SomebodyInTLS wrote:

washingtonflyer wrote:

BlueSky1976 wrote:

This is going to bite boeing in the @$$ BIG TIME. It's now Canada's turn: here's to the 220% tarriff on all 737s, 777s and 787s bought by WestJet, Air Canada and Air Transat.

Bombardier still has the rest of the world. Keep up good job, my fellow Canadians, don't give in to the idiots south of your border - Boeing included.

This is just stupid. No Canadian producer manufactures an equivalent to the 787 or 777 so you can't have injury when no domestic industry exists to seek duties.

If I understand correctly, according to the WTO rules they could impose tariffs on anything they like as a countermeasure if they won this type of proceedings... time to file a case there?

No. Retaliatory measures are not permitted unless the WTO would approve them - after about 5 to 7 years of litigation through the dispute panel and the appellate body.

Amiga500 wrote:

washingtonflyer wrote:

But the Commission found that there was overlap, and several importers agreed that there was overlap.

What importers?

The commission has demonstrated through its actions it is not qualified to judge on the aerospace market.

The CS100 has a nominal seat count of 110, the 737-7 has a nominal seat count of 138 = 25% bigger. Does that mean if there were a scope clause court case, with an airline operating a 100 seat aircraft instead of 76 seats, the union complaint would be chucked out because the court deems them to overlap?

And what is the scope of the investigation - 100 to 150 seat aircraft. You just conceded overlap.

Amiga500 wrote:

washingtonflyer wrote:

I know you vehemently disagree with the decision that the ITC made in the prelim, so please feel free to call Covington and Burling in DC (BBD's counsel) and advise them of your opinion. I'm sure they've not thought about it.

I wouldn't waste my breath. The idiocy and arrogance of those in the legal profession know no bounds.

I'm sure you could do a better job, right? Tell me about your law degree.

washingtonflyer wrote:

OK, cite me the law.

You've misread him. This part he agrees with you, the but then moves it on to an international court which might not view it the same.

Trade wars result in chaos on all sides...Bigly.

washingtonflyer wrote:

Amiga500 wrote:

washingtonflyer wrote:

But the Commission found that there was overlap, and several importers agreed that there was overlap.

What importers?

The commission has demonstrated through its actions it is not qualified to judge on the aerospace market.

The CS100 has a nominal seat count of 110, the 737-7 has a nominal seat count of 138 = 25% bigger. Does that mean if there were a scope clause court case, with an airline operating a 100 seat aircraft instead of 76 seats, the union complaint would be chucked out because the court deems them to overlap?

And what is the scope of the investigation - 100 to 150 seat aircraft. You just conceded overlap.

A handy scope for Boeing - yet completely irrelevant to airline operations.

Once again, demonstrating how ignorant the court are to the running of commercial airlines. Do you want me to break out crayons to make this simpler?


I note also that you have not commented on effectively a 76 seat aircraft = 100 seat aircraft in the courts eyes, do you agree that they are the same, if not, why not?

washingtonflyer wrote:

I'm sure you could do a better job, right? Tell me about your law degree.

I don't have a law degree and have no wish to ever go looking for one.

This case is yet another demonstration that much of the legal system is not fit for purpose.

washingtonflyer wrote:

SomebodyInTLS wrote:

washingtonflyer wrote:

This is just stupid. No Canadian producer manufactures an equivalent to the 787 or 777 so you can't have injury when no domestic industry exists to seek duties.

If I understand correctly, according to the WTO rules they could impose tariffs on anything they like as a countermeasure if they won this type of proceedings... time to file a case there?

No. Retaliatory measures are not permitted unless the WTO would approve them - after about 5 to 7 years of litigation through the dispute panel and the appellate body.

That is when you bother about what the WTO thinks. The USA has not a proud history in bothering what international organisations think. Why should the USA than expect others to respect international agreements?

Have a look at the soft wood dispute between the USA and Canada, I do not see the WTO decision there, only NAFTA was invoved. I also do not see the WTO case regarding the C series allowing the USA to put the 219% tax/duty on those products.

IF Canada is putting retaliatory duties on USA produced aircraft and than the USA can go to the WTO, takes, as you say, 5 to 7 years to get a decision.

I suppose the following will happen:

1: Canada will dump the F-18E/F order and completely bury the F-35 as well. Both will be replaced by either Rafael or Typhoon orders
2: Canada will impose a similar tariff on all Boeing products, including spares and support, forcing AC to cancel their Max order and dump their 77s. Westjet will likewise dump their 737s in favour of A32X.
3: The UK, following Brexit, might also impose huge tariffs on any and all Boeing products and services, effectively forcing BA to dump Boeing in favour of, well, BBD and Airbus products
4: Nations around the world will become vary of trading with the US, not just in aviation but in all trades. This could lead to a massive order slump for American companies who rely on export for all or parts of their sales.

Congratulations Boeing: You pointed a double-barrelled shotgun at both your feet and let rip.

The list price of a CS100 is $76.5 million. The list price of a 737-700 is $80.6 million. With a 219% duty, the CS100 is now going to cost $244 million (at list prices). Obviously the CS100 does not stand a chance in the US if these duties remain. A 737-700 will be a bargain in comparison.

F9Animal wrote:

I also hope Air Canada and West Jet turns it's backs on Boeing. This modern day mafia of a company makes me sick.

Air Canada is a private company, I'm sure they don't care that much.

