leghorn
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 8:30 pm

Ah, now I get ya. It's all about "Respect my authoritah" like something out of a juvenile cartoon.
If someone came to me and said I want to know everything about your cost structures forcing me to give information which will find its way in to the hands of my competitors that would otherwise only be leaked through industrial espionage for product I haven't even yet sold on their street corner wouldn't I be best advised to keep quiet.
I myself have no respect for the Wilbur Ross driven DoC and if I was going to loose either way with him driving a kangaroo court I'd keep quiet.
 
ExMilitaryEng
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 8:39 pm

It was a lost cause at the USDOC anyways.

Historically, 90% of their preliminary decisions always sided with the (US) original complaint. USDOC even helps those US firms in their complaint filing / writing to ensure a win.

There was no points for BBD revealing any confidential information to the opposing party while it is not getting the same confidential info from Boeing.

On the other hand, the determination of harm is historically determined 60% of the times. Less many kangaroos here... ;-)
Last edited by ExMilitaryEng on Fri Oct 06, 2017 8:51 pm, edited 1 time in total.
 
AirbusCanada
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 8:41 pm

texl1649 wrote:

Well put. There are a vast number of hurt feelings in the aviation/media on this, but it's really not too complicated. Tread lightly vs. bureaucrats no matter what country you are in. Bombardier (which, as we all know, is actually massively subsidized) decided to flip the proverbial bird at USDOC. Now they can deal with the consequences; the main one is that the CS500 won't be launched, if ever, for another 10 years.


If i was the Canadian govt, I would give out juicy Defense contact to BBd to develop a CS500 based aircraft to replace CP-140 Auroras. If Bombardier can amortized entire cost of developing CS500 on a defense contract, they can dump free CS500 on Boeing's Best customer (Southwest).
Last edited by AirbusCanada on Fri Oct 06, 2017 8:53 pm, edited 1 time in total.
 
bigjku
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 8:50 pm

AirbusCanada wrote:
texl1649 wrote:

Well put. There are a vast number of hurt feelings in the aviation/media on this, but it's really not too complicated. Tread lightly vs. bureaucrats no matter what country you are in. Bombardier (which, as we all know, is actually massively subsidized) decided to flip the proverbial bird at USDOC. Now they can deal with the consequences; the main one is that the CS500 won't be launched, if ever, for another 10 years.


If i was the Canadian govt, I would give out juicy Defense contact to BBd to develop a CS500 based AWACS to replace CP-140 Auroras. If Bombardier can amortized entire cost of developing CS500 on a defense contract, they can dump free CS500 on Boeing's Best customer (Southwest).


That would be interesting though I am gonna to suggest doing so would get you fired as the CP-140 isn’t an AWACS so your Maritime patrol squadron is going to feel pretty silly when it is equipped with one...

Now if you wanted to develop an MPA and a stretch of the C-Series and then buy just a dozen of them I would suggest you might also still get fired when the other party runs campaign commercials on your billion plus dollar a piece MPA aircraft. I suppose you can stand and defend it as charity for BBD but that isn’t quite the campaign commercial that the other side could run.

Good luck though, it sounds like a brilliant scheme.
 
ExMilitaryEng
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 8:57 pm

Exactly, make a RFP for a future MPA, exactly tailored to a CS500. (I proposed that a few days ago, in the military forum)

FWIW, the last homegrown MPA was a Canadair designed and built CL-28 Argus. Was among the best in its time. With about 23hrs loitering time...
Last edited by ExMilitaryEng on Fri Oct 06, 2017 8:58 pm, edited 1 time in total.
 
AirbusCanada
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 8:58 pm

bigjku wrote:
.

Now if you wanted to develop an MPA and a stretch of the C-Series and then buy just a dozen of them I would suggest you might also still get fired when the other party runs campaign commercials on your billion plus dollar a piece MPA aircraft. I suppose you can stand and defend it as charity for BBD but that isn’t quite the campaign commercial that the other side could run.

Good luck though, it sounds like a brilliant scheme.


