Boeing is being pound foolish and penny wise. The could prevail in this dispute. It will do them more harm than good. As well as harm US consumers who already suffer from the withdrawal of services from too many smaller airports.*

*consider WN, they use only 737s, and serve very few 'fly over' zone cities. Why? Because it is not economical.

So, if I'm understanding the above posts correctly, the commission found that 4 other airlines that are both competitors of Delta airlines and have a material interest in harming a competitor by engaging in demonstrably false testimony were willing to testify that they would have considered the CS-100 as a viable competitor to the 737-700 when making a fleet purchase decision. And, yet, none of them have seen fit to even show interest in the Embraer 190-E2, which is demonstrably MUCH closer to the CS-100 in both size and capability (as well as the 195 vs CS-300). Even accepting the testimony of Delta competitors in reference to this sale is beyond crazy as all of them have obvious motive to give false testimony to help reduce the competitive advantage that Delta might be able to get by taking the risk on this new aircraft type.

I haven't seen anyone blame Delta. If you can get optimized planes at that price then by all means buy them.

The question of course is would Delta do the same thing at a price point that wouldn't constitute dumping? No one is questioning that it makes a lot of sense for them as presently constructed.

As far as loss leader that is what is really at issue. Can BBD make a case that that is what this is? I would ask if they project that any of the current sales will turn an operating profit. At what airframe do they expect to cross from the point at which the cost of construction is more than the sales price? My guess is, if they are priced anywhere close to what the Delta deal is reported to be, that they can't project to cross that threshold at any point in the currently sold aircraft. If they were then I would expect they would disclose such information in their response as it would be a robust defense in my view.

Launch customer pricing should be able to include an amount of "risk sharing" that can be factored into the price of initial production units. There is a risk that BBD can't deliver on the schedule promised, or has a technical problem after launch. Reducing the purchase cost can take that risk into account and give BBD favorable post sale contract terms with respect to lost revenues from delivery or service problems. I don't know how that can factor into international trade disputes however as I'm sure that there is plenty of law covering it.

Jamie514 wrote:

Because even though a loss leading early sale of 75 units is hardly an outlier in this industry, on domestic soil or foreign, this time, its a big big deal because the seller-country is supposed to remain the subservient member of this cozy two-country partnership and should be regarded as a predatory foreign entity today.

Also, see Steve Bannon on `economic nationalism' in the recent Charlie Rose interview and the discussion in the current Aviation Week podcast on this dispute. This dispute is an opening salvo against all the other countries who subsidise their industries [, in ways different to that adopted by the U.S.].
I suspected Boeing became politicized by Trumps `talking to them' a few months ago, supposedly about the AF1 replacement, and the speech at the 787 plant in Charlotte. Something shifted there and it wasn't good. You could smell it.

voodoo wrote:

Jamie514 wrote:

Because even though a loss leading early sale of 75 units is hardly an outlier in this industry, on domestic soil or foreign, this time, its a big big deal because the seller-country is supposed to remain the subservient member of this cozy two-country partnership and should be regarded as a predatory foreign entity today.

Also, see Steve Bannon on `economic nationalism' in the recent Charlie Rose interview and the discussion in the current Aviation Week podcast on this dispute. This dispute is an opening salvo against all the other countries who subsidise their industries [, in ways different to that adopted by the U.S.].
I suspected Boeing became politicized by Trumps `talking to them' a few months ago, supposedly about the AF1 replacement, and the speech at the 787 plant in Charlotte. Something shifted there and it wasn't good. You could smell it.

I think what has changed is Boeing's perception of how to react to potential threats. The legal provisions have not changed and in the last 30 years have been triggered by countless times, by the most diverse industrial segments.

LightningZ71 wrote:

Launch customer pricing should be able to include an amount of "risk sharing" that can be factored into the price of initial production units. There is a risk that BBD can't deliver on the schedule promised, or has a technical problem after launch. Reducing the purchase cost can take that risk into account and give BBD favorable post sale contract terms with respect to lost revenues from delivery or service problems. I don't know how that can factor into international trade disputes however as I'm sure that there is plenty of law covering it.

Well, Delta was not exactly a launch customer since the program came in 2008. By 2016 the CS 100 had been flying for 2.5 years and was about to start operating at Swiss.

washingtonflyer wrote:

Jamie514 wrote:

washingtonflyer wrote:

Based on the record of the preliminary phase of the investigations, we find that there is a moderate to high degree of substitutability between subject imports and domestically produced 100- to 150-seat LCA.173 *** responding domestic LCA producers and four of six responding U.S. importers/purchasers reported that subject imports were always interchangeable with 100- to 150-seat LCA produced in the United States.174 Although petitioner and respondents agree that the 737-700 and 737 MAX 7 compete with the CS300,175 there is some evidence that the higher seating capacity of the 737-700 and 737 MAX 7 limits competition between those models and the CS100. 176 Nevertheless, United ***, and placed an order for 737-700s ***.177

USITC Pub. 4702 at 26.

We have found a moderate to high degree of substitutability between subject imports and domestically produced 100- to 150-seat LCA.216 We have also found that price is an important factor in purchasing decisions, although non-price factors are also important.217

USITC Pub. 4702 at 31.




Thats not at all what they said. They said that the 737-7 and Max7 is a substitute.



The Commission found otherwise.



Huh? They alleged dumping and we're getting a dumping finding from Commerce within the next 60 days.

Thank you for exposing for everyone what a farce of a commission it is. A 20 year old design being granted consideration as a fair play against brand new tech? If it was just some user saying that type of thing here, they would be accused of trolling.

Its hard to believe even American aviation fans buy into this garbage.

Maybe its difficult to acknowledge the passing of time or the leaps made in technology? For perspective, In 1997 when the 73G was a new offering, the DC-9-50 and the 737-200adv were about 20. And United ended up rejecting those lowball 73Gs because they realized they were about to buy a brand new fleet that would be uneconomical over their lifetime since competitors are buying MAX, NEO and CS.

I'm not disputing that this is what the comission is finding, but its clearly blindly biased to the point of being as others stated, a kangaroo court.

If anything this action will set new precedent leaving the US industry open to all sort of sour consequences. If a 73G is a viable competition to CS100, Boeing sales will come under scrutiny because of how the Americans have stretched and distorted the parameters and criteria. That can work both ways.