In an alternate reality, the Canadian gouvernement would propose an import tariff on Boeing products. Then Air Canada would automatically walk away from Boeing aircraft as those products would become too expensive.

That of course won't happen.

KarelXWB wrote:

F9Animal wrote:

I also hope Air Canada and West Jet turns it's backs on Boeing. This modern day mafia of a company makes me sick.

Air Canada is a private company, I'm sure they don't care that much.

In an alternate reality, the Canadian gouvernement would propose an import tariff on Boeing products. Then Air Canada would automatically walk away from Boeing aircraft as those products would become too expensive.

That of course won't happen.

Why not? The CS100 decision in the USA opens up the alternative reality.

Perhaps the Canadian Government should immediately impose a similar tariff for the imports of Boeing products. This would hurt Boeing immensely, as the first of AC's very large order of 737's is expected to be delivered very shortly. Also, I believe Westjet has a large order outstanding for Boeing 737's

washingtonflyer wrote:

kelvin933 wrote:

washingtonflyer wrote:

Not dumping if it was a sale by a US company to a US customer.

Try defending this position before a NAFTA panel or a WTO panel, the results are unlikely to be pretty.

I'm sorry but what you are saying is impossibly stupid. The WTO panel hears disputes regarding -international- trade matters (as does the NAFTA panel). A sale by a U.S. manufacturer to a U.S. customer is not subject to the jurisdiction of the WTO or the NAFTA panel.

Really, Embraer has filed a complaint on the sale of CSeries jets by Bombardier to Air Canada both Canadian corporations and yet Embraer considers themselves to be an injured party and filed a case at the WTO.

washingtonflyer wrote:

I'm sorry but what you are saying is impossibly stupid. The WTO panel hears disputes regarding -international- trade matters (as does the NAFTA panel). A sale by a U.S. manufacturer to a U.S. customer is not subject to the jurisdiction of the WTO or the NAFTA panel.

I think you misunderstood him. He isn't saying that Canada will take Boeing's deal with UA to the WTO, he's saying should an appeal make it to the WTO, they will likely take into account the actions taken previously by Boeing, which include price dumping themselves, which is legal in the US yes... but doesn't mean its not price dumping.

Now, my International Law is rusty, but going on memory, the WTO have an obligation to ensure fair trade is accounted for in any ruling they make, which in this case, is hard to justify considering Boeing received an $8bn tax break, on top of the dumping with the UA order.

And while your asking about law degrees, LLB (Hons) Bachelor of Laws, if you want to call my college to verify that I'll give you the number, its in Ireland... we tend to do education quite good here

Amiga500 wrote:

washingtonflyer wrote:

Amiga500 wrote:

What importers?

The commission has demonstrated through its actions it is not qualified to judge on the aerospace market.

The CS100 has a nominal seat count of 110, the 737-7 has a nominal seat count of 138 = 25% bigger. Does that mean if there were a scope clause court case, with an airline operating a 100 seat aircraft instead of 76 seats, the union complaint would be chucked out because the court deems them to overlap?

And what is the scope of the investigation - 100 to 150 seat aircraft. You just conceded overlap.

A handy scope for Boeing - yet completely irrelevant to airline operations.

Yes, but its the domestic industry that defines the scope. You're also forgetting that the scope involved a range limitation - 2900 or 2950 miles IIRC.

So, not quite so irrelevant.

Amiga500 wrote:

Once again, demonstrating how ignorant the court are to the running of commercial airlines. Do you want me to break out crayons to make this simpler?

The burden of demonstrating the difference is up to BBD's lawyers. Remember, I mentioned upthread, you had BBD's lawyers and Delta's lawyers contradicting each other right in front of the Commission staff. Those contradictions were not lost on the Commission staff.

Amiga500 wrote:

I note also that you have not commented on effectively a 76 seat aircraft = 100 seat aircraft in the courts eyes, do you agree that they are the same, if not, why not?

Because its not relevant to the current case. Boeing doesn't make an aircraft under 100 seats.

mjoelnir wrote:

KarelXWB wrote:

F9Animal wrote:

I also hope Air Canada and West Jet turns it's backs on Boeing. This modern day mafia of a company makes me sick.

Air Canada is a private company, I'm sure they don't care that much.

In an alternate reality, the Canadian gouvernement would propose an import tariff on Boeing products. Then Air Canada would automatically walk away from Boeing aircraft as those products would become too expensive.

That of course won't happen.

Why not? The CS100 decision in the USA opens up the alternative reality.

Jetsouth wrote:

Perhaps the Canadian Government should immediately impose a similar tariff for the imports of Boeing products. This would hurt Boeing immensely, as the first of AC's very large order of 737's is expected to be delivered very shortly. Also, I believe Westjet has a large order outstanding for Boeing 737's

You guys are looking at it strictly from a manufacturer's perspective. Yes imposing the tariff on the Boeing aircraft would hurt Boeing in Canada...but in doing so the Canadian government will have also just screwed over both AC and Westjet. Both airlines would now have very expensive jets on order with delivery imminent. You think Airbus is going to give them sweetheart deals to deliver last minute planes at very low prices? No, Airbus will take them to the cleaners because it would still end up cheaper than the Boeing jets with high tariffs.

So yeah...impose the tariffs to punish Boeing. Can use the money collected to help bail out Westjet and AC when they start struggling because they are overpaying for their jets vs their competition.