Well, Western Canada may be upset (They vote conservative anyways), Ontario would probably be neutral(BBD has major facility in Toronto) , but Quebec would definitely be Happy.
The Govt should be able to sell it as a "STANDING UPTO TRUMP" and job saving move to most of Canada east of Alberta.
 
danman132x
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 9:05 pm

Quote from an article I read
"U.S. Commerce Secretary Wilbur Ross said the decision affirmed Trump's "America First" policy"

What about "innovation first"? The c-series is an amazing plane. We need new technologies and more efficient planes! Boeing and airbus sure as hell didnt do it with this size aircraft. Innovation is a good thing. This whole case makes me so angry and I hope to see this whole thing drop at the end! Bombardier did no harm to Boeing. They are just scared of the future that a new player might emerge with better planes. Maybe it'll force them to INNOVATE more and spend more money for better planes! Yes Boeing have good planes now too, but it never hurts to try and be better. And without new competition, that will not happen. But as with all big companies, they are lining the pockets of some politicians and persuading them in their favor. All crooked to one extent or another.
 
iamlucky13
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 9:09 pm

washingtonflyer wrote:
iamlucky13 wrote:
Utterly absurd. I'm not sure I can defend Bombardier's aid or pricing, but the scale of duties is completely unsupportable.


Again, the dumping deposit rate is based on the petition rate. Bombardier refused to answer Commerce's questions. So, Commerce found that the only margin on record is the margin that the Petitioner proposed.


While that may be true as a matter of what the process calls for, that doesn't mean it is an accurate figure.

I concede you have a legitimate point with regards to the current status of the dumping case, and I presume Bombardier made a strategic decision to not to submit information contradicting Boeing's claims because they are still hoping to fight the claim of dumping itself, not because Boeing is correct about the magnitude of the dumping. Presumably your further comment about sales being argued as not actually having occurred yet is their continued tactic. As you well know and hopefully others will understand, if and when Bombardier provides data showing the illicit discounting is smaller than Boeing claims, they would be in the process admitting to dumping (unless they can demonstrate there was no illicit discount, which I'm not willing to stake my arguments on).

So considering your point, the preliminary dumping penalty is only a minor part of my frustration.

Coming on top of the subsidy penalty, the calculation for which appears to be horrendously bad, however, it really gets under my skin.

Nean1 wrote:
washingtonflyer wrote:
If the IRS calls you in for an audit and you tell the IRS, "I think your questions are stupid and irrelevant and I'm not going to give you any records", don't be surprised when the IRS tags you with a nice penalty.


I totally agree. The extremely high penalty gives a hint that the BBD must have conducted this issue quite inappropriately, possibly in total disrespect to the commission.


That's not really what washingtonflyer is suggesting, as far as I read him. If DoC found Bombardier's lack of responses contemptuous, I missed that reporting.

Rather, in adversarial proceedings, when the other party makes a factual claim, if you do not dispute the accuracy of the claim, it can be interpreted as, not necessarily admission to, but at least assent to the commission, judge, etc. treating the other party's claim as fact. As I state above, I suspect this was a strategic decision on Bombardier's part, because I struggle to believe the contracted price is only 56% of what it should be (the figure that would require a 79.82% penalty to correct).

If I am right, then at some point ahead of the final determination, Bombardier will give up on trying to argue the sale has not actually occurred yet, or other arguments that they have not dumped, and switch to challenging the actual sales price and production cost or home country sales price figures.

Until then, Bombardier is not doing the equivalent of calling the IRS stupid and irrelevant, but arguing the IRS is trying to tax money that hasn't been earned yet.

This analogy doesn't entirely fit because it's about personal income, not international trade, but if your employer promises you a raise next year, and the IRS tries to tax your earnings for this year based on what you will earn next year, you also would not really be keen to tell the IRS what you're going to earn next year.

JoeCanuck wrote:
You said you were a lawyer, right? I believe you.


Amusingly subtle, but let's play nice. While I'm guessing washingtonflyer's personal feelings about the case are the opposite of yours and mine and sense that influencing his comments, I also think he's been the most informative contributor to this thread.
 
washingtonflyer
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 9:24 pm

ExMilitaryEng wrote:
It was a lost cause at the USDOC anyways.

Historically, 90% of their preliminary decisions always sided with the (US) original complaint. USDOC even helps those US firms in their complaint filing / writing to ensure a win.