I don't think you're seeing a Kangaroo court. You're seeing a proceeding where the Commission is listening to the arguments forwarded by the parties. I read the Staff conference transcript and read the briefs. Covington did not to a fantastic job at the conference or in its brief. In fact, the Bombardier and Delta witnesses were contradicting each other.

The questionnaire data shows that four out of six importers felt that there was overlap in product. According to the report, "four of six responding U.S. importers/purchasers reported that subject imports were always interchangeable with 100- to 150-seat LCA." If four out of six importers say so and they usually have a vested interest in supporting imported product, the Commission is going to give the domestics the benefit of the doubt in a preliminary phase because the legal standard for an affirmative determination in a preliminary Title VII investigation at the ITC is very low and if there any material questions that remain unanswered, the Commission is obligated courtesy of a case called American Lamb to vote in the affirmative. According to the holdings in American Lamb, the Commission may reach a negative preliminary determination only if “(1) the record as a whole contains clear and convincing evidence that there is no material injury or threat of such injury; and (2) no likelihood exists that contrary evidence will arise in a final investigation.”

For the issues that are in doubt, the Commission will then revisit the issues in the final phase.

When you come on down to DC next time and sit in the hot seat before the Commission or the Staff, please feel free to reassess your opinion of the Commission. They are a very smart bunch and they are very thorough in their deliberative process.

They can't be that bright if they see an overlap when the customer couldn't. As well, their inability to see through
Boeing's dramatic histrionics while they are racking up records sales for the very product line that BBD is supposed to be putting in jeopardy, along with the rest of the company as well as the entire US aerospace industry.

If you honestly believe any of that rubbish...well....i have a lovely plot of well watered land in Florida you can have at unbeatable prices.

bigjku wrote:

I haven't seen anyone blame Delta. If you can get optimized planes at that price then by all means buy them.

The question of course is would Delta do the same thing at a price point that wouldn't constitute dumping? No one is questioning that it makes a lot of sense for them as presently constructed.

As far as loss leader that is what is really at issue. Can BBD make a case that that is what this is? I would ask if they project that any of the current sales will turn an operating profit. At what airframe do they expect to cross from the point at which the cost of construction is more than the sales price? My guess is, if they are priced anywhere close to what the Delta deal is reported to be, that they can't project to cross that threshold at any point in the currently sold aircraft. If they were then I would expect they would disclose such information in their response as it would be a robust defense in my view.

Blame Delta for what? I already quoted a Delta executive say that the 737 is not a substitute for the CS100. And, it wasn't a press interview...it was during testimony at the hearings. Delta, (the customer and, you know...airline expert), said Boeing did not have a product in the passenger range required by the airline.

There's no reason for you to guess. It's right there on the public record. That the commission would put the 737-700 and the CS100 in the same category, is beyond absurd and is yet another in a long list of indicators of how ill informed and poorly researched the commission was.

They may have razor sharp expertise when it comes to canned corn or bicycle sprockets...but they know next to nothing about airline operations. They were either ignorant or biased...or perhaps both.

zckls04 wrote:

PPVRA wrote:

As healthy as it can be, yet it's a duopoly and people on this board have harshly criticized manufacturers who keep putting out warmed over products. But it's as healthy as it can be.....

Boeing's lawsuit works to reinforce the duopoly, not disrupt it.

FYI, perhaps bombardier couldn't have done the c Series on their own, but they could have partnered with other companies to achieve scale and spread risk.

I would say the problem isn't scale or risk, it's cost of borrowing and taxes. When your development costs are $1000, the fact your competitor borrows at an X% lower rate isn't really going to affect your ability to sell your product at a competitive price. When your development costs are $3 billion, suddenly that difference amounts to a lot of money that you have to recover through sales. Ditto the tax situation with Boeing. Boeing gets something like a 93% reduction in its tax bill to the state of Washington. New entrants to the market aren't afforded that luxury. You can partner and risk share with as many partners as you like, but it doesn't really help with either of those problems

New entrants to the market also don't get subsidies and the political clout BBD obviously has. But it's a healthy market.....

FYI spreading risk and partnerships is how Embraer built the ejets without subsidies. Bombardier could have built a joint venture with another company, say Lockheed Martin to address scale issues.

@JoeCanuck,

1)"Blame Delta for what? I already quoted a Delta executive say that the 737 is not a substitute for the CS100.": I would be surprised if Delta had said something different, even because the adoption of anti-dumping measures would directly affect its results.
2) "That the commission would put the 737-700 and the CS100 in the same category, is beyond absurd and is yet another in a long list of indicators of how ill informed and poorly researched the commission was.": It is a fact that the marketing of the BBD always presented the line CS in comparison (advantageous) with respect to the single aisle offers of its competitors. Substitution and complementation are just nuances to gauge the degree of competition.

I'm a little tired of seeing the Bombardier fan club appealing to all sorts of arguments but avoiding getting into the heart of the question: Can government subsidies turn a noncompetitive product into a success? The recent rallies of the leaders of Canada and the United Kingdom have only shown that there is a lot of public money at stake.

ytz wrote:

phxa340 wrote:

ytz wrote:

If Boeing succeeds, I hope the Canadian government pursues sanction which permanently exclude all Boeing aircraft. Commercial and military from further consideration in Canada. Air Canada and Westjet should both face extreme pressure to drop their 737 Max orders. Or pay more for them.

It's ridiculous that Boeing gets more subsidies from Washington State alone than Bombardier has gotten in its lifetime. There's also production in "right-to-work" states and subsidies from other countries like Japan. Boeing also gets to quietly develop a lot of knowledge and expertise on the military side of the house that they slowly transfer to the civilian side. Oh there's rules against all that. But somehow, they never get enforced against Boeing.

And we all know Boeing would never try this against Comac or Sukhoi because those markets are important. That tells me that the Canadian government needs to step up and make sure Boeing feels incredible pain if Bombardier loses this dispute.

If the Trudeau government doesn't defend Bombardier aggressively, they've lost my vote and donations.

Tone down the nationalism buddy. What you are essentially saying is to have Boeing blocked from RFPs. Airbus would laugh all the way to the bank as there wouldn't be a commercial competitor. Just because Boeing is the larger competitor doesn't make it a "bully".