RRTrent wrote:

washingtonflyer wrote:

I'm sorry but what you are saying is impossibly stupid. The WTO panel hears disputes regarding -international- trade matters (as does the NAFTA panel). A sale by a U.S. manufacturer to a U.S. customer is not subject to the jurisdiction of the WTO or the NAFTA panel.

I think you misunderstood him. He isn't saying that Canada will take Boeing's deal with UA to the WTO, he's saying should an appeal make it to the WTO, they will likely take into account the actions taken previously by Boeing, which include price dumping themselves, which is legal in the US yes... but doesn't mean its not price dumping.

Boeing's deal to United is irrelevant. The question relates to what has BBD done in the U.S. market. BBD has been found (preliminarily) by the USDOC to have been the recipient of massive subsidies from the GOQ and the GOC. How is a sale between one US company and another US company relevant to that?

RRTrent wrote:

Now, my International Law is rusty, but going on memory, the WTO have an obligation to ensure fair trade is accounted for in any ruling they make, which in this case, is hard to justify considering Boeing received an $8bn tax break, on top of the dumping with the UA order.

I hear this "Boeing received tax breaks" issue. May or may not be true. But if the only argument is that "the other guy got tax breaks too", then one cannot complain when one body finds that the programs in question of BBD were subsidies.

kelvin933 wrote:

washingtonflyer wrote:

kelvin933 wrote:

Try defending this position before a NAFTA panel or a WTO panel, the results are unlikely to be pretty.

I'm sorry but what you are saying is impossibly stupid. The WTO panel hears disputes regarding -international- trade matters (as does the NAFTA panel). A sale by a U.S. manufacturer to a U.S. customer is not subject to the jurisdiction of the WTO or the NAFTA panel.

Really, Embraer has filed a complaint on the sale of CSeries jets by Bombardier to Air Canada both Canadian corporations and yet Embraer considers themselves to be an injured party and filed a case at the WTO.

You're conflating trade disputes. The dispute by Embraer was a subsidy claim, not a dumping claim.

UK Government now weighing in because of BBD jobs in Northern Ireland

http://www.bbc.co.uk/news/uk-northern-ireland-41397181

This could backfire on Boeing big time.

Boeing may want a level playing field here, but they did'nt bother about that when the US tanker order was "re-assigned".

One little wrinkle that folks should be aware of......The USITC's preliminary determination was a threat determination - not injury. What that means is that the USITC found that there was no reasonable basis to believe that the domestic industry is -currently- harmed by imports. That determination was made using a very low standard of assessment.

The USITC will get to revisit the matter in the final phase. If, and this is a BIG if, the USITC goes affirmative in its final determination, you can be 98% sure that the USITC would find threat again. After all, if the USITC could not find current injury in a preliminary phase, the likelihood of the USITC finding injury in the final phase is very small. In all my years doing this, Ive think Ive seen it once - and that case involved some rather extraordinary circumstances.

The effect of this is that duties that get paid between now and, say, next January or February will be refunded, and cash deposits (new duties) would not go into effect until the USITC issues its final determination.

A little nuanced piece of US trade and customs law.

Of course, we have to get to an affirmative final for that to happen.....

rubiohiguey wrote:

BlueSky1976 wrote:

This is going to bite boeing in the @$$ BIG TIME. It's now Canada's turn: here's to the 220% tarriff on all 737s, 777s and 787s bought by WestJet, Air Canada and Air Transat.

Bombardier still has the rest of the world. Keep up good job, my fellow Canadians, don't give in to the idiots south of your border - Boeing included.

Agreed

As a Canadian taxpayer I'm offended by the fact that BBD does get bailed out all the time and the Government Suppports it endlessly through tax incentives. But as the same goes for Boeing there is massive hipocracy in what Boeing is trying to do and it makes me really mad. If Boeing had never taken a nickel of Government Support I would agree with their stance, but they seem to have made it an art form on how to get Billions in tax breaks to support new programs.

I'm all for Canada slapping the 220% duty on all Boeing products imported to Canada - however if I were Trudeau I would then turn around and give all the money to Planned Parenthood Organizations around the World....

I would also then say FU Boeing and work with Westjet, Transat and AC to cancel all there Boeing contracts, fund the development of the CS500 and a bigger wing CS500ER/700 (maybe in partnership with Airbus to replace the low end of the A320 Range) and become a Partner on Airbus's response to the Boeing MOM.

This is absolute BS.

CX747 wrote:

Glad to see some progress made against illegal subsidies. I'm sure Boeing calculated the long term risk and went forward. You can't allow another company to get it's place at the table with government backing like Airbus.

Overall, Air Canada and Westjet are private entities. The government shouldn't be involved with what they order. Same goes for British Airways. All three carriers should continue to purchase Boeing because they are free of government intervention correct????????????

It's a new day and maybe, just maybe commercial aviation can take a step back towards being commercial not government sponsored.

Were it not for Airbus, Boeing would be charging today some ridiculously high prices. Thank God for Airbus and government subsidies it received in the beginning. Somehow I do not see Airbus or the Russians or the Chinese complaining about Bombardier, it's only Boeing singing a solo.

Will this affect the DL order? will now DL need to be looking at canceling that order and look for other aircraft? Are previous orders subject to these tariffs? I can't imagine this will seat well with DL and also for any top-off orders that they might need...

washingtonflyer wrote:

Boeing's deal to United is irrelevant. The question relates to what has BBD done in the U.S. market. BBD has been found (preliminarily) by the USDOC to have been the recipient of massive subsidies from the GOQ and the GOC. How is a sale between one US company and another US company relevant to that?