The DOC usually finds dumping, but its a self selecting sample pool. Parties through their attorneys will file trade cases usually only if they think they have a reasonable chance of success. These cases are quite expensive - no less than about a million dollars for a simple product involving one country. For a complex case involving multiple countries and a complicated product, the case can run from three to five million dollars to bring. Plus, if you lose your case, you've given your foreign competitors pretty much target free access to your market for at least 18 months.

ExMilitaryEng wrote:
There was no points for BBD revealing any confidential information to the opposing party while it is not getting the same confidential info from Boeing.


Nothing gets revealed to Boeing. Information submitted to the government agencies (Commerce and the Commission) is submitted pursuant to a protective order and the parties themselves may NOT view the other parties' confidential data.

ExMilitaryEng wrote:
On the other hand, the determination of harm is historically determined 60% of the times. Less many kangaroos here... ;-)


Probably closer to 75%. ITC went affirmative yesterday on residential washers (a safeguards case which has a very high injury test) and went negative on titanium sponge in a preliminary phase dumping case.
 
washingtonflyer
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 9:31 pm

leghorn wrote:
Ah, now I get ya. It's all about "Respect my authoritah" like something out of a juvenile cartoon.
If someone came to me and said I want to know everything about your cost structures forcing me to give information which will find its way in to the hands of my competitors that would otherwise only be leaked through industrial espionage for product I haven't even yet sold on their street corner wouldn't I be best advised to keep quiet.
I myself have no respect for the Wilbur Ross driven DoC and if I was going to loose either way with him driving a kangaroo court I'd keep quiet.


I answered a similar question above on confidentiality.

Let me give you an aviation example:

Lets say you had a cockpit qualified mechanic who had a certificate to move aircraft to RON parking or to a hangar. Lets say one evening that mechanic got frustrated with the traffic queue at LAX and decided to take the aircraft he was taxiing to the hanger across the "green space" between the various taxiways and cut across a couple of aircraft waiting to push back. The ground controller didn't see it, but several pilots and ground personnel saw it and reported it to the FAA.

The FAA contacts the airline and states that it heard about some reckless activity about an aircraft belonging to that airline. The FAA wants to know who the mechanic was, wants to see the time cards for all mechanics on staff that day, wants to see data regarding training for mechanics, their cockpit certificates, and any other documentation relating to mechanic certification training, and directives from management on taxi procedures.

The airline replies to the FAA - we don't think anything happened. There's no need to provide you with that data. So, we're not going to do it.

Do you think the FAA is going to say "right on, all good..."?
 
bigjku
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 9:34 pm

danman132x wrote:
Quote from an article I read
"U.S. Commerce Secretary Wilbur Ross said the decision affirmed Trump's "America First" policy"

What about "innovation first"? The c-series is an amazing plane. We need new technologies and more efficient planes! Boeing and airbus sure as hell didnt do it with this size aircraft. Innovation is a good thing. This whole case makes me so angry and I hope to see this whole thing drop at the end! Bombardier did no harm to Boeing. They are just scared of the future that a new player might emerge with better planes. Maybe it'll force them to INNOVATE more and spend more money for better planes! Yes Boeing have good planes now too, but it never hurts to try and be better. And without new competition, that will not happen. But as with all big companies, they are lining the pockets of some politicians and persuading them in their favor. All crooked to one extent or another.


I think this narrative needs to backup a bit as it’s core to the issue at hand. Airbus and Boeing haven’t replaced the 737/A320/717 with new airplanes not because they can’t do what BBD did with the C-Series. I hate to tell everyone but the C-Series isn’t a revolutionary aircraft. It looks exactly like every other aircraft since they started building tubes with engines under the wings. It is just one done with updated process and materials.

And that is the crux of the issue. Boeing studied a new short range aircraft to death. You can’t get enough improvement in the aircraft to justify a high enough sales price after production cost to generate a return on your investment that would appeal to market investors. And the C-Serises actually kind of proves the point. It had to get non market equity just to stay afloat in development and likely can’t be produced for a profit for a very long time, if ever given the effective cap on its prices set by discounted 737/A320 sales.

It’s not that Boeing can’t innovate. It is that economically it decided a program to do this wasn’t viable. Seeing as it effectively put BBD out of business before it was bailed out it seems hard to disagree with them.