Why should I tone down squat? It's my right as a Canadian citizen to insist that my government defend our national interests. And I have written to my member of Parliament and said exactly what I've said here. Looks like the government is finally getting the message:

http://www.cbc.ca/beta/news/politics/bo ... -1.4295415

Were this an actual free market, I'd be with the rest on this forum. But it isn't. And Bombardier is being targeted specifically because they are small. For example, Airbus can win a defence contract and Boeing pouts and get's a do-over. They even get to keep the contract after getting caught for corruption and having procurement officials and company executives go to prison over the deal:

https://en.wikipedia.org/wiki/Darleen_Druyun

And complaining about a billion in repayable launch aid when Boeing gets $13 billion from just STATE and LOCAL governments:

https://www.washingtonpost.com/blogs/go ... 4080b35105

Nope. In this insistence, it's Americans playing the nationalism card. And they expect everyone else to bend over and beg for more.

Doesn't work like that.

And I'm absolutely okay with Boeing getting locked out of the Canadian market and Airbus gaining market share. The Europeans should be rewarded for not resorting to protectionist measures like the Americans have. After all, Boeing has been handsomely rewarded by military contracts (C-17 and Chinook) and civilian orders (Westjet and Air Canada 737 Max orders) in the last few years. And this is how they repay us? I absolutely want them blacklisted from ALL defence contracts. And I want every legal loophole and measure exploited to make sure all Boeing products become inconvenient and expensive to own in Canada.

Lol. If you don't see the blatant hypocrisy in your logic then I can't help you. But if you expect your government to defend Canadian interests but when the US does it , it's somehow a villain ?

Also following your logic, if you say that a country has a right to protect its interests and it should, then the US should have in fact picked Boeing to build the KC-46 , so not sure why you are saying Airbus should have gotten the contract by your logic ? Unless , of course - back To my original point, your just blinded by your own nationalism and narrow thinking.

BBD took a risk and is now getting called on it, whether right or wrong.

Nean1 wrote:

@JoeCanuck,

1)"Blame Delta for what? I already quoted a Delta executive say that the 737 is not a substitute for the CS100.": I would be surprised if Delta had said something different, even because the adoption of anti-dumping measures would directly affect its results.
2) "That the commission would put the 737-700 and the CS100 in the same category, is beyond absurd and is yet another in a long list of indicators of how ill informed and poorly researched the commission was.": It is a fact that the marketing of the BBD always presented the line CS in comparison (advantageous) with respect to the single aisle offers of its competitors. Substitution and complementation are just nuances to gauge the degree of competition.

I'm a little tired of seeing the Bombardier fan club appealing to all sorts of arguments but avoiding getting into the heart of the question: Can government subsidies turn a noncompetitive product into a success? The recent rallies of the leaders of Canada and the United Kingdom have only shown that there is a lot of public money at stake.

I'm a little tired of the Boeing fan club completely ignoring the billions of government help and cut rate pricing Boeing has taken advantage of. As for getting a leg up from various governments; The ceo of Boeing recently had a front row seat on AF1 during trump's 'BUY USA' sales campaign in the middle east where the president of the USA was shilling for the company. Boeing chose Charleston because of the tax breaks and has gotten billions in incentives from Washington.

As well, the customer is the ONLY one who can properly judge what is suitable for them. Delta was looking for a plane of a certain size. Boeing didn't have any for sale...except for some used stuff parked in the desert. Boeing was never in the race. But why listen to what the customer has to say? By all accounts, the CSeries is more than competitive for Delta; it was exactly right, and the Boeing products were exactly wrong.

Of course...it must be Delta that was full of crap...not Boeing, right?

Of course BBD presents the advantages of its products over others...and the comparison is; better CASM and lower trip costs in a smaller package. You can right size to your markets. No reason to haul around excess weight and all those extra seats for routes that don't warrant it. They never presented the CS100 as a one to one substitute.

Regardless of what surprises you, Delta's testimony was a hell of a lot more credible than the hyperbolic tirade that Boeing was spouting...claiming that the very future of the company and the American aerospace industry was at stake because of BBD.

If that steaming load was enough to cast doubt on the veracity of Boeing's claim, the court couldn't possibly get any more kangaroo.

There was no harm to Boeing since Boeing doesn't have a product that was suitable to the customer. Period. Everything else is irrelevant.

The US can protect its products any way it chooses, (though over 50% of the CSeries is USA sourced, and the customer happened to be American as well). Pretending this action is anything more than hypocritical protectionism, is delusional.

JoeCanuck wrote:

Regardless of what surprises you, Delta's testimony was a hell of a lot more credible than the hyperbolic tirade that Boeing was spouting...claiming that the very future of the company and the American aerospace industry was at stake because of BBD.

If that steaming load was enough to cast doubt on the veracity of Boeing's claim, the court couldn't possibly get any more kangaroo.

The burden of proof, at this stage of the game, is pretty light. I wouldn't say that the commission is so much of a kangaroo court, but rather that the legislation governing the commission is very poorly written. It is far too easily abused for protectionist ends. Even if Boeing were to ultimately lose this battle, when it's all finally over, Boeing still wins for all the damage that is being done to Bombardier right now. The very last thing the CSeries program needs is more uncertainty.

Nean1 wrote:

The recent rallies of the leaders of Canada and the United Kingdom have only shown that there is a lot of public money at stake.

It shows more than anything that there are jobs at stake.

Apparently, there will be an announcement of some kind of decision next Tuesday

http://www.timescolonist.com/u-s-decisi ... 1.22856170

SteelChair wrote:

Apparently, there will be an announcement of some kind of decision next Tuesday

http://www.timescolonist.com/u-s-decisi ... 1.22856170

Funny that Boeing says it doesn't care losing Delta just to win this dispute. Let's see if they say the same thing when Delta actually drops them and becomes a full Bombardier and Airbus carrier.

many321 wrote:

SteelChair wrote:

Apparently, there will be an announcement of some kind of decision next Tuesday

http://www.timescolonist.com/u-s-decisi ... 1.22856170

Funny that Boeing says it doesn't care losing Delta just to win this dispute. Let's see if they say the same thing when Delta actually drops them and becomes a full Bombardier and Airbus carrier.

Nothing is funny about this. Delta is a business an understand they aren't Boeing's target in this dispute. Additionally, Delta won't block Boeing from the narrow body RFP as it will drive up the price from Airbus. Plus BBD losing access to the US maket would be devestating to the C series , Boeing losing Delta ... they were kind of already on the path and while it hurts, not as bad as losing access to the US market.

