the assembly line 700's and Boeing practically gave them away but how do you argue they were sold below cost and dumped. Actually I think that only foreign companies can 'dump' under U.S. law if what I have read is correct so in that respect Boeing could never be accused of dumping their product even though that is essentially what they did on the United deal since it was a deal between two U.S corporations. Not defending the incompetence of Bombardier as a business but Boeing basically did the same thing and now they are crying fowl.

But Bombardier is still screwed.

https://www.forbes.com/sites/scottha.../#2be0035130da
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Old 09-27-2017, 07:25 PM   #45
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This is all about Boeing playing hardball. It likely wont be finally resolved before 2018.

"He also noted the irony of Boeing suing anyone over government assistance — when it's the No. 1 recipient of government support through the U.S. Export-Import Bank, referred to jokingly in Washington as, "the Bank of Boeing."
"Boeing is very much at the trough," Ikenson said."...

Proving that its business was harmed by the Bombardier-Delta deal will be hard, Dan Pearson of the Cato Institute said, because Boeing didn't have any suitable jets to bid on the deal at the time.
"This (ITC case) cannot be a slam dunk," the former ITC chairman said. "I'm having a hard time figuring out how Boeing was harmed by this."
http://www.cbc.ca/news/business/boei...dier-1.4309000

Last edited by Phil1111; 09-28-2017 at 06:58 AM.
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Old 09-28-2017, 07:06 AM   #46
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Editorial in National Post today about Bombardier milking the cash cow in Ottawa and Montreal.
http://nationalpost.com/opinion/andr...e-in-aerospace
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Old 09-28-2017, 07:36 AM   #47
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Cheering on the collapse of Bombardier is about as near sighted as Quebecers cheering on the collapse of the oil industry.
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Old 09-28-2017, 07:43 AM   #48
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Bombardier makes good products. They just need a management overhaul.

Also, Canada and the UK could cost Boeing a lot of money if they stopped buying military equipment.

This is also the absolute perfect scenario to get the Liberals to actually buy the F-35. Now they can claim they looked into the Super Hornet, but how can you give that order to Boeing considering what they are doing, so they have no choice but to buy the F-35.

Almost makes it seem like they anticipated the tariff, and played politics around it to come out ahead.
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Old 09-28-2017, 08:36 AM   #49
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This is all about Boeing playing hardball. It likely wont be finally resolved before 2018.

"He also noted the irony of Boeing suing anyone over government assistance — when it's the No. 1 recipient of government support through the U.S. Export-Import Bank, referred to jokingly in Washington as, "the Bank of Boeing."
"Boeing is very much at the trough," Ikenson said."...

Proving that its business was harmed by the Bombardier-Delta deal will be hard, Dan Pearson of the Cato Institute said, because Boeing didn't have any suitable jets to bid on the deal at the time.
"This (ITC case) cannot be a slam dunk," the former ITC chairman said. "I'm having a hard time figuring out how Boeing was harmed by this."
http://www.cbc.ca/news/business/boei...dier-1.4309000
The first part, that Boeing receives subsidies is irrelevant for a few reasons.

First of all because using the Perry Mason line, Boeing wasn't on trial here, Bombardier was, so saying that its an unfair ruling because Boeing gets it has no real meaning. Beyond that what Boeing is saying is that they funneled the Subsidies right into low balling their bid, whereas you could argue that Boeing used their subsidies on things like manufacturing expansion, cost reductions and so on.

In the United Bid as Boeing said, Bombardier entered their C series against Boeings 737 bid and dumped the price. So while yes its correct that they're in different classes, Bombardier tried to enter the C series into the market against the 737. As well Boeing feels that the C series is scalable so at some point they'll have to compete against some version of the C series.

If the winning bid for Delta was at about 19 million per plane that has been spec'ced at $60 million per plane then the 220% math makes some sense, as the Tariff is there to even the playing field.

Its a particularly bad time for this right now for the trade relations between Canada and the US. The NAFTA talks just ended with no real progress again as the American's have dug their heels in. I would expect that the Trump is going to pull out of NAFTA talk is going to heat up in earnest, especially with a new American Ambassador to Canada arriving next week.
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Old 09-28-2017, 08:49 AM   #50
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The first part, that Boeing receives subsidies is irrelevant for a few reasons.

First of all because using the Perry Mason line, Boeing wasn't on trial here, Bombardier was, so saying that its an unfair ruling because Boeing gets it has no real meaning. Beyond that what Boeing is saying is that they funneled the Subsidies right into low balling their bid, whereas you could argue that Boeing used their subsidies on things like manufacturing expansion, cost reductions and so on.

In the United Bid as Boeing said, Bombardier entered their C series against Boeings 737 bid and dumped the price. So while yes its correct that they're in different classes, Bombardier tried to enter the C series into the market against the 737. As well Boeing feels that the C series is scalable so at some point they'll have to compete against some version of the C series.

If the winning bid for Delta was at about 19 million per plane that has been spec'ced at $60 million per plane then the 220% math makes some sense, as the Tariff is there to even the playing field.