So that’s the problem. You have a great product, but it isn’t great enough to command a price at which it can return a real profit, that probably shouldn’t exist. If we are all mature about it I think we could all admit that is pretty much the circumstance we are in. In fact that was the whole issue in the smaller aircraft market. Nothing outside radical innovation promised a return on investment. Now we have this plane that made it because Canada stepped well over the line and it’s a mess.

There isn’t a good answer, but screeching that one side won’t innovate and that the other didn’t clearly violate trade laws is silly. The UK basically admitted it views it that way by leaking what it did. So what do we do? We know what Canada did was wrong. Should there be no punishment?
 
ExMilitaryEng
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 9:47 pm

From BBD:

Statement on Commerce Department Antidumping Duties Preliminary Decision

We strongly disagree with the Commerce Department’s preliminary decision.  It represents an egregious overreach and misapplication of the U.S. trade laws in an apparent attempt to block the C Series aircraft from entering the U.S. market, irrespective of the negative impacts to the U.S. aerospace industry, U.S. jobs, U.S. airlines, and the U.S. flying public.

The Commerce Department’s approach throughout this investigation has completely ignored aerospace industry realities.  Boeing’s own program cost accounting practices – selling aircraft below production costs for years after launching a program – would fail under Commerce’s approach.  This hypocrisy is appalling, and it should be deeply troubling to any importer of large, complex, and highly engineered products.

Commercial aircraft programs require billions in initial investment and years to provide a return on that investment.  By limiting its antidumping investigation to a short 12-month period at the very beginning of the C Series program, Commerce has taken a path that inevitably would result in a deeply distorted finding.

We remain confident that, at the end of the processes, the U.S. International Trade Commission will reach the right conclusion, which is that the C Series benefits the U.S. aerospace industry and Boeing suffered no injury. There is wide consensus within the industry on this matter, and a growing chorus of voices, including airlines, consumer groups, trade experts, and many others that have come forward to express grave concerns with Boeing’s attempt to force U.S. airlines to buy less efficient planes with configurations they do not want and economics that do not deliver value.

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

Commerce’s statement that Bombardier is not cooperating with the investigation is a disingenuous attempt to distract from the agency’s misguided focus on hypothetical production costs and sales prices for aircraft that will be imported into the United States far in the future.

As we have explained repeatedly to the Department, Bombardier cannot provide the production costs for the Delta aircraft for a very simple reason; they have not yet been produced. Commerce’s attempt to create future costs and sales prices by looking at aircraft not imported into the United States is inappropriate and inconsistent with the agency’s past practices. This departure from past precedent and disregard of well-known industry practices is an apparent attempt to deprive U.S. airlines from enjoying the benefits of the C Series, even though Boeing abandoned the segment of the market served by the C Series more than a decade ago.

This action also puts thousands of high-technology U.S. jobs at risk given the C Series’ significant U.S. content.  More than half of each aircraft’s content, including its engines and major systems, is sourced from U.S. suppliers. Going forward, the C Series program will generate more than $30 billion in business for U.S. suppliers and support more than 22,700 jobs in the United States.”
 
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golfradio
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 10:10 pm

The b******s just got an ace when negotiating NAFTA. They are going to use it to get their deal for NAFTA and they know Canada will deal. Once NAFTA is negotiated USITC will reverse this.
Bring back the old site.
 
washingtonflyer
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 10:26 pm

Ummmm...no. NAFTA negotiations will take years. This case will be over by February.
 
StTim
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 10:27 pm

washingtonflyer wrote:
Let me say this, if you think thumbing your nose at a Federal agency is going to get you the result you want (i.e., a low dumping margin), then you're living in a universe that is far, far away.


Many think that the idea of a fair hearing in in Trumptime is unlikely.
 
ExMilitaryEng
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 10:59 pm

Nicely made BBD site here.

http://the-plane-truth.com/

I guess part of the debate will happen a bit more openly (not sure if it will change anything, but at least more people will know the real Boeing...)
Last edited by ExMilitaryEng on Fri Oct 06, 2017 11:03 pm, edited 1 time in total.
 
airnorth
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 10:59 pm

washingtonflyer wrote:
leghorn wrote:
and let me say this, a trade war and an isolated U.S is the logical conclusion of the unreasonable actions of the Department of Commerce. The U.S. are the aggressors here and I will have no sympathy for them when their "acting out" blows up in their faces.
The DOC may imagine themselves righteous based on the rules they have constructed for themselves but they are being observed by others who frame policy and decide terms of trade abroad.