You cant measure international trade relations against local law. Boeing used price dumping to cut BBD out of a deal with UA. That may have no relevance according to local law, but it has relevance when you look at trade agreements and those arbitration systems.

washingtonflyer wrote:

I hear this "Boeing received tax breaks" issue. May or may not be true. But if the only argument is that "the other guy got tax breaks too", then one cannot complain when one body finds that the programs in question of BBD were subsidies.

One has to ignore quite a lot, even the Seattle Times, to not know that Boeing is receiving tax breaks.

morrisond wrote:

I would also then say FU Boeing and work with Westjet, Transat and AC to cancel all there Boeing contracts, fund the development of the CS500 and a bigger wing CS500ER/700 (maybe in partnership with Airbus to replace the low end of the A320 Range) and become a Partner on Airbus's response to the Boeing MOM.

Airbus is not going to get involved with the Canadian government/this mess and certainly does not need BBD's help with anything.

Just because the Canadian government are in a dispute with Boeing/the US doesn't mean they automatically have full EU (which, remember, will soon not include the UK)/Airbus support. If the Canadian government start funding CS500s and CS700s for BBD, which directly competes with Airbus's bread and butter A320/A321, you are going to see EU/Airbus get annoyed and go after BBD/Canada too.

Were it not for Airbus, Boeing would be charging today some ridiculously high prices. Thank God for Airbus and government subsidies it received in the beginning. Somehow I do not see Airbus or the Russians or the Chinese complaining about Bombardier, it's only Boeing singing a solo.

Airbus is not going to complain because they already have Boeing doing the dirty work for them. Russia/China are not going to complain because they are/plan on building their own commercial aviation industries with government support.

B777LRF wrote:

I suppose the following will happen:

1: Canada will dump the F-18E/F order and completely bury the F-35 as well. Both will be replaced by either Rafael or Typhoon orders
2: Canada will impose a similar tariff on all Boeing products, including spares and support, forcing AC to cancel their Max order and dump their 77s. Westjet will likewise dump their 737s in favour of A32X.
3: The UK, following Brexit, might also impose huge tariffs on any and all Boeing products and services, effectively forcing BA to dump Boeing in favour of, well, BBD and Airbus products
4: Nations around the world will become vary of trading with the US, not just in aviation but in all trades. This could lead to a massive order slump for American companies who rely on export for all or parts of their sales.

Congratulations Boeing: You pointed a double-barrelled shotgun at both your feet and let rip.

And the US Government will admit existence of Alien bodies at Area 51, CIA cover-up of JFK assassination and other shocking revelations like 9/11.

Canada realizes the importance of Boeing to its civil and military aviation sector.

AC will take delivery of its 737MAX. The F-18E/F order is a matter of when not if....

Been reading and following most of this thread, but just wanna throw my opinion on it. I can't believe that they are imposing these tarrifs, at least in this first round of debate. It will spell disaster for the C-series. Really hoping we don't see the delta order fail because of it. Boeing is just using their power and size to bully out the competition. How many tax breaks does Boeing get.. And sell their planes below list prices all the time. All companies do. They are just scared because they know the C-series is a great plane, and even though it's not direct competition right now, a future model could be, so of course they are going to try anything they can to stop Bombardier.
We Need this competition. If Bombardier got subsidies to get started, let it be. Airbus got help also in the past also.

My question is how much did Boeing slip to these politicians behind the table to make sure they win this battle.

mjoelnir wrote:

washingtonflyer wrote:

Boeing's deal to United is irrelevant. The question relates to what has BBD done in the U.S. market. BBD has been found (preliminarily) by the USDOC to have been the recipient of massive subsidies from the GOQ and the GOC. How is a sale between one US company and another US company relevant to that?

You cant measure international trade relations against local law. Boeing used price dumping to cut BBD out of a deal with UA. That may have no relevance according to local law, but it has relevance when you look at trade agreements and those arbitration systems.

Show me the trade agreement text which allows a company in country A to sue country B because a company in country B dumped a product within country B. Lets have a refresher on the definition of dumping and the legality of dumping.......

Under the World Trade Organization (WTO) Antidumping Agreement, dumping is not prohibited unless it causes or threatens to cause material injury to a domestic industry in the importing country

washingtonflyer wrote:

I hear this "Boeing received tax breaks" issue. May or may not be true. But if the only argument is that "the other guy got tax breaks too", then one cannot complain when one body finds that the programs in question of BBD were subsidies.

One has to ignore quite a lot, even the Seattle Times, to not know that Boeing is receiving tax breaks.[/quote]

Again, stating the other guy gets tax breaks too creates the admission that you got tax breaks.

lets also remember that Boeing as a company is pretty profitable and yields investment grade paper. How's BBD been doing over the past few years? Would a commercial bank lend at top tier rates? How's BBDs investment grade?

mjoelnir wrote:

washingtonflyer wrote:

Boeing's deal to United is irrelevant. The question relates to what has BBD done in the U.S. market. BBD has been found (preliminarily) by the USDOC to have been the recipient of massive subsidies from the GOQ and the GOC. How is a sale between one US company and another US company relevant to that?

You cant measure international trade relations against local law. Boeing used price dumping to cut BBD out of a deal with UA. That may have no relevance according to local law, but it has relevance when you look at trade agreements and those arbitration systems.

washingtonflyer wrote:

I hear this "Boeing received tax breaks" issue. May or may not be true. But if the only argument is that "the other guy got tax breaks too", then one cannot complain when one body finds that the programs in question of BBD were subsidies.