Its a particularly bad time for this right now for the trade relations between Canada and the US. The NAFTA talks just ended with no real progress again as the American's have dug their heels in. I would expect that the Trump is going to pull out of NAFTA talk is going to heat up in earnest, especially with a new American Ambassador to Canada arriving next week.
Certainly its relevant. Bombardier just needs to file a NAFTA and WTO complaint against Boeing for dumping 737's into the marketplace to undercut the CS. Then all of Boeing's business practices and subsidies come into play.

Boeing's USAF air tanking bid forms written by lobbyists to eliminate Airbus. To all the favorable tax rulings,cash that Boeing got to relocate 787 production into South Carolina.

"
New details have emerged in South Carolina concerning the financial incentives that helped lure Boeing to expand its manufacturing complex in Charleston.
The city’s Post and Courier newspaper estimated the total value to the planemaker over 30 years at more than $800 million, and probably close to $1 billion."
https://www.seattletimes.com/busines...ane-tax-break/


On another note:
"Europe’s biggest airline, Ryanair, is facing enforcement action from the the Civil Aviation Authority, Britain’s aviation regulator, for “persistently misleading” (pdf) passengers about their compensation rights following the cancellation of around 20,000 flights."
https://qz.com/1089437/ryanair-fligh...nsumer-rights/
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Old 09-28-2017, 08:56 AM   #51
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Sure and I said that previously, however in this particular case that resulted in the 220% tariff, Boeing's business practices are not so to speak on trial.

Bombardier is probably more then welcome to file a NAFTA complaint about Boeing and see where it takes them, however it really won't make a lick of difference in terms of the C series access to the US market.
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Old 09-28-2017, 09:11 AM   #52
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This has become an international incident. The UK government is now threatening Boeing over this.

https://www.theguardian.com/business...-bombardier-us


Vox also predicts this move could backfire badly on the US, citing the threat of both Canada and the UK cancelling contracts with Boeing:

https://www.vox.com/world/2017/9/27/...bardier-canada
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Old 09-28-2017, 10:25 AM   #53
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I really hope that the ITC examines this, realizes the 220% is completely punitive and reduces the tariff to a more acceptable rate. Unless a more rational approach is taken, this could end badly for not only Canada but the US and UK as well.
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Old 09-28-2017, 12:49 PM   #54
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Interesting OP-ED from Airways:

https://airwaysmag.com/industry/the-...-b737-cseries/

Quote:
If it were up to the world, Bombardier would win this, hands down. Alas, it’s up to the Department of Commerce, and they may very well rule in favor of Boeing. “They’re biased,” Schonland said.

“If they come out in favor of Boeing, it will be years before anything really happens,” he added. With no planes delivered and no checks cut, Schonland says Bombardier will just come up with something else.

“And in the meantime, Delta will be flying the CSeries and driving competitors nuts,” he added.

Delta is heavily invested in the CSeries. As the U.S. launch customer, the airline has a firm order for 75 CS100s and has already taken delivery of a flight simulator.
Interesting what might happen to Delta if this deal falls through as they've already invested. I'd imagine there's little chance of getting a deal from Boeing, and what do you do when they don't have the aircraft class that you require?
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Old 09-28-2017, 08:01 PM   #55
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Reading some of the people in this thread cheer about these duties is sickening.

Regardless of bailouts or mgmt a canada us trade war would punish us massively. People who claim bombardier had unfair subsidies relative to other aerospace companies or is dumping should read up on the history of boeing and especially airbus. It is an industry wide practice. Boeing has been selling jets at a loss forever.

Even in this context if trump flexes and throws out duties 220% is ridiculous... It is nothing less than economic bullying. While some canadians cheer apparently.
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Old 09-29-2017, 06:21 AM   #56
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Reading some of the people in this thread cheer about these duties is sickening.

Regardless of bailouts or mgmt a canada us trade war would punish us massively. People who claim bombardier had unfair subsidies relative to other aerospace companies or is dumping should read up on the history of boeing and especially airbus. It is an industry wide practice. Boeing has been selling jets at a loss forever.

Even in this context if trump flexes and throws out duties 220% is ridiculous... It is nothing less than economic bullying. While some canadians cheer apparently.
Perhaps the cheers come from Boeing employees? The story I referenced with a link on the idea that its time for Canada to end the subsidies of the aerospace sector of this company. Makes good points in favor of taxpayer relief.

You are correct that everyone in commercial AC manufacturing gets subsidies. Now the Chinese are getting into the equation as well.
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Old 09-29-2017, 08:34 AM   #57
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Personally I think we should end subsidies to the oil/gas sector.
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Old 09-29-2017, 09:22 AM   #58
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Cancel the Super Hornet and build your own warplane with new leadership at Bombardier. Could call it the Arrow 2.
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Old 09-29-2017, 09:45 AM   #59
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Personally I think we should end subsidies to the oil/gas sector.
Wrong thread.
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Old 09-29-2017, 10:09 AM   #60
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Cancel the Super Hornet and build your own warplane with new leadership at Bombardier. Could call it the Arrow 2.
fine with the first part, I've been saying that the Canadian Government should go nowhere near the Hornet, especially now with the released price tag.

Just a huge no to the second part, its been debated ad nauseum, Canada should stay away from any kind of fighter jet program.

the whole Avro Arrow thing has been exaggerated and practically been given statehood, but it was a failed overly expensive and incompetently run program that needed to be poop canned.
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