chrisp390 wrote:

Any chance Boeing would go after COMAC who is receiving extensive government subsidies, or would that cause them to fall out of favor with the Chinese government, and potentially lose many sales? Ridiculous how the Chinese gov't can bully their way out of things like this while Canada gets taken advantage of by not aggressively standing up for these sort of trade issues.

What Candian airlines has ordered the C919? Answer: none. This means that Canda has no case for dumping since they do not have any standing. If the c919 somehow gets cert in Canada and if some Candian airline buys it, they would have a case if Comcac prices it well below the prices that Air China/others paid or if it is below the average cost of production for the program. I bet that this will happen at some point but not anytime soon

planes112 wrote:

Stitch wrote:

planes112 wrote:

The timing does not matter for dumping cases. The thing that matters is that they were paid less than the cost of production.

Well then a lot of things can be considered "dumping" with that metric - essentially anything sold below production cost for any reason.

I'm not an international finance and trade lawyer, but in the cases I have read about that involved accusations of dumping, they always involved a mature production line with known production costs that created product that was intentionally sold below said production costs to saturate a market and secure market share. Micron Technologies, for example, has filed multiple anti-dumping complaints with the US against established Japanese, Korean and Taiwanese DRAM manufacturers.

Boeing did not intentionally price their early 787 sales contracts below production costs because they had yet to build the thing so they didn't have a mature production line with known production costs and once they did have a mature line, the production costs had significantly exceeded the original projections due to all the re-work on the delivered frames. In addition, Boeing consistently raised 787 ASPs to help recover those additional costs. If they intended to dump 787s on the market to discourage customers from buying A330s and A350s, they would have continued to sell them at the original prices.

I am not a lawyer either but I am in a lot of meetings with them. While the traditional definition of dumping agrees with you (saturate market intentionally), the definition that counsel uses is price was below production.

Interesting tidbit from the report: Boeing projects that BBD will make just over 2000 CSeries jets (using all BBD numbers for the cost base of the estimate). I wonder if they will be able to meet that.

Not right now, they won't.

Boeing's maneuver is nothing less than an attempt to eliminate Bombardier from the marketplace. Forced to sell at above-market prices, BBD sales volume would of course be zero.

Anti-dumping laws were NOT designed to kill all new entries into monopoly sectors. All of them, because of scale issues, have a higher unit cost than Boeing when starting out - it would be wildly perverse to say that every new entrant violates anti dumping laws. There is no other way for a new entrant to exist.

chrisp390 wrote:

Any chance Boeing would go after COMAC who is receiving extensive government subsidies, or would that cause them to fall out of favor with the Chinese government, and potentially lose many sales? Ridiculous how the Chinese gov't can bully their way out of things like this while Canada gets taken advantage of by not aggressively standing up for these sort of trade issues.

Yet yet, but possibly after the C919 starts selling in significant numbers outside of China, assuming that happens - when the potential for lost sales outside of China outweighs the effect on future sales within China. Also, I have a hard time envisioning China simply refusing to authorize all their airline's requests to purchase Boeing aircraft if the latter file a complaint. They have to balance their desire to build up an aircraft manufacturing industry with their desire to maintain a competitive airline industry.

cheapgreek wrote:

surfdog75 wrote:

The point that Boeing is missing is the C series was by far the most capable aircraft in the category. Boeing doesn't even sell anything comparable to the size of CS 100. Also, new 73NGs, while great, use 70s and 80s technology in the name of keeping the same type rating for a few customers.

For a few customers? The 737 has done very well over the years and it manages for the most part to keep up with the A320 series minus the A321. Whether the 737MAX10 is ever produced and how close it comes to the A321, it remains to be seen. The 737 of today is much different than the first 737-100, engines,wings,etc have over the years been refined and thousands of sales to many airlines have made the 737 one of the most successful airliner production runs of all times.

A "few customers" (most notably SWA) forced Boeing to keep the old technology that's on board since they were still flying old model 737s and wanted to keep the same type rating for their pilots. Maybe a good short term decision for Boeing but short sighted in the long run when Airbus was updated their competing aircraft with advanced technology. The MAX seems to be making that same mistake in my opinion. Companies seeking to advance aviation should be encouraged. I understand the case for keeping a competitor from gaining a foothold but do it by making a superior product. Boeing seems to be mired in a serious lack of vision since the 787.

planes112 wrote:

iamlucky13 wrote:

More importantly, no dumping case can proceed without a determination of injury.

look at the conclusion of the report. The report that BBD has a dumping margin of 80.5%. This is the heavily redacted version and I am willing to bet that the 10x larger one dives into this one more. They cannot publically state their damages because it would give a super clear roadmap on the 737 pricing.