Jamie514 wrote:

Amiga500 wrote:

The whole idea the CS100 is comparable to the 737-7max is so illogical it means the court can be either biased and smart, or fair and stupid. There really is nowhere in between.

If I've read washingtonflyer's post correctly, its worse: in addition to the overbuilt 737MAX, they say the overbuilt and fuel thirsty CFM56 powered 737-700 is a suitable substitute. Its a waste of breath though.

From following washingtonflyer's posts, it sounds like "suitable" is not one of the criteria for substitutability. What you're getting at is how cost-competitive the 737's operating economics are on similar routes, but the analysis involved here does not seem to be quite so specific.

I also disagree that the 737MAX and 737-700 really compete with the CS100. It's a little tougher to say they can not serve some of the same routes. After all, Southwest regularly flies those aircraft in the same manner Delta will fly the CS100. I can conceive of concluding a moderate degree of "substitutability," although a "high degree" really strains my credulousness.

washingtonflyer wrote:

Huh? They alleged dumping and we're getting a dumping finding from Commerce within the next 60 days.

I believe JoeCanuck is saying Boeing alleged dumping and specific harms from dumping, rather than saying they alleged specific harms, but not dumping.

washingtonflyer wrote:

As expected, there is a flurry of fighting over date of sale...

Do you mean fighting over whether or not the sale has actually occurred yet (commitment date vs. contract date vs. delivery date?), and therefore whether dumping could even have taken place yet?

phxa340 wrote:

many321 wrote:

SteelChair wrote:

Apparently, there will be an announcement of some kind of decision next Tuesday

http://www.timescolonist.com/u-s-decisi ... 1.22856170

Funny that Boeing says it doesn't care losing Delta just to win this dispute. Let's see if they say the same thing when Delta actually drops them and becomes a full Bombardier and Airbus carrier.

Nothing is funny about this. Delta is a business an understand they aren't Boeing's target in this dispute. Additionally, Delta won't block Boeing from the narrow body RFP as it will drive up the price from Airbus. Plus BBD losing access to the US maket would be devestating to the C series , Boeing losing Delta ... they were kind of already on the path and while it hurts, not as bad as losing access to the US market.

That parallels my thoughts.

Separately, I'm curious if Boeing might have grounds for some form of retaliation complaint due to the Canadian government suspending the Super Hornet deal.

JoeCanuck wrote:

washingtonflyer wrote:

Jamie514 wrote:

Thank you for exposing for everyone what a farce of a commission it is. A 20 year old design being granted consideration as a fair play against brand new tech? If it was just some user saying that type of thing here, they would be accused of trolling.
....
I'm not disputing that this is what the comission is finding, but its clearly blindly biased to the point of being as others stated, a kangaroo court.

I don't think you're seeing a Kangaroo court. You're seeing a proceeding where the Commission is listening to the arguments forwarded by the parties.
....
The questionnaire data shows that four out of six importers felt that there was overlap in product. According to the report, "four of six responding U.S. importers/purchasers reported that subject imports were always interchangeable with 100- to 150-seat LCA." If four out of six importers say so and they usually have a vested interest in supporting imported product, the Commission is going to give the domestics the benefit of the doubt in a preliminary phase because the legal standard for an affirmative determination in a preliminary Title VII investigation at the ITC is very low and if there any material questions that remain unanswered, the Commission is obligated courtesy of a case called American Lamb to vote in the affirmative. According to the holdings in American Lamb, the Commission may reach a negative preliminary determination only if “(1) the record as a whole contains clear and convincing evidence that there is no material injury or threat of such injury; and (2) no likelihood exists that contrary evidence will arise in a final investigation.”

For the issues that are in doubt, the Commission will then revisit the issues in the final phase.

They can't be that bright if they see an overlap when the customer couldn't. As well, their inability to see through
Boeing's dramatic histrionics while they are racking up records sales for the very product line that BBD is supposed to be putting in jeopardy, along with the rest of the company as well as the entire US aerospace industry.

If I understand the current stage of the case properly, everybody participating in this thread needs to read and understand the part of washingtonflyer's post that I bolded to have any hope of comprehending/- why the case is proceeding as it has.

If a critical point of the case is in contention, that doesn't mean the case gets thrown out. It means it proceeds to the next stage, at which point the contention has to be examined in more detail and resolved.

iamlucky13 wrote:

If a critical point of the case is in contention, that doesn't mean the case gets thrown out. It means it proceeds to the next stage, at which point the contention has to be examined in more detail and resolved.

The case will be brought forward at all cost. both from Boeing and the US institutional side
as it is deemed a major attack on US trade style. In the vein of regular court cases BBD will
be dunked in massive allegations of illegalities backed by proposing extremely excessive punishments .
Final outcome : a behind the doors negotiated judgement that entails a guilty plea from BBD
but at much lower levels of compensation demand.

That is not really what "kangaroo court" tags but nonetheless
a caricature of legal proceedings slapped onto reality.

iamlucky13 wrote:

washingtonflyer wrote:

As expected, there is a flurry of fighting over date of sale...

Do you mean fighting over whether or not the sale has actually occurred yet (commitment date vs. contract date vs. delivery date?), and therefore whether dumping could even have taken place yet?

phxa340 wrote:

many321 wrote:

Funny that Boeing says it doesn't care losing Delta just to win this dispute. Let's see if they say the same thing when Delta actually drops them and becomes a full Bombardier and Airbus carrier.

Nothing is funny about this. Delta is a business an understand they aren't Boeing's target in this dispute. Additionally, Delta won't block Boeing from the narrow body RFP as it will drive up the price from Airbus. Plus BBD losing access to the US maket would be devestating to the C series , Boeing losing Delta ... they were kind of already on the path and while it hurts, not as bad as losing access to the US market.

That parallels my thoughts.

Separately, I'm curious if Boeing might have grounds for some form of retaliation complaint due to the Canadian government suspending the Super Hornet deal.

I'm going to say no.

https://sencanada.ca/content/sen/commit ... INAL_e.pdf
and
https://sencanada.ca/content/sen/commit ... INAL_e.pdf

A Canadian Government Senate report was published (so research and written in advance) of the Boeing issues that suggested cancelling the interim Super Hornet purchase and go ahead with a full purchase by summer 2018. I would think such a high level document would be enough proof that the current path was being looked at far longer than the current dispute. That said, the dispute could be a convenient exit strategy to get something else.

