‘Absurd’ ruling on Bombardier poses threat to trade relations

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Boeing’s behaviour in a US trade dispute with Bombardier, which threatens thousands of jobs in Belfast, could jeopardise its trading relationship with the government, Defence Secretary Sir Michael Fallon has warned.

As the Province was left reeling at the 220% tariff imposed on Bombardier by the US Department of Commerce, Sir Michael warned Boeing that its victory could yet prove a hollow one.

In Belfast to announce that a new Royal Navy ship is to be named HMS Belfast, he fired an unambiguous warning shot at the US manufacturer stating: “This is not the behaviour we expect of Boeing and could indeed jeopardise our future relationship.

Dismissing the ruling as absurd, a statement from Bombadier described the proposed duty – effectively tripling the cost of the C Series in the US – as “divorced from reality”.

“This result underscores what we have been saying for months: the US trade laws were never intended to be used in this manner, and Boeing is seeking to use a skewed process to stifle competition and prevent US airlines and their passengers from benefiting from the C Series.”

The simple truth, it added, was that Bombardier had created a superior aircraft that is more efficient, more comfortable, and quieter.

“The C-Series serves a market segment not supported by any US manufacturer. Delta wants to bring this remarkable new aircraft to the US flying public. Boeing wants to prevent US passengers from realising these benefits, irrespective of the harm that it would cause to the US aerospace industry and the cost to airlines and consumers.”

In London, Paul Everitt, the chief executive of the aerospace and defence industry group ADS, said Delta’s announcement that it intended to fight the ruling with Bombardier was encouraging but acknowledged that it was a worrying development for thousands of staff at Bombardier and also the hundreds of suppliers in Northern Ireland and the rest of the UK.

“This is clearly going to be very unsettling for Bombardier’s workforce, particularly in Northern Ireland, but I think I would urge that at this point we should try and remain reasonably calm.

“Trade disputes are by their very nature long-running issues and I think that the positives that we have seen today are that Delta, as the big customer in the US, has indicated that it wishes to continue with the deal and have its aircraft delivered and that’s a positive.

“We’ve also seen very strong support from government in UK and Canada in terms of their willingness to engage with their US governmental contacts and also with Boeing and I guess we are all hoping that over the next few weeks and months we can get to a point where we can find a sensible resolution to this particular dispute.”

Referring specifically to the size of the tariff – significantly higher than the 80% suggested by Boeing – Mr Everitt said there was little doubt that it was exceptionally punitive in its reach.

“I think anybody looking at the judgment would question whether or not this was a reasonable view to take.

“The level of tariff suggested is about preventing Bombardier selling their product in America and that can’t be to the long-term benefit of anyone involved.

“Aerospace is a global industry and we’ve got a lot of companies that will be in the supply chain to all companies whether it’s Bombardier, Boeing or Airbus.

“It is to the advantage of those major companies that there is a strong and diversified supply chain available to them.”

Looking ahead to the negotiations, Bombardier said it would be up to the International Trade Commission to determine whether Boeing suffered any injury from the C-Series.

“Because Boeing did not compete at Delta and because Boeing years ago abandoned the market the C-Series serves, there is no harm.

“There is wide consensus within the industry on this point, as well as a growing chorus of voices, including airlines, consumer groups, trade experts, and many others who have come forward to express grave concerns with Boeing’s attempt to force US airlines to buy less efficient planes with configurations they do not want and economics that do not deliver value.

“The US government should reject Boeing’s attempt to unfairly tilt the playing field in its favour and to impose an indirect tax on the flying public through unjustified import tariffs.”

Prime Minister Theresa May has vowed to work to protect jobs at Canadian-owned Bombardier’s operations in Northern Ireland after expressing bitter disappointment at the proposed tariff.

Bombardier is due to deliver the first aircraft in the initial order of 75 to Atlanta-based Delta Airlines in 2018.

Three other US airlines, including New York-based Jet Blue and Spirit Airlines, have also spoken out to attack Boeing’s action as an attempt to block innovation and by doing so damaging employment and the aviation industry as a whole across the United States.

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