Personally, I would surprise to see this continue because Delta is going to be very pissed and the message is already delivered

That's Boeing's contention (I would wager starting with their most aggressive estimates). It would be up to the WTO to further evaluate it and decide if they agree. I assume the GATT gives them some authority for discovery beyond what Boeing has, and of course, Bombardier is going to challenge basically every claim Boeing made, starting with the claim that the 737 would have won the bid had the Cseries been priced higher. For clarity, I'm saying that is an argument claim Bombardier will make, not necessarily my own argument.

Regarding this might not continue, do you mean Boeing will not seriously press the case to avoiding irritating Delta too badly, or Bombardier won't offer similar future deals? Either or both seem credible to me.

iamlucky13 wrote:

planes112 wrote:

iamlucky13 wrote:

More importantly, no dumping case can proceed without a determination of injury.

look at the conclusion of the report. The report that BBD has a dumping margin of 80.5%. This is the heavily redacted version and I am willing to bet that the 10x larger one dives into this one more. They cannot publically state their damages because it would give a super clear roadmap on the 737 pricing.

Personally, I would surprise to see this continue because Delta is going to be very pissed and the message is already delivered

That's Boeing's contention (I would wager starting with their most aggressive estimates). It would be up to the WTO to further evaluate it and decide if they agree. I assume the GATT gives them some authority for discovery beyond what Boeing has, and of course, Bombardier is going to challenge basically every claim Boeing made, starting with the claim that the 737 would have won the bid had the Cseries been priced higher. For clarity, I'm saying that is an argument claim Bombardier will make, not necessarily my own argument.

Regarding this might not continue, do you mean Boeing will not seriously press the case to avoiding irritating Delta too badly, or Bombardier won't offer similar future deals? Either or both seem credible to me.

A bit of both. Boeing can't piss off delta too much given how delta is an important customer. At the same time, BBD and all potential customers will take note that boeing legal is watching them. I do not see too much benefit of them pressing it all the way through because Delta could pull a JetBlue - meaning get annoyed at BCA enough where they never order Boeing again (different circumstances but same principle)

I'm still having problems seeing Boeing's standing here. Boeing doesn't offer a direct competitor to the CS-100 or even the 300 at the present moment, so how can they claim any harm? They MAX-6 doesn't exist, the MAX 7 is significantly larger than both the 100 and 300. They offer nothing below that either. Any contention that Delta would have purchased 737s from them would be ludicrous. If anyone has any standing on this issue, it should be EMB with the 195E2. I'm not familiar enough with their financing deals with their local governments to comment on if they might have done the same thing in their same phase of development with the E175/195, but I dare say that in discovery, something might be dug up there as well.

Now, if Boeing was still even offering the possibility of the 717 being produced (not even having it currently in production, just a solid plan and proposal for reviving the line), they might have something to crow about, but, there's nothing there. If they had waited until the CS500 was on offer, then they could argue it vs. the max7. I would hope, by then, that the CS line would be more established and offer prices would be more competitive.

The lack of competitiveness of the C-Series is something defined by its design and technological choices:
- Low experience in critical technologies -> Too high investment/time
- Inadequate materials (expensive) to aircraft size -> Al-Li / CRP
- Small size -> Ignored the market trend of larger aircraft

In a less competitive market or with flawless execution Bombardier might have a chance. Today it has to appeal to dumping practices.

Newbiepilot wrote:

PlanesNTrains wrote:

planes112 wrote:

Again, the UA deal is super different. It is a US carrier buying from a US producer. Dumping laws do not apply because it is all within country

Has anyone shown that the UA deal was below their cost to produce them? They may have but I haven't seen it personally.

Bombardier took a forward loss when they made the Delta deal. That acknowledges that they were losing money. If Boeing sold an airplane that actually is a loss, that loss would show up somewhere. That UA 73G deal was aggressively priced, but I fully believe that there were some offsets against other businesses between United and Boeing in that deal that allowed it to not be sold at a loss. It probably was one of the smallest margin deals they have done, but it is not the same as what Bombardier did. Bombardier told the world they sold at less than cost.