If anything, the reports are interesting reading for a very broad security sense, and not just Canada. Look at the concerns about Chinese military buildup.

jalarner wrote:

iamlucky13 wrote:

washingtonflyer wrote:

As expected, there is a flurry of fighting over date of sale...

Do you mean fighting over whether or not the sale has actually occurred yet (commitment date vs. contract date vs. delivery date?), and therefore whether dumping could even have taken place yet?

phxa340 wrote:

Nothing is funny about this. Delta is a business an understand they aren't Boeing's target in this dispute. Additionally, Delta won't block Boeing from the narrow body RFP as it will drive up the price from Airbus. Plus BBD losing access to the US maket would be devestating to the C series , Boeing losing Delta ... they were kind of already on the path and while it hurts, not as bad as losing access to the US market.

That parallels my thoughts.

Separately, I'm curious if Boeing might have grounds for some form of retaliation complaint due to the Canadian government suspending the Super Hornet deal.

I'm going to say no.

https://sencanada.ca/content/sen/commit ... INAL_e.pdf
and
https://sencanada.ca/content/sen/commit ... INAL_e.pdf

A Canadian Government Senate report was published (so research and written in advance) of the Boeing issues that suggested cancelling the interim Super Hornet purchase and go ahead with a full purchase by summer 2018. I would think such a high level document would be enough proof that the current path was being looked at far longer than the current dispute. That said, the dispute could be a convenient exit strategy to get something else.

If anything, the reports are interesting reading for a very broad security sense, and not just Canada. Look at the concerns about Chinese military buildup.

As I said in the SH thread in the mil av forum, I suspect the Canadian government may have decided since coming into office that the Lightning is the better buy after all and see an opportunity in this case to get political cover for going back on their campaign pledge to nix the F-35 and go ahead and order the plane.

These reviews are of interest to all BBD fan club:
http://www.macleans.ca/opinion/trudeaus ... nd-boeing/
https://www.forbes.com/sites/lorenthomp ... next-week/

Nean1 wrote:

These reviews are of interest to all BBD fan club:
http://www.macleans.ca/opinion/trudeaus ... nd-boeing/
https://www.forbes.com/sites/lorenthomp ... next-week/

Not biased at all

Jayafe wrote:

Nean1 wrote:

These reviews are of interest to all BBD fan club:
http://www.macleans.ca/opinion/trudeaus ... nd-boeing/
https://www.forbes.com/sites/lorenthomp ... next-week/

Not biased at all

Ha! No kidding.

Macleans article: Sure. All governments worldwide should stop subsidizing all aviation industries. Great idea, if you could convince all of them to do it, honestly, and all at once. Good luck with that. And, enjoy your expensive fares when airlines have to pay a lot more to purchase their aircraft.

Forbes: No news here. I don't think many here dispute the likelihood that the commission will find against Bombardier, especially this first phase. What bothers people, myself included, is the fairness of the legislation guiding the commission. It seems biased and too easily abused in an anti-trade protectionist manner. That's just my opinion. Do what you want with it.

Maclean's is headquartered in a province that had it's entire car industry and auto industry pensions bailed out by the Federal and Ontario governments in 2008 along with untold billions every year before and since. Funny how they don't mention that. Classic hypocrisy.
I'm a subscriber of Forbes-it is a Trump/GOP propaganda machine.
I don't like industrial subsidies either but unfortunately it's the only way to stay in a game where everybody else does it one way or another. It has been that way since the Wright brothers.

Nean1 wrote:

These reviews are of interest to all BBD fan club:
http://www.macleans.ca/opinion/trudeaus ... nd-boeing/
https://www.forbes.com/sites/lorenthomp ... next-week/

These are not reviews. They are editorials.

From Forbes:

This case arose because U.S. carrier Delta struck a deal with Bombardier last year to buy 75 C Series airliners for about $20 million each. The planes cost over $30 million to build, so Bombardier was basically giving them away to gain market share in the U.S. No mystery there

I haven't had time to dig into the proceedings, so I have to ask, is it incontrovertibly established that the sales price was $20 million and the production cost is $30 million, or is that simply Boeing's argument for what the figures are? If the latter case, then "no mystery there" is currently a premature conclusion.

Having seen its own share of the global market drastically reduced by unfair competition from a subsidized European plane maker

Or put another way, having seen it's annual revenue increase over 500% over the last 30 years...

Seriously, this was the tamer of the two editorials, and even it is making it sound like Boeing is hanging by a thread. I can almost imagine Muilenberg showing up to the Commerce Department hearings wearing a neck brace, pointing at Bellemare and somberly saying, "Yes, I recognize the one who did this to me. He is sitting right there your honors."

Neither article is a factual examination of what aid was provided and how it fits or does not fit with the trade rules. Whichever way it goes, I'm almost eager for the ruling simply for the sake of ending some of the legal theatrics.

Of course, it doesn't really end there.

iamlucky13 wrote:

Nean1 wrote:

These reviews are of interest to all BBD fan club:
http://www.macleans.ca/opinion/trudeaus ... nd-boeing/
https://www.forbes.com/sites/lorenthomp ... next-week/

These are not reviews. They are editorials.

From Forbes:

This case arose because U.S. carrier Delta struck a deal with Bombardier last year to buy 75 C Series airliners for about $20 million each. The planes cost over $30 million to build, so Bombardier was basically giving them away to gain market share in the U.S. No mystery there

I haven't had time to dig into the proceedings, so I have to ask, is it incontrovertibly established that the sales price was $20 million and the production cost is $30 million, or is that simply Boeing's argument for what the figures are? If the latter case, then "no mystery there" is currently a premature conclusion.

And yes, I know that this doesn't make a difference to the commission, but just a week ago, Boeing further extended its accounting block for the 787 program. Now, the development costs are to be spread out over 1400 frames. So, over how many units does Bombardier get to spread out its development costs? BBD ought to be able to push its accounting block out in a comparable manner. That is, if the commission is going to make calculations in a manner which is fair and balanced. Of course, there is often a significant gap between what is legal and what is just.