One has to ignore quite a lot, even the Seattle Times, to not know that Boeing is receiving tax breaks.

I think we need to backup the bus on Boeing “dumping” on the UA order. I have talked to several people involved with that who say that Boeing would still have made money on the deal. It’s massively aggressive pricing but a good article that came about when United deferred and converted someof the orders stated the price was around $26 million per.

If Boeing made a dollar or zero dollars it isn’t really dumping even ignoring the fact it was a sale in a home market. If United was the lowest price it ha sold such aircraft for then it would actually protect similarly aggressive pricing elsewhere from being considered dumping under laws similar to the US ones.

Boeing may win this battle but lose the war. If this tariff sticks, I doubt
Delta will ever buy another Boeing jet for a long time. Short term,
they can kiss any MAX sale to Delta goodbye

washingtonflyer wrote:

Because its not relevant to the current case. Boeing doesn't make an aircraft under 100 seats.

Cop-out.

Boeing don't make an aircraft under 138 seats.

The relative difference is the same.

Once again, do you consider a 76-seat aircraft and 100-seat aircraft to be the same?

Hearing this reported about on NPR right now. This is going to be ugly, stupid and pointless. Totally absurd. Cutting off your nose to spite your face, etc.

I understand that Boeing isn't "choosing" to do this in the sense that an individual chooses to do something, but it's hard not to characterize this move as a choice that will have some very negative consequences in the long term.

Amiga500 wrote:

washingtonflyer wrote:

Because its not relevant to the current case. Boeing doesn't make an aircraft under 100 seats.

Cop-out.

Boeing don't make an aircraft under 138 seats.

The relative difference is the same.

Once again, do you consider a 76-seat aircraft and 100-seat aircraft to be the same?

Thats not what Boeing says. http://www.boeing.com/commercial/737ng/ ... ical-specs

And what was that little debate about involving the United sale....

https://www.forbes.com/sites/scotthamil ... b75ad130da

" Bombardier competed aggressively for the order to place its C Series into the airline and build on the order announced in February from Air Canada for up to 75 CS300s. "

bigjku wrote:

I think we need to backup the bus on Boeing “dumping” on the UA order. I have talked to several people involved with that who say that Boeing would still have made money on the deal. It’s massively aggressive pricing but a good article that came about when United deferred and converted someof the orders stated the price was around $26 million per.

I gathered it was under $22m USD. At that price, Boeing would really struggle to generate profit. If it was profitable at that rate of going, then BCA would not be feeling much pressure on profits* from Airbus who wouldn't discount down to that rate.


*which they have used to justify big layoffs.

washingtonflyer wrote:

Thats not what Boeing says. http://www.boeing.com/commercial/737ng/ ... ical-specs

And what was that little debate about involving the United sale....

The plane they are stopping production of?

http://www.boeing.com/commercial/737max/

Amiga500 wrote:

bigjku wrote:

I think we need to backup the bus on Boeing “dumping” on the UA order. I have talked to several people involved with that who say that Boeing would still have made money on the deal. It’s massively aggressive pricing but a good article that came about when United deferred and converted someof the orders stated the price was around $26 million per.

I gathered it was under $22m USD. At that price, Boeing would really struggle to generate profit. If it was profitable at that rate of going, then BCA would not be feeling much pressure on profits* from Airbus who wouldn't discount down to that rate.


*which they have used to justify big layoffs.

Decrease in profits does not mean loss making. Struggling to be profitable does not mean selling below cost. You can sell at a 1 cent profit if you want to.

KarelXWB wrote:

F9Animal wrote:

I also hope Air Canada and West Jet turns it's backs on Boeing. This modern day mafia of a company makes me sick.

Air Canada is a private company, I'm sure they don't care that much.

In an alternate reality, the Canadian gouvernement would propose an import tariff on Boeing products. Then Air Canada would automatically walk away from Boeing aircraft as those products would become too expensive.

That of course won't happen.

I think we need to uncouple our predictions from our past experiences. The current U.S. administration and the tone and tenor of the ruling changes things.

Trade wars are bad, especially for a country who has so much riding on exports like the U.S. Add in over-the-top rhetoric and you have this thing spreading. In that situation, Airbus would be the big winner. Delta surely has language in their contracts to address issues such as this one. I don't see Delta being "harmed" in the sense that they would pay a dime more than the contract. I do see Boeing feeling the effects of this ruling if it is upheld in any meaningful sense.

We all should want to see new and innovative aircraft designed and produced to benefit airlines and their customers. The questions of bailouts and subsidies is much more complex and tends to be politicized but in the end, this was a politically motivated decision. That political motivation could well boomerang back on Boeing.

washingtonflyer wrote:

And what was that little debate about involving the United sale....

https://www.forbes.com/sites/scotthamil ... b75ad130da

" Bombardier competed aggressively for the order to place its C Series into the airline and build on the order announced in February from Air Canada for up to 75 CS300s. "

What about it?

Add in the larger deals for the 777, concessions by Boeing on other existing orders with United and the accelerated cash advances, Bombardier didn’t have a chance.

According to Wells Fargo United in the fourth quarter wrote a check to Boeing for $345 million in accelerated “advances” or deposits for aircraft as part of Boeing’s cash flow to fund shareholder dividends and stock buy backs. This was also a factor in the -700 deals, according to market information.