There isn't a single investigative authority out there that oversees AD/CVD cases that permits a company to decide for itself what information its going to submit and what information its not going to submit. Emasculation of the investigative agency isn't something the various authorities stand for. Not CBSA in Canada, not SAT in Mexico, not the DGTR in India.


Just curious, in the BBD press release, they say they could not provide the information as the aircraft have yet to be produced. Is this what you are referring to in your post about emasculating the investigative agency?
I always find these sorts of hearings very confusing as nothing appears to be simply black or white.

"As we have explained repeatedly to the Department, Bombardier cannot provide the production costs for the Delta aircraft for a very simple reason; they have not yet been produced. Commerce’s attempt to create future costs and sales prices by looking at aircraft not imported into the United States is inappropriate and inconsistent with the agency’s past practices. This departure from past precedent and disregard of well-known industry practices is an apparent attempt to deprive U.S. airlines from enjoying the benefits of the C Series, even though Boeing abandoned the segment of the market served by the C Series more than a decade ago."
http://www.bombardier.com/en/media/news ... ercom.html

I guess all of this public consumable information is for the most part just posturing, but is there a grain of truth in their release?
Again, genuinely curious.
 
ytz
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 11:03 pm

Time for Nav Canada to increase fees for US registered aircraft transiting Canadian airspace..... Sure the FAA will retaliate. But that just makes a few vacation trips more expensive. On the other hand, every US flight going to Europe or Asia will now be at a disadvantage against their Asian and European competitors. If they cost us airframe jobs, it's time for us to show them, we can cost them airline jobs.
 
AirbusCanada
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 11:17 pm

ytz wrote:
Time for Nav Canada to increase fees for US registered aircraft transiting Canadian airspace..... Sure the FAA will retaliate. But that just makes a few vacation trips more expensive. On the other hand, every US flight going to Europe or Asia will now be at a disadvantage against their Asian and European competitors. If they cost us airframe jobs, it's time for us to show them, we can cost them airline jobs.


Not US registered aircraft, that will cost too many jobs in the industry on both side of the boarder and wont' do anything to Boeing.

Just put extra fee on Boing made aircraft overflying Canada. This will put almost every single Boeing long haul sales campaign in a competitive disadvantage, with minimal effect on Canadian economy. Just started a separate thread on this already.
viewtopic.php?f=3&t=1375663
 
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golfradio
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 11:23 pm

washingtonflyer wrote:
NAFTA negotiations will take years. This case will be over by February.


Three rounds of talks have already completed. Fourth round starts next week in Washington where U.S is going to present the Dairy demands specifically around the supply management mechanism. Until now this would have been a sacred cow (pun intended). But now I think Canada will be willing to listen.
Bring back the old site.
 
washingtonflyer
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 11:31 pm

airnorth wrote:
washingtonflyer wrote:
leghorn wrote:
and let me say this, a trade war and an isolated U.S is the logical conclusion of the unreasonable actions of the Department of Commerce. The U.S. are the aggressors here and I will have no sympathy for them when their "acting out" blows up in their faces.
The DOC may imagine themselves righteous based on the rules they have constructed for themselves but they are being observed by others who frame policy and decide terms of trade abroad.


There isn't a single investigative authority out there that oversees AD/CVD cases that permits a company to decide for itself what information its going to submit and what information its not going to submit. Emasculation of the investigative agency isn't something the various authorities stand for. Not CBSA in Canada, not SAT in Mexico, not the DGTR in India.


Just curious, in the BBD press release, they say they could not provide the information as the aircraft have yet to be produced. Is this what you are referring to in your post about emasculating the investigative agency?
I always find these sorts of hearings very confusing as nothing appears to be simply black or white.