Seattle Times aviation reporter Gates weighs in. While Gates is careful to report one can gather his opinion:

http://www.seattletimes.com/business/bo ... ombardier/

The MAX-700 has sold poorly because it is too heavy for its size
Most of the 'subsidy' for the C is equity buy in, and it is anyone's guess as to whether it will be a payoff to Quebec
Boeing, without any acknowledgement of 'Irony' ignores its subsidies from Japan and Washington State, takes advantage of US law and may well win
The aviation business will be the poorer if Boeing wins
The C-100 is an excellent plane while the MAX-700 is not

iamlucky13 wrote:

I haven't had time to dig into the proceedings, so I have to ask, is it incontrovertibly established that the sales price was $20 million and the production cost is $30 million, or is that simply Boeing's argument for what the figures are? If the latter case, then "no mystery there" is currently a premature conclusion.

No, it is not incontrovertibly established. This is a Boeing claim, and based on faulty methodology. They took a capital commitment line from Delta's 10-K/10-Q filings and divided by a number of deliveries occurring during a period according to an Ascend database. While the 10-K/10-Q can't be disputed, it can be net of things like PDPs, which means the capital commitment line could be as much as 20% low; in addition, Ascend's prediction of future deliveries is only an educated guess and within a margin of error as well.

So regardless of what Delta is actually paying (which is not $20M, of that I am sure), Boeing still wins by getting to put a price out there, one which now every future CSeries offer to future prospective customers will be compared.

frmrCapCadet wrote:

Seattle Times aviation reporter Gates weighs in. While Gates is careful to report one can gather his opinion:

http://www.seattletimes.com/business/bo ... ombardier/

The MAX-700 has sold poorly because it is too heavy for its size
Most of the 'subsidy' for the C is equity buy in, and it is anyone's guess as to whether it will be a payoff to Quebec
Boeing, without any acknowledgement of 'Irony' ignores its subsidies from Japan and Washington State, takes advantage of US law and may well win
The aviation business will be the poorer if Boeing wins
The C-100 is an excellent plane while the MAX-700 is not

Very interesting, but I wish all those on BBD’s side good luck in convincing people that evidently don’t know that much about the industry and the roles the planes fill that Boeing is wrong.

”Just as Airbus years ago stole domestic market share and helped drive U.S. competitors Lockheed and McDonnell Douglas out of the commercial-airplane market by selling its subsidized aircraft at below-market prices, Bombardier has targeted Boeing,” the company stated in its petition.

I find this one very interesting. It really shows their attitude towards competition. Airbus didn’t steal market share, they won it with Aircraft Boeing, McDonnell Douglas, and Lockheed couldn’t compete with. I really don’t see what Airbus did to Lockheed or McDD that Boeing didn’t do to kill them off. Lockheed backed themselves out of the market and Boeing killed off McDD and the merged with them. This statement is not good as it makes them look as if they believe they are entitled to every order of aircraft in their home market, but it was acceptable to have other US manufactures get some because they were American and were weaker. Not only do I smell a little nationalism there, but it really makes them look as if they do not believe in free market or competition dispite selling so many aircraft overseas including airlines from Airbus’s home markets.

767333ER wrote:

frmrCapCadet wrote:

Seattle Times aviation reporter Gates weighs in. While Gates is careful to report one can gather his opinion:

http://www.seattletimes.com/business/bo ... ombardier/

The MAX-700 has sold poorly because it is too heavy for its size
Most of the 'subsidy' for the C is equity buy in, and it is anyone's guess as to whether it will be a payoff to Quebec
Boeing, without any acknowledgement of 'Irony' ignores its subsidies from Japan and Washington State, takes advantage of US law and may well win
The aviation business will be the poorer if Boeing wins
The C-100 is an excellent plane while the MAX-700 is not

Very interesting, but I wish all those on BBD’s side good luck in convincing people that evidently don’t know that much about the industry and the roles the planes fill that Boeing is wrong.

”Just as Airbus years ago stole domestic market share and helped drive U.S. competitors Lockheed and McDonnell Douglas out of the commercial-airplane market by selling its subsidized aircraft at below-market prices, Bombardier has targeted Boeing,” the company stated in its petition.

I find this one very interesting. It really shows their attitude towards competition. Airbus didn’t steal market share, they won it with Aircraft Boeing, McDonnell Douglas, and Lockheed couldn’t compete with. I really don’t see what Airbus did to Lockheed or McDD that Boeing didn’t do to kill them off. Lockheed backed themselves out of the market and Boeing killed off McDD and the merged with them. This statement is not good as it makes them look as if they believe they are entitled to every order of aircraft in their home market, but it was acceptable to have other US manufactures get some because they were American and were weaker. Not only do I smell a little nationalism there, but it really makes them look as if they do not believe in free market or competition dispite selling so many aircraft overseas including airlines from Airbus’s home markets.

This is getting to broad from this topic but the fundamental question relates to Airbus back then and BBD now. Would either have been viable startups had they been forced to obtain commercially competitive financing and equity? The answer is fairly clearly no but is really a subject for another thread. The Airbus ship has long sailed. This one has not.

And I still say people are way over focused on the specifics of "competition" on specific routes. Ask two simple questions.

1. absent the C series option what does Delta buy (albeit maybe fewer aircraft and it just doesn't fly some routes).

2. If indeed the price is only possibly via government supported dumping would Delta have bought at a more appropriate price, whatever that is established to be.

I think the answer to those questions show you where one can claim damage. I think no one disputes the C Series best fits this particular set of missions at the price it was offered at. The question is should Delta be able to buy it at that price.

If Walmart replaces 10 foot step ladders built by a private company with 9 foot step stools sold to it more cheaply via a foreign government subsidy doesn't the manufacturer of the step ladders have a complaint? The products aren't 100% comparable but the damage is very real. And like two airplanes both serve a very similar purpose. We all know that absent government intervention BBD goes down and Delta buys 737 or A320 right? Saying there is no damage or people don't understand the industry is silly.

bigjku wrote:

1. absent the C series option what does Delta buy (albeit maybe fewer aircraft and it just doesn't fly some routes).

If the CS100 is slammed with 80% duties (or whatever), most probably the Embraer E195 E2 wins the contract (anyways, NOT Boeing).

The CSeries having more than 50% of US contents, ironically that would mean a net loss of US (+Canadian&UK) jobs!!!
(Moron court would be more appropriate here than Kangaroo...)