Seems clean to me... :rolleyes:

jeffrey0032j wrote:

Decrease in profits does not mean loss making. Struggling to be profitable does not mean selling below cost. You can sell at a 1 cent profit if you want to.

Indeed.

Maybe I'll reword what I said to add clarity. At that price I don't believe Boeing would be making a profit on them either.

Very good news. Some lines need to be drawn relative to subsidies. The entangled quasi-government owned C-series production/subsidiary deal is ridiculous. And they can't even produce the frames they promise to even still. Canada, of all places, isn't about to go into a trade war with the US over this.

I do find the past 10 months worth of DL/Leeham/anti-Boeing comments pretty funny.

To give a little factual calendar for upcoming events.

DOC will issue its preliminary determination on the Dumping side on October 4. They may actually announce it the next day. October 4 is the "signature date". This date -could- get pushed out by 50 days to around November 23 but it doesn't look like it will based on the fact that BBD basically told Commerce that they weren't going to submit a questionnaire response.

The CVD determination stated that the date for the final determination at Commerce will be "aligned" with the Commerce final determination on dumping. If Commerce does not extend the final determination, expect the finals in both cases to be issued on or around Christmas Day (December 25). If the final determinations are extended, they'd be extended to around February 23.

This all has an effect on the USITC hearing. If there are no extensions, expect a hearing around December 25 and a vote around February 1. If there are extensions, the Commission would likely bump out the hearing date to about February 20 or so and then a vote a month or so after that.

This case is a little nuanced in that we have a fully active subsidy side case and an abbreviated dumping side.

If the ITC votes in the affirmative (finding threat), duties would go in place starting with the date of the ITC determination. Parties can then start thinking about appeals. Because this is a case involving two NAFTA parties, BBD or Boeing could appeal to the US Court of International Trade or request that a NAFTA bi-national panel be convened. The appeals process is not short in duration - a minimum of about 15 months and many years in duration depending on the appeals and remands. Once litigation concludes at the CIT or NAFTA panel, the next step is the Court of Appeals for the Federal Circuit in DC. A three judge panel would hear that appeal. Appeals basically end there (except for a rehearing en banc). You -could- petition for cert at the Supreme Court but the Court hears a Title VII case once every 20 to 30 years and typically only if the USDOJ really presses for it (as was the situation in the Uranium case). A party recently filed for cert in a case involving sawblades, but that one got turned away without comment.

danman132x wrote:

Been reading and following most of this thread, but just wanna throw my opinion on it. I can't believe that they are imposing these tarrifs, at least in this first round of debate. It will spell disaster for the C-series. Really hoping we don't see the delta order fail because of it. Boeing is just using their power and size to bully out the competition. How many tax breaks does Boeing get.. And sell their planes below list prices all the time. All companies do. They are just scared because they know the C-series is a great plane, and even though it's not direct competition right now, a future model could be, so of course they are going to try anything they can to stop Bombardier.
We Need this competition. If Bombardier got subsidies to get started, let it be. Airbus got help also in the past also.

My question is how much did Boeing slip to these politicians behind the table to make sure they win this battle.

I bet that is fantastic as a sentiment for Lockheed and McD workers who lost good jobs because it was best to just “let it be”. After all the A300 and A310 weren’t much of a threat. It would have just been McD bullying the little guy right?

There are all sorts of trade barriers various groups see as unfair. Ask US farmers what they think opposition to GMO foods are really about. In fact agricultural protections (US ones included) make this stuff look quaint.

I don’t see the need to apologize. These weren’t tax breaks. A company was bailed out that should have gone under. The numbers are right there. If a US train builder got $2-3 billion it wouldn’t commercially be able to obtain to finish a C-series train when it was on the verge of bankruptcy and started selling it at a huge loss subsidies by US taxpayers to Canada do you not think there would be an issue? That’s something BBD actually does (or did at one time) for a profit and appears competent at. Is a smaller US company threatening that business being bullied if Canada doesn’t allow it?

It was bad policy for the US (and Canada and Europe) to bail out the automakers and they should have failed. VW should have been fined to the maximum for their actions too. New players would emerge. I am sick of all the bailouts and exceptions for to big to fail companies. Throw Boeing in their too but at the very least they are consistently profitable and haven’t required the government to backup dump trucks of cash to keep the lights on like big banks (worldwide) and big automakers.

On a broader note we all know this isn’t just about BBD. It’s about not having done something about Airbus when it should have been done. It’s abour Russia and China and probably soon India being willing to state finance entry into markets. At some point you have to say stop. If China goes down the same path I will say the same thing and will be the first to call the US government cowards if they won’t do the same to them they did here.

If we want free trade then fine. I have zero problem with it. But it isn’t free and every nation is guilty of various abuses. BBD should be bankrupt. I have no pity for them and see no reason to accept even a threat that their unnatural existence should cost US citizens jobs when they are in clear violation of US law.

If we want true free trade let’s all sign up for that. That means no more abusing regulations to keep products out and no more government aid at all. If Google and Amazon comes in and whip your ass on retail and search then you just shut up and take it. If German and Japanese cars drive under your auto manufacturers you shut up. No more keeping out GMO crops on silly safety grounds to protect local inefficient farmers. No more government aid ever under any circumstance regardless of if a company or industry employees half your populace. You have an agreement that accomplished that and by all means I would sign up.

texl1649 wrote:

Very good news. Some lines need to be drawn relative to subsidies. The entangled quasi-government owned C-series production/subsidiary deal is ridiculous. And they can't even produce the frames they promise to even still. Canada, of all places, isn't about to go into a trade war with the US over this.