Boeing accounting methods are based on selling at a loss now, against a certain number of future sales. Basically, they are going after BBD for using Boeing's own program accounting.

Besides, how exactly, does the cs100 compete with any Boeing product? Sure, Delta has CS300 options, (still smaller than Boeing's smallest...the 7.5max), but technically, options haven't been sold yet, so can't be included as part of the deal.

How about the first models of any airliners production run? How much did the first 787's cost to make? I doubt they were sold at a billion dollars each. How about the max? When do those billions get paid off?

What a pack of weenies, led by the great pumpkin himself.

If you can't compete with them, close them down. If you can't close them down, buy them.

Boeing needs to be careful, that either or both, are not acquired by existing competitors, who can demonstrate the costs of acquisition, depressed by Boeing's actions, as the new basis for even lower unit prices.

Perhaps Boeing is confident they will be making the acquisition.

JoeCanuck wrote:

What a pack of weenies, led by the great pumpkin himself.

This smells of desperation. Boeing is feeling the heat in the NB market. Nothing's going to come off it. We can keep kicking the can around at the WTO.

BBD should just ignore these clowns and just keep doing whatever it takes to sell the CSeries and launch the CS500. The product is an example of fine engineering and is smashing it in service.

Up yours Boeing

To save everyone the agony of reading the entire 147 page Petition (not to mention 158 Exhibits), this is Boeing's entire pricing analysis.

A comparison of Delta's quarterly financial reports from the first and second quarters of 2016 allows for a precise calculation of the price at which Bombardier has sold the CS100s to Delta. As shown in Exhibit 42, Tab 7, Delta's reported net change in total aircraft ordered in these two quarters indicates that the airline ordered aircraft from Airbus (A320s) and Bombardier (CS100s). Based on a review of aircraft delivery data from Ascend, a recognized industry source on aircraft orders and deliveries, as of March 2017, the only new aircraft scheduled for delivery to Delta in 2020 are 18 CS 100s ordered in April 2016. As shown in Exhibit 42, Tab 7, Delta's net increase in aircraft purchase commitments in 2020 from QI 2016 to Q2 2016 is equal to USO 420 million. Thus, the unadjusted per Aircraft price for the sale of the Bombardier CS100s to Delta is equal to USD 420 million/18 aircraft, or USO 23.3 million per aircraft. Based on information reasonably available to Boeing, estimated ancillary items have been deducted from the gross export price for the Aircraft, resulting in an ex-factory export price of USD 19.6 million.

Really compelling stuff. Rocket Science, really...

golfradio wrote:

JoeCanuck wrote:

What a pack of weenies, led by the great pumpkin himself.

This smells of desperation. Boeing is feeling the heat in the NB market. Nothing's going to come off it. We can keep kicking the can around at the WTO.

BBD should just ignore these clowns and just keep doing whatever it takes to sell the CSeries and launch the CS500. The product is an example of fine engineering and is smashing it in service.

Up yours Boeing

I actually don't fault Boeing for doing this. In business, you use whatever tool you have at your disposal to get ahead. That being said, this would be laughed at under any administration other than the great pumpkin's. His 'pandering to the lowest common denominator regardless of the facts', and 'punish them now even though we are in the wrong but by the time it goes to court it's too late for them', philosophies are going to hurt American business in the long run when long standing trading partners develop markets elsewhere.

His milk thing, for example. Right now, Canada is a net importer of US milk products...by a huge margin. So the reward for buying American, is that Canada gets punished if it also buys Canadian. US house prices rise significantly every time the US slaps duties on Canadian lumber...and the US still owes Canada billions in dollars in back duties that were collected then overturned.

Trump and the gang are going to make it cost effective for exporters to sell to markets a lot further away from the US, and when American businesses start to suffer, it may be too late for them.

Who really thinks Delta will buy max's if this deal gets overturned? In reality, this is a shot directly at holding off the CS500 for as long as possible. It one will compete directly with Boeing and will wreak havoc on their prices...already stifled by the 320neo.

Samrnpage wrote:

Typical American company. They can do all sorts, affect other companies financially, but when another foreign company does it vice versa, oh no thats not on.....

You don't seem to have been reading the news. This is stuff Boeing, Airbus, Bombardier and Embraer have done to each other in the past. Boeing is not starting anything new. Bombardier has started complaints about Embraer in the past. If a competitor was in exactly the same circumstances as Bombardier, they would be doing the SAME thing.