Wow, I really like the way the US treats it closest allies...

As the US treats China better, Quebec would just be better off selling its 49% stake to COMAC (and make a profit as it only paid 20 cents on the dollar).

Not sure how long the US would bully a Chinese CSeries... Also, future Chinese airliners would look so good with Belfast made CFRP wings (using the Resin Transfer Infusion method).

bigjku wrote:

1. absent the C series option what does Delta buy (albeit maybe fewer aircraft and it just doesn't fly some routes).

2. If indeed the price is only possibly via government supported dumping would Delta have bought at a more appropriate price, whatever that is established to be.

I think the answer to those questions show you where one can claim damage. I think no one disputes the C Series best fits this particular set of missions at the price it was offered at. The question is should Delta be able to buy it at that price.

And, could Boeing sell its planes for the prices it offers, were it not for Boeing's billions in tax break subsidies? Should Bombardier not be judged equally to Boeing?

I continue to stand by my position that the US anti-dumping legislation is poorly constructed, and far too easily abused for protectionist purposes. And indeed, given how much US business interest is involved in the CSeries, it seems to me that supporting Boeing's complaint is a bit cutting of the nose to spite the face.

Edited to add:

In today's globalized world, it's too late to turn back the clock. I don't think any of the major aircraft would want to return to a model where they are reliant exclusively on domestic engineering and manufacturing. By that same token, antiquated legislation should also go out the window. Anti-dumping legislation should exist, but it should actually do its job effectively and fairly. The complainant's subsidies should be equally considered as the those of the subject of the complaint.

Routes that are not sufficiently profitable to fly 373/320s will not fly without smaller but more efficient planes. Or to put it the other way, C-100s will enable routes otherwise not flown. Or passengers will have to pay more.

So much acrimony here, let's dial it down

First, understand the process. The first stage of the duty imposition is the easiest, because the applicant isn't required to prove the extent to which it has been. So duties will likely be imposed on Tuesday. Whether they take effect in whole or in part is another matter. For that, Boeing has to prove actual harm. And that second stage won't be decided until 2018, likely around the time of the first delivery to DL. So don't go all insane about the first ruling, although politicians on both sides of the border will turn up the noise level because there also are NAFTA talks next week. As a matter of fact, this will probably become woven into the fabric of the NAFTA negotiations.

Secondly, a ruling for duties doesn't mean that Delta cancels. There are a number of scenarios floating around, including one which turns contract over to an operating lessor which then places the planes with Delta. It's not quite as advantageous for Bombardier in particular, although it has cash flow benefits.

So you can all assume that next Tuesday's ruling is just the first stage in what promises to be year's worth of litigation.

Meanwhile, Jon Ostrower of CNN has a good synopsis of the story to date.

http://money.cnn.com/2017/09/22/news/co ... index.html

The Seattle dude has the right idea and why I think the long game is Boeing buying the C Series but first they have to get the price down. Can'5 developed two clean sheets at once if they want to introduce a MOM around 2025, much easier to further develop the C Series with 500 and 700 models.

sebring wrote:

So much acrimony here, let's dial it down.

Acrimony? Yes. Boeing's actions threaten the very existence of Bombardier, the first company to even possibly threaten the duopoly. From an economic standpoint, more competition would be good for everyone who isn't in the higher echelons of Boeing or Airbus. Every airline and every passenger stands to benefit. From an aviation lover's standpoint, a groovy new model is welcome, and I would be so sad to lose it. So yeah, I feel a little butt-hurt about the whole thing.

Just for the record, if the roles were reversed, and Bombardier was the big bully, I'd still be pulling for the underdog.

Boeing has requested the U.S. Department of Commerce to virtually double the potential tariff against the CSeries from 79.82% to 143.35%. Boeing says that Bombardier has been withholding information in order to "hide the true magnitude of their dumping".

Source: http://business.financialpost.com/trans ... estigation

CFM565A1 wrote:

StTim wrote:

I must say the direction this thread turned in has given me the best laugh in a long time.

Thanks

Who knew Bombardier was spelled A-I-R-B-U-S...

Well, Boeing likes to think of Bombardier as the new Airbus, and let's not forget that the "America first, America first" chant and mantra has deep roots among many a-net members. I suppose that a little national pride never hurts.

"In Bombardier fight, Boeing sees ghost of Airbus ascent" - Reuters [Tim Hepher, Alwyn Scott] (http://www.reuters.com/article/us-boein ... SKBN18I23L)

Two words underpin Boeing’s (BA.N) decision to launch a U.S. trade complaint against Bombardier (BBDb.TO), which plunged it into a row with Canada last week: “Never again”.

But decades after Boeing failed to prevent European upstart Airbus gaining momentum with early victories in the United States, people familiar with the company say the strategic importance of defending its core passenger jet business outweighs the diplomatic storm.

LockheedBBD wrote:

Boeing has requested the U.S. Department of Commerce to virtually double the potential tariff against the CSeries from 79.82% to 143.35%. Boeing says that Bombardier has been withholding information in order to "hide the true magnitude of their dumping".

Source: http://business.financialpost.com/trans ... estigation

oh Boeing are we being a bit dramatic there.

LockheedBBD wrote:

CFM565A1 wrote:

StTim wrote:

I must say the direction this thread turned in has given me the best laugh in a long time.

Thanks

Who knew Bombardier was spelled A-I-R-B-U-S...

Well, Boeing likes to think of Bombardier as the new Airbus, and let's not forget that the "America first, America first" chant and mantra has deep roots among many a-net members. I suppose that a little national pride never hurts.

"In Bombardier fight, Boeing sees ghost of Airbus ascent" - Reuters [Tim Hepher, Alwyn Scott] (http://www.reuters.com/article/us-boein ... SKBN18I23L)

Two words underpin Boeing’s (BA.N) decision to launch a U.S. trade complaint against Bombardier (BBDb.TO), which plunged it into a row with Canada last week: “Never again”.

But decades after Boeing failed to prevent European upstart Airbus gaining momentum with early victories in the United States, people familiar with the company say the strategic importance of defending its core passenger jet business outweighs the diplomatic storm.

Cannot argue with any of that

WaywardMemphian wrote:

The Seattle dude has the right idea and why I think the long game is Boeing buying the C Series but first they have to get the price down.