I do find the past 10 months worth of DL/Leeham/anti-Boeing comments pretty funny.

I still find unbelivable how much some people can deny reality, just to feel they are right.

I guess that the line needs to be drawn at a $35-40 billion level:

http://www.washingtonpost.com/wp-dyn/co ... 04699.html

https://sites.tufts.edu/corruptarmsdeal ... nker-case/

Darleen Druyun was arrested in 2004, and following a plea bargain was sentenced to nine months in prison. Michael Sears, chief financial officer at Boeing, who negotiated Druyun’s subsequent employment with the company, was sentenced to four months in prison, also as part of a plea bargain. Boeing CEO Phil Condit resigned as a result of the scandal. Druyun’s two direct superiors, Marvin Sambur, the assistant secretary of the Air Force for acquisition, and James Roche, the secretary of the Air Force, also resigned.

Roche was later accused by the DOD Inspector General of using his influence with Northrop Grumman, where he had previously been an executive, to secure a job for the brother of a senior Office of Management and Budget (OMB) official. According to the Inspector General, the arrangement was made to secure OMB’s approval of the tanker leasing deal. Despite the new revelations put forward by the Inspector General, McCain’s Senate Armed Services Committee criticized the DOD watchdog for not being thorough enough in its investigation.

Following the revelation of corruption in the deal, the leasing contract with Boeing was cancelled in December 2003. A new competition was initiated for a “KC-X” tanker to replace the KC-135s. This was initially won by a consortium of EADS North America and Northrop Grumman. Boeing appealed the decision, which was eventually overturned on the basis of flaws in the evaluation procedure. The contest was re-run and won by Boeing in 2011, which offered again the KC-767 (now re-badged the KC-46 by the Air Force). The program is behind schedule and over-budget, but as a fixed-price contract the cost overrun will be borne by Boeing.

http://aviationweek.com/blog/long-sordi ... kc-46-2011

But to win the lucrative contract, Boeing aggressively underbid its main competitor, EADS North America, even though the terms of the fixed-price contract would place it at risk of business losses if the company's costs to produce the aircraft escalated by more than planned, unlike the cost-plus contracts that are more typical in military programs.

What's unusual about the tanker program is that Boeing signed up for a fixed-price development contract despite all the uncertainties surrounding such efforts. That decision was dictated in part by a desire to deny arch-rival Airbus (OTCPK:EADSF) access to the U.S. military-aircraft market, and in part by a recognition that the tanker program could become one of the biggest projects in the company's history. In other words, a franchise worth losing some money on in the near term to secure for the next 50 years.

bigjku wrote:

I don’t see the need to apologize. These weren’t tax breaks. A company was bailed out that should have gone under. The numbers are right there. If a US train builder got $2-3 billion it wouldn’t commercially be able to obtain to finish a C-series train when it was on the verge of bankruptcy and started selling it at a huge loss subsidies by US taxpayers to Canada do you not think there would be an issue? That’s something BBD actually does (or did at one time) for a profit and appears competent at. Is a smaller US company threatening that business being bullied if Canada doesn’t allow it?

It was bad policy for the US (and Canada and Europe) to bail out the automakers and they should have failed. VW should have been fined to the maximum for their actions too. New players would emerge. I am sick of all the bailouts and exceptions for to big to fail companies. Throw Boeing in their too but at the very least they are consistently profitable and haven’t required the government to backup dump trucks of cash to keep the lights on like big banks (worldwide) and big automakers.

On a broader note we all know this isn’t just about BBD. It’s about not having done something about Airbus when it should have been done. It’s abour Russia and China and probably soon India being willing to state finance entry into markets. At some point you have to say stop. If China goes down the same path I will say the same thing and will be the first to call the US government cowards if they won’t do the same to them they did here.

If we want free trade then fine. I have zero problem with it. But it isn’t free and every nation is guilty of various abuses. BBD should be bankrupt. I have no pity for them and see no reason to accept even a threat that their unnatural existence should cost US citizens jobs when they are in clear violation of US law.

If we want true free trade let’s all sign up for that. That means no more abusing regulations to keep products out and no more government aid at all. If Google and Amazon comes in and whip your ass on retail and search then you just shut up and take it. If German and Japanese cars drive under your auto manufacturers you shut up. No more keeping out GMO crops on silly safety grounds to protect local inefficient farmers. No more government aid ever under any circumstance regardless of if a company or industry employees half your populace. You have an agreement that accomplished that and by all means I would sign up.

The hypocrisy here is that the U.S. DID BAIL OUT whole industries at the start of the recession. The U.S. bailed out a financial services industry that preyed on its customers with deceptive loan products. They also bailed out an entire auto industry. Everyone either cheered it on or just did/said nothing as tens if not hundreds of billions of dollars were spent.

Are we really better off that Bank of America and other massive companies were NOT forced to sort it out themselves? Is what happened with Bombardier illegal and/or harmful to Boeing given their own tax breaks and monopoly contracts with the U.S. govt?

Apart from the lawsuit filed by Boeing in the USA and WTC and Embraer in the WTC, only two things come to my mind:

1. yes, the sale to DL was well below the margins. BBD desperately needed a strong name in the American market for its product;
2. this was and will be the only possible sale below the margins without compromising the financial health of the company.