Now, if the C series is really awesome, why is it being sold at super low prices?

incitatus wrote:

Now, if the C series is really awesome, why is it being sold at super low prices?

Because Boeing was offering the 737 at super low prices.

incitatus wrote:

Now, if the C series is really awesome, why is it being sold at super low prices?

When AC and DL ordered them, it was not in service. Now that it is already proven to be a game changer and is beating specs in service, no one else is going to get the price.

WaywardMemphian wrote:

Boeing should fInd the billions to buy out Bombardier or at least the C-Series and produce the CS500 to replace the 737 lines and concentrate on new MOM to cover the tip end of the 737 line and the 5000nm unicorn.

I get the feeling that this was response not to that Delta order but one they think they are about to get. What if Southwest and it's Boeing fleet sudsy found itself with the C-Series in it's scheduling bag

Completely agree: the timing (nearly a year after the Delta deal and months after Embraer's complaint seems to suggest there is a considerable chance for them missing an American deal to BBD (United, Spirit, JetBlue?). At least, that was the first thing that came to my mind when I read about it. They're using all the cards they have to fend off BBD (which is by itself not completely strange..). Boeing has great products, but the 737 (including the Max...) is completely outdated and that highlights the pathetic part of this complaint.

I think the timing has a lot to do with the new guy in office, rather than a pending sale campaign...

It could be there is a deal about to close and Boeing is trying to insert some uncertainty into the market.

Wasn't the Boeing deal with Ryanair in 2001 an example of price dumping?

Wow, Boeing blocked the sale of CSeries to United by giving away 737-700's. And the sold them the 773 for cheap too. Remember Boeing, hmmm.

golfradio wrote:

When AC and DL ordered them, it was not in service. Now that it is already proven to be a game changer and is beating specs in service, no one else is going to get the price.

Absolutely, if oil prices stabilize around 55-57$. I would expect more orders.

Oh please. This is stupid. Boeing is mad because the lost an order for a 100 seater to BBD from DL. Maybe if Boeing hadn't ceased production of the 717, they wouldn't be having this "temper tantrum" Bombardier wanted to make a sale. DL told them what it would take and they met that. Get over it and move on. I seem to remember that UA was laughing all the way to the bank with the 73G order.. And got a good price on the 777 from what I understand as well. So its ok for Boeing to do it but as soon as Bombardier does it, it becomes wrong? I think Boeing just needs to grow up. Manufacturers always undercut the others to make a sale. Its not unheard of. I must confess I'm sure of what this "price dumping law" is but it sounds like government overreach to me. Just my two cents worth.

wrongwayup wrote:

I think the timing has a lot to do with the new guy in office, rather than a pending sale campaign...

And they heard the reports of "that guy" having to call General Flynn at 3am to ask if a strong dollar or weak dollar is good for exports and freaked out realising they are going to have a hard time selling airplanes to foreigners in the future. Hurt the competition now they must have figured.

So, per Boeing's logic, it's OK to sell 737s at dumping price. But if Bombardier does the same for CSeries, it's "unfair", "unjust", "not right"...

Yeah. Right.

Pot. Kettle. Black.

Go Bombardier! Fight the fight!

BlueSky1976 wrote:

So, per Boeing's logic, it's OK to sell 737s at dumping price. But if Bombardier does the same for CSeries, it's "unfair", "unjust", "not right"...

Yeah. Right.

Pot. Kettle. Black.

Go Bombardier! Fight the fight!

Bombardier does not have too much to fight with. The CRJ series moves a few 700's and 900's yearly, the Q400 is on life support and with Embraer,Mitsubishi,etc having similar sized aircraft, the fields are not that green. No one knows what Boeing sold those 737's to UA for, and considering how the 737's production costs have dropped over the years where Bombardiers costs are high, the two deals cannot be compared. Airbus and Boeing will not stand still and lose market share and the talk of a CS-500 is way premature.

Planesmart wrote:

Because Boeing was offering the 737 at super low prices.

If Boeing was price dumping Bombardier would be trying to file exactly the same type of complaint against Boeing. They are not, so you are wrong.

BBD have numerous counter arguments.