There is one problem with that theory, the people of Quebec and Bombardier's owners (also from Quebec) are a proud bunch. If Boeing makes them go into bankruptcy, you can guarantee that they'll first try to sell it to anyone besides Boeing. I'm sure COMAC wouldn't mind a piece of the North American/European pie. Additionally, Canadians weren't terribly fond of Boeing when they purchased de Havilland Canada for political reasons and dumped them a short time later:

Source: https://en.wikipedia.org/wiki/De_Havilland_Canada

The government claimed to have guarantees from Boeing not to discontinue any product lines, but shortly thereafter, Boeing discontinued both the successful Twin Otter and the Dash 7. The jigs and specialised equipment for their manufacture were destroyed.

Boeing was in heavy competition with Airbus Industrie for a series of new airliners for Air Canada, at that time a Canadian Crown corporation. Boeing used the DHC purchase to further strengthen their commitment to their shared production contracts. The contract was particularly contentious. When Air Canada announced that Airbus had won the contract in 1988, amid claims of bribery, Boeing immediately put DHC up for sale, placing the company in jeopardy.

Most importantly, I don't believe Boeing is even interested in the area that the CSeries occupies, they are just trying to prevent BBD from chipping away at the lower end of their product line, and they want to prevent BBD from potentially increasing their market share. Boeing and Embraer seem to be on good terms with each other and even cooperate in a few areas, so Boeing has nothing to worry about there.

If I lived in a fantasy world, Lockheed Martin would buy BBD instead (for a low price) and get back into the civil aviation industry, but we know that's never happening. I still have fond memories of Lockheed civil aircraft, too bad they decided to call it quits.

bigjku wrote:

This is getting to broad from this topic but the fundamental question relates to Airbus back then and BBD now. Would either have been viable startups had they been forced to obtain commercially competitive financing and equity? The answer is fairly clearly no but is really a subject for another thread. The Airbus ship has long sailed. This one has not.

And I still say people are way over focused on the specifics of "competition" on specific routes. Ask two simple questions.

1. absent the C series option what does Delta buy (albeit maybe fewer aircraft and it just doesn't fly some routes).

2. If indeed the price is only possibly via government supported dumping would Delta have bought at a more appropriate price, whatever that is established to be.

I think the answer to those questions show you where one can claim damage. I think no one disputes the C Series best fits this particular set of missions at the price it was offered at. The question is should Delta be able to buy it at that price.

If Walmart replaces 10 foot step ladders built by a private company with 9 foot step stools sold to it more cheaply via a foreign government subsidy doesn't the manufacturer of the step ladders have a complaint? The products aren't 100% comparable but the damage is very real. And like two airplanes both serve a very similar purpose. We all know that absent government intervention BBD goes down and Delta buys 737 or A320 right? Saying there is no damage or people don't understand the industry is silly.

Absent the CSeries, Delta would have most certainly turned to Embraer, the second best fit, but Boeing seeing that their plane is smaller and backed by a weaker economy they know it will never be close to a threat to them. Delta had been clear that they do not like the 737-700 whatsoever and only operate them for special performance. Their preferred size for the 737 is the -900ER. Perhaps the people at Bombardier in charge of selling the planes aren’t so great at making a case for their plane and have to sell them so cheap because the order really was theirs to lose as Delta seems to now think nothing else was as suitable. Considering your ladder example the 737-700 seats about 25% more than the CS100 and the will 737-7 seat about 40% more, so then we are comparing an overweight 10’ or 14’ ladder to a 7.5’ ladder and in Delta’s case they would be using the ladder in an indoor room that can fit one 7.5’ tall otherwise they have to spend more money to be able to use the larger ladders. Using the 737-7 and/or -700 for what they plan to use the CS100 for would just bleed money and not be profitable at all. In the event that BBD had somehow gone underneath before the order, Delta’s plan wouldn’t have changed, they wouldn’t suddenly be considering 140 seat jets for 100 seat missions, they would simply take their business to Embraer. You can claim all you want that is pointing out the little to no proof of Boeing being harmed in a sale they didn’t compete for and the people responsible for the ruling most likely not being very knowledgable in this specific industry, but we have every right to be sceptical until someone can prove that Delta was considering the 737 and the CS100 stole a potential order, and until the people in charge of the ruling see that Boeing was not competing for the order to be harmed by the sale we have all the reason in the world to question how much they know about the industry, and it does matter too. After all, you don’t go to the paediatrician when your teeth are having problems, they probably wouldn’t know enough about your problem to correctly fix it.

Delta's price tag for the planes isn't a mystery. It was disclosed as part of the ITC investigation but redacted from public documents reviewed by CNN. Two people familiar with the deal said each plane was in the "high $20 millions."

http://money.cnn.com/2017/09/22/news/co ... index.html

Now here's a bit of conjecture on my part: high 20 millions would be anywhere betweeen 27 and 29 imo. It is significantly higher than the 20 million that Boeing claims. If Bombardier's costs are 33 mil it is not as bad as Boeing alleges. In addition, if (and this is a big IF) that 33 mil includes development cost of around 6 mil per plane, that would essentially mean that Bombardier is actually selling at the marginal cost of production; this is economically efficient.

Over half the subsidy involved equity buying, maybe $2.5 billion. Was there any reason that Boeing did not or could not have been the buyer? Pocket change compared to deferred costs or even stock buy-backs. And would have solved the "what are we going to do about the 7" problem.

For those claiming that Boeing sees BBD as the next Airbus IMHO are being a little pretentious. BBD has made an over-engineered and overpriced plane; and one that, let's be honest about it, almost nobody is buying exactly for that very same reasons. Add to that their lousy production rate and you start to get the picture that they are not that very competent at all.

If you want to look at a real threat in the narrow body market, I'd look for certain plane racking up flight tests somewhere in Siberia in this very moment.

frmrCapCadet wrote:

Routes that are not sufficiently profitable to fly 373/320s will not fly without smaller but more efficient planes. Or to put it the other way, C-100s will enable routes otherwise not flown. Or passengers will have to pay more.

That is not how the domestic US market has functioned for the last three decades. The four largest carriers compete on frequency. DL is going to use the C-series to have more frequency in key markets than it would have using A320s or 737s, so the impact on how many dots are linked in the DL is not significant. As for passengers will pay more without it, it is possible passengers pay more with it: By increasing frequency, DL will have a more attractive product increasing market share. It can charge more for it.