The sale to Delta Air Lines was announced on April 28, 2016.
Since then, no other order has been announced.
And if UA and B6 would like to have the product under the same conditions offered to DL, forget it about ... The BBD would be paying to sell!

BBD has a great product in its portfolio with CSeries.
It was the pioneer in the use of GTF engines and paid the price for it.
But the project took a long time in its development, with several delays.
At a time when the oil barrel hit $ 160.00 was a great alternative due to its operating costs. But these gains were overshadowed by current prices of the oil barrel.

In my view the big mistake of the BBD was not to offer a platform in the range of 130 to 180 places early on, challenging Airbus and Boeing.
But now the cash limit has reached its lowest level, having to make an "arrangement" with the government of Quebéc to be able to continue to survive.
In this moment, they have no money to afford a developing of a CS500 or CS700 dreamed by many here.

Along the same lines, Embraer decided not to bump head-on with Airbus or Boeing. At most it would be in the "botton-line" of the two with its E195-E2.

I'm sorry if I upset many CSeries fans by what I say, but neither Bombardier nor Embraer will sell what Airbus and Boeing sell with their single-aisle products.
At most "they will eat by the edges".

fpetrutiu wrote:

Will this affect the DL order? will now DL need to be looking at canceling that order and look for other aircraft? Are previous orders subject to these tariffs? I can't imagine this will seat well with DL and also for any top-off orders that they might need...

DL is confident the final outcome will be positive:

Delta says CSeries ruling is just preliminary, confident that USITC will conclude that no U.S. manufacturer is at risk

https://twitter.com/ReutersAero/status/ ... 2607204352

The import tariff doesn't apply until the final decision has been made.

washingtonflyer wrote:

Amiga500 wrote:

washingtonflyer wrote:

Because its not relevant to the current case. Boeing doesn't make an aircraft under 100 seats.

Cop-out.

Boeing don't make an aircraft under 138 seats.

The relative difference is the same.

Once again, do you consider a 76-seat aircraft and 100-seat aircraft to be the same?

Thats not what Boeing says. http://www.boeing.com/commercial/737ng/ ... ical-specs

And what was that little debate about involving the United sale....

https://www.forbes.com/sites/scotthamil ... b75ad130da

" Bombardier competed aggressively for the order to place its C Series into the airline and build on the order announced in February from Air Canada for up to 75 CS300s. "

It's irrelevant because DL made it clear that Boeing was not part of the RFP:

“I want to be clear that Boeing is not competing for new orders when we were negotiating with Bombardier,” testified Greg May, SVP of Supply Chain Management and Fleet Strategy. “Boeing had no viable competitive alternatives to the CS100. We were not even considering any new Boeing product as an alternative when we made the purchase that Boeing challenges in the petition.”

Ref https://leehamnews.com/2017/05/23/delta ... ing-claim/

texl1649 wrote:

Very good news. Some lines need to be drawn relative to subsidies. The entangled quasi-government owned C-series production/subsidiary deal is ridiculous. And they can't even produce the frames they promise to even still. Canada, of all places, isn't about to go into a trade war with the US over this.

I do find the past 10 months worth of DL/Leeham/anti-Boeing comments pretty funny.

You do get this ISN'T just Canada but production in Belfast - the UK will be part of a trade tit for tat engagement. Irony the UK is still part of the EU so in theory they could engage in an EU to US trade objection

K, I've sat and read through the decision memo. The big take away is that DOC found BBD to be uncreditworthy and that CSALP was not equityworthy.

The GOQ equity infusion provided 147% of the subsidy rate.
The Federal launch aid provided 29% of the subsidy rate.
The GOQ launch aid provided 9% of the subsidy rate.
UK launch aid provided 17.5% of the subsidy rate.
Free land at Mirabel - 1.44%
Tax incentives, tax credits, etc all amounted to about 10%

B777LRF wrote:

I suppose the following will happen:

1: Canada will dump the F-18E/F order and completely bury the F-35 as well. Both will be replaced by either Rafael or Typhoon orders
2: Canada will impose a similar tariff on all Boeing products, including spares and support, forcing AC to cancel their Max order and dump their 77s. Westjet will likewise dump their 737s in favour of A32X.
3: The UK, following Brexit, might also impose huge tariffs on any and all Boeing products and services, effectively forcing BA to dump Boeing in favour of, well, BBD and Airbus products
4: Nations around the world will become vary of trading with the US, not just in aviation but in all trades. This could lead to a massive order slump for American companies who rely on export for all or parts of their sales.

Congratulations Boeing: You pointed a double-barrelled shotgun at both your feet and let rip.

No one is going to dump their existing products.

Amiga500 wrote:

bigjku wrote:

I think we need to backup the bus on Boeing “dumping” on the UA order. I have talked to several people involved with that who say that Boeing would still have made money on the deal. It’s massively aggressive pricing but a good article that came about when United deferred and converted someof the orders stated the price was around $26 million per.

I gathered it was under $22m USD. At that price, Boeing would really struggle to generate profit. If it was profitable at that rate of going, then BCA would not be feeling much pressure on profits* from Airbus who wouldn't discount down to that rate.


*which they have used to justify big layoffs.

Layoffs are simply efficiency when production rates are going up. I am 100% in favor of such things. Employee the people elsewhere where they can produce something useful.

In fact it’s why BBD’s cost to build the C-series are likely higher than Boeing’s to build the 737. They drive about 1/3rd as much revenue per employee as Boeing. They simply aren’t efficient.