1. Sold to Air Canada at a loss. (Any price differences will be explainable with different ins and outs to the deals.)
2. Getting Delta TechOps onboard with the CSeries is worth selling frames to Delta at a loss due to the confidence it gives the market.
3. Numerous 787s were sold into foreign markets below build cost - there is likely to be a difference in price between 787s sold to All Nippon and American (or United) - for launch customer arguments, see point (2). BCA's accounting methods hides the losses on these builds - which is a fault of the accounting methodology not BBD.

Loss leader sales happen all the time across the world across many markets.


Looks more like an attempt to introduce doubt into the market. I wonder are BBD about to announce a significant sale of CSeries?

incitatus wrote:

Planesmart wrote:

Because Boeing was offering the 737 at super low prices.

If Boeing was price dumping Bombardier would be trying to file exactly the same type of complaint against Boeing. They are not, so you are wrong.

As has happened with every softwood lumber dispute, filing isn't the same as right. The US still owes Canada billions of dollars from taxes and fees they collected from extra fees and taxes they imposed, but were overturned on appeal.

Boeing doesn't even have a dog in this fight. They don't have a plane that competes with the CS100 at any level. In fact, Boeing couldn't sell their close to CS300 sized aircraft, so they had to upsize their -7 to a -7.5...which lessens any direct comparison even further.

In fact, you would be hard pressed to come up with any direct competition with Boeing in which BBD came out a winner.

Still, you have to hand it to Boeing to take the long view and use any means necessary to try and kill off a potential competitor, before it becomes a real competitor. I guess they have learned some lessons from Airbus after all.

A couple people have mentioned that Boeing would have a stronger case if they still produced the 717. I disagree. The only thing really comparable between the 717 and CSeries is size.

The 717 can't do much more than about 3 hours. After that it quickly runs out of fuel capacity and weight. It's a 1,500 nm airplane with 1960s wings and 1990s engines.

The CS-100 is a 3,000 mm airplane with the latest in aerodynamics, materials, and engines. It is a far more capable aircraft than the 717, and I think it could easily be argued that those capabilities mean the two are not direct competitors.

b747400erf wrote:

Timber is not related to NAFA and President Trump wanted his name in the papers, he has no power to negotiate NAFTA.

Whatever you do, don't quit your day job for those US political analysis ideas.

surfdog75 wrote:

[ Boeing seems to be mired in a serious lack of vision since the 787.

It's not lack of vision, it's lack of money and options. They can't invest huge sums in the MAX now because it won't have time to pay off before they need to invest in the clean sheet narrowbody. They are stuck with the 737NG shortcomings and it didn't allow them to quickly/easily compete with the NEO, especially the 321neo. They have to pay for the 787 mess somehow as well.

I don't see it as vision. I see it as Boeing's unfortunate reality.

BlueSky1976 wrote:

So, per Boeing's logic, it's OK to sell 737s at dumping price. But if Bombardier does the same for CSeries, it's "unfair", "unjust", "not right"...

Yeah. Right.

Pot. Kettle. Black.

Go Bombardier! Fight the fight!

Which 737s were sold at "dumping prices"? I'm just trying to keep track in a thread laced with emotion.

Beatyair wrote:

Wow, Boeing blocked the sale of CSeries to United by giving away 737-700's. And the sold them the 773 for cheap too. Remember Boeing, hmmm.

In addition to the long list of initial 787-8's sold below cost price. Quite the hypocrisy from Boeing... but then again BBD, Airbus, Embraer all do the same thing. It's all part of dealing with the competition. BBD needs to fight back

They have to prove dumping not loss leading. Good luck to them on that.

Let's not forget that the ExIm bank provides subsidized funding for Boeing to export airplanes at below market rates to foreign customers. Boeing is overwhelmingly the beneficiary of ExIM. A/K/A "the bank of Boeing". This winds up with Air India getting 777s they never would have qualified for- and driving US carries off of routes, e.g. JFK-DEL (DL). Even EK is not too proud to take the subsidy. If DL got a good deal thanks to Canadian support for their manufacturer, so be it.

Alias1024 wrote:

A couple people have mentioned that Boeing would have a stronger case if they still produced the 717. I disagree. The only thing really comparable between the 717 and CSeries is size.

The 717 can't do much more than about 3 hours. After that it quickly runs out of fuel capacity and weight. It's a 1,500 nm airplane with 1960s wings and 1990s engines.

The CS-100 is a 3,000 mm airplane with the latest in aerodynamics, materials, and engines. It is a far more capable aircraft than the 717, and I think it could easily be argued that those capabilities mean the two are not direct competitors.

I agree.. The C-Series as a whole is a lot more capable aircraft than the 717. But it seems to me that when you're looking at narrowbody aircraft, especially ones that are only marginally larger than a regional, the thing that matters to the airlines is seat count. I don't believe that Delta is choosing the C-Series for its range, but rathers its size as an economical 100-ish seat aircraft. That is the current role that they utilize the 717 in is it not? I don't believe that range because as you stated, the 717 isn't much use past 1,500nmi, so you're not going to see it on ATL-PDX, and even though the C-Series COULD do that, I don't see it being utilized for that role either. Again, just my two pennies worth.

mham001 wrote:

b747400erf wrote:

Timber is not related to NAFA and President Trump wanted his name in the papers, he has no power to negotiate NAFTA.

Whatever you do, don't quit your day job for those US political analysis ideas.

NAFTA's creation had been to remove tariffs from trade, something the lumber industry does not have. The only portion of NAFTA used is the trade dispute panel and general anti-dumping rules.

A President does not have the power to negotiate a treaty or agreement signed by Congress unless they grant him authority.

Don't quit your day job.

GatorClark wrote:

Alias1024 wrote:

A couple people have mentioned that Boeing would have a stronger case if they still produced the 717. I disagree. The only thing really comparable between the 717 and CSeries is size.

The 717 can't do much more than about 3 hours. After that it quickly runs out of fuel capacity and weight. It's a 1,500 nm airplane with 1960s wings and 1990s engines.

The CS-100 is a 3,000 mm airplane with the latest in aerodynamics, materials, and engines. It is a far more capable aircraft than the 717, and I think it could easily be argued that those capabilities mean the two are not direct competitors.

I agree.. The C-Series as a whole is a lot more capable aircraft than the 717. But it seems to me that when you're looking at narrowbody aircraft, especially ones that are only marginally larger than a regional, the thing that matters to the airlines is seat count. I don't believe that Delta is choosing the C-Series for its range, but rathers its size as an economical 100-ish seat aircraft. That is the current role that they utilize the 717 in is it not? I don't believe that range because as you stated, the 717 isn't much use past 1,500nmi, so you're not going to see it on ATL-PDX, and even though the C-Series COULD do that, I don't see it being utilized for that role either. Again, just my two pennies worth.

Seat count is only part of the equation. There isn't an airline out there that knows the ins and outs of the 717 better than Delta...so if they wanted the ones Boeing claims to be flogging, I'm sure they would buy them...despite the deal with BBD.

Eventually, though, you reach a point of diminishing returns where a cheap purchase price can't make up for expenses incurred due to age and usage. Maybe the units Boeing has are little better than parts bins...but regardless, there are plenty of good reasons why Delta may have reached the saturation point in relation to the 717.

Boeing has to prove BBD was dumping and that it was harmed by that dumping. In a saner world, this would be laughed out of court, but in the America uber alles reality of today, sense isn't all that common.

parapente wrote:

I imagine that it's a 'shot across their bows' by Boeing to ensure that the Delta deal is the last one conducted in that manner.

Hell, they push it far enough, then you can take out the last three words in that quote. At least for a time.

Really not sure why they're doing this against the world's 2nd largest carrier, and one of their major customers.

AA737-823 wrote:

I suspect that this exact incident is how we know that Bombardier has a formidable product. If it were a turd, Boeing wouldn't care about it.

My thoughts as well. They see a threat in this aircraft, and the easiest way to confront it for now is to attack its production capabilities, not operational capabilities. The latter would require actual effort.

planes112 wrote:

Because boeing obviously never sold under the cost of production for the dreamliner. Ever

alasizon wrote:

planes112 wrote:

Because boeing obviously never sold under the cost of production for the dreamliner. Ever

Or the UA 73G order.

Where there are extreme discounts to bag a highly desirable customer / cost of production is not met on launch customer deals or early production frames, I guess all the OEM's are "guilty". As I understand things, production breakeven is not expected before hundreds of frame have been assembled ie all those early frames were sold at a loss. What to do? Should Airbus have tried selling the first A380 for $500 million to cover production costs? Or Boeing $400 million for the first B787 to do the same?

art wrote:

planes112 wrote:

Because boeing obviously never sold under the cost of production for the dreamliner. Ever

alasizon wrote:

planes112 wrote:

Because boeing obviously never sold under the cost of production for the dreamliner. Ever

Or the UA 73G order.

Where there are extreme discounts to bag a highly desirable customer / cost of production is not met on launch customer deals or early production frames, I guess all the OEM's are "guilty". As I understand things, production breakeven is not expected before hundreds of frame have been assembled ie all those early frames were sold at a loss. What to do? Should Airbus have tried selling the first A380 for $500 million to cover production costs? Or Boeing $400 million for the first B787 to do the same?

look again how boeing calculated the cost of product for BBD - they took the (total fixed costs (5.4 billion) + variable cost for making 2085 planes)/2085. It was the average cost of the plane for the entire program, not the early frames.

*Embraer gets the popcorn and seats waiting the show to start.

planes112 wrote:

look again how boeing calculated the cost of product for BBD - they took the (total fixed costs (5.4 billion) + variable cost for making 2085 planes)/2085. It was the average cost of the plane for the entire program, not the early frames.

So what...

How many times have Boeing adjusted the 787 accounting block now?

chrisp390 wrote:

Any chance Boeing would go after COMAC who is receiving extensive government subsidies

The Chinese government would have a good laugh.

Amiga500 wrote:

planes112 wrote:

look again how boeing calculated the cost of product for BBD - they took the (total fixed costs (5.4 billion) + variable cost for making 2085 planes)/2085. It was the average cost of the plane for the entire program, not the early frames.

So what...

How many times have Boeing adjusted the 787 accounting block now?

I was pushing back on him for saying that they are going after bbd for the high of cost production of the early frames when in reality they are getting the average of cost of production for the program

im not going to comment that much more on 787 costs because of an nda agreement.

Accounting block is always assumed to increase over time in a newer model. IIRC, it is the minimum number of planes that will be built in the next several years. The 787 accounting block is not in peril (many orders expected in the future), but the 748 block is highly uncertain.

Bombardier needed to sell its products at a loss to a major airline in order to gain credibility and prestige for its CSeries program. It is not in the business to continue to make losses by continuing to sell its products below cost. In addition, Bombardier is going to make substantial profits in after sales products, services and support negating much of the loss it sold its initial planes for. The government would not continue to fund the CSeries program if its business plan showed continual losses for each plane produced in perpetuity.

b747400erf wrote:

mham001 wrote:

b747400erf wrote:

Timber is not related to NAFA and President Trump wanted his name in the papers, he has no power to negotiate NAFTA.

Whatever you do, don't quit your day job for those US political analysis ideas.

NAFTA's creation had been to remove tariffs from trade, something the lumber industry does not have. The only portion of NAFTA used is the trade dispute panel and general anti-dumping rules.

A President does not have the power to negotiate a treaty or agreement signed by Congress unless they grant him authority.

Don't quit your day job.

I beg to differ. Congress doesn't negotiate treaties, the president does.

Article II, Section 2, Clause 2 of the United States Constitution, includes the Treaty Clause, which empowers the president of the United States to propose and chiefly negotiate agreements, which must be confirmed by the Senate, between the United States and other countries, which become treaties between the United States and other countries after the advice and consent of a supermajority of the United States Senate.

The SCOTUS has on more than one occasion declined to go against sitting presidents breaking of treaties. Becuase there is no precedent there's really nothing stop a president from breaking a treaty.He at most may have to notify the senate. However, NAFTA is not a treaty by definition. It is an international agreement. On the US side of things, it was written into federal law by congress. Only congress may change it. If NAFTA was implemented as a treaty then it would be different

planes112 wrote:

I was pushing back on him for saying that they are going after bbd for the high of cost production of the early frames when in reality they are getting the average of cost of production for the program

I know. Boing are saying Bombardier's sale to Delta is significantly below their estimated final average production price.


But if Boeing were to take the 787 average production build cost on their initial counting block size, it'd be something farcical like double their initial estimated average build cost.
We've seen they have expanded the accounting block several times, allowing them to hide the "non cost" reductions as they've crawled along the learning curve.

All BBD would have to do is turn around and say we intend to build more than 2000 CSeries (they could even expand this to include not just CS100/CS300). Its too nebulous to tie down - anyone could show numbers that can swing any direction - with Bombardier citing Boeing's latest as a prime example!

Jetsouth wrote:

Bombardier needed to sell its products at a loss to a major airline in order to gain credibility and prestige for its CSeries program.

They are also getting Delta Tech Ops on board.

That in itself is a substantial intangible benefit.