"As we have explained repeatedly to the Department, Bombardier cannot provide the production costs for the Delta aircraft for a very simple reason; they have not yet been produced. Commerce’s attempt to create future costs and sales prices by looking at aircraft not imported into the United States is inappropriate and inconsistent with the agency’s past practices. This departure from past precedent and disregard of well-known industry practices is an apparent attempt to deprive U.S. airlines from enjoying the benefits of the C Series, even though Boeing abandoned the segment of the market served by the C Series more than a decade ago."
http://www.bombardier.com/en/media/news ... ercom.html

I guess all of this public consumable information is for the most part just posturing, but is there a grain of truth in their release?
Again, genuinely curious.


The Department of Commerce's dumping questionnaire comes in four parts (sometimes five): Sections A-D and sometimes Section E.

Section A deals with general corporate and sales practice issues. What were your total sales in home market, third country markets and in the USA over the period of investigation? Who owns your company? How is your company structured? Who are your affiliates? How do you sell goods in your home market and in the USA? Do you publish price lists? Do you have product catalogs? Etc. These questions are set up to have the parties get a feeling for how the company operates and its business practices.

Section B requests that the company report details of its actual sales during the period of investigation within its own country or potentially to its largest third country partners. Section C is the same as Section B but refers to any and all sales to the United States during the period of investigation. The questionnaire asks the company for every sale and details on every sale: sales price, sales terms, shipping terms, rebates, selling expenses, movement expenses, whether there were advertising costs, commissions, discounts, when payment was tendered, shipping dates, if regular import duties were paid, the name of each customer, whether the goods was sold to the customer prior to importation, etc. etc. Sections B and C can be very detailed and data intense. I've seen sales databases with 750,000 observations - each observation with 30 or 40 data points in it.

Section D deals with cost of production. What were your costs to produce the merchandise sold during the period of investigation. Labor, materials, fixed and variable overhead, G&A expenses, scrap offsets, tolling expenses, etc.

Section E is not applicable in this case.

If you run through the pleadings in this case, BBD did a decent job on Section A. BBD refused to answer sections B and C - claiming that because the goods weren't actually sold to Delta yet, there was no US sale to report. BBD failed to report any Section B data even though it had deliveries of CS100s and CS300s to AirBaltic and Lufthansa/Swiss during the POI. So, folks could have fought out the issue of "date of sale" on Section C (sales to Delta), but not reporting Section B sales information was a bad mistake.

BBD refused to provide a Section D response at all. BBD notes in its press release that it hadn't manufactured a CS100 for Delta during the POI. That may or may not be true, but Section D deals with production of all aircraft - regardless of destination market during the POI. It did produce CS100s and CS300s and delivered them to European carriers in 2016 and 2017. So, to say that the company did not have the data is simply false.

As a practical and legal matter, the Federal courts have repeatedly ruled that as the administering agency, Commerce has the right and discretion to ask questions that it believes to be relevant to meeting its statutory duty. A party cannot pick and choose which questions to answer merely because its opinion of an issue differs from that of Commerce. Doing that strips the agency of its investigative mandate. BBD sought to strip Commerce of that mandate. And now BBD gets to pay the price for that decision.
 
GalaxyFlyer
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 11:41 pm

It’s not that Boeing can’t innovate. It is that economically it decided a program to do this wasn’t viable. Seeing as it effectively put BBD out of business before it was bailed out it seems hard to disagree with them.

So that’s the problem. You have a great product, but it isn’t great enough to command a price at which it can return a real profit, that probably shouldn’t exist. If we are all mature about it I think we could all admit that is pretty much the circumstance we are in. In fact that was the whole issue in the smaller aircraft market. Nothing outside radical innovation promised a return on investment. Now we have this plane that made it because Canada stepped well over the line and it’s a mess.


Absolutely true, BUT if the Canadians want to subsidize it, all the better for the customer. The only harm is to the taxpayers who seem ok with it as they elected Trudeau.

GF
 
bigjku
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Fri Oct 06, 2017 11:42 pm

GalaxyFlyer wrote:
It’s not that Boeing can’t innovate. It is that economically it decided a program to do this wasn’t viable. Seeing as it effectively put BBD out of business before it was bailed out it seems hard to disagree with them.

So that’s the problem. You have a great product, but it isn’t great enough to command a price at which it can return a real profit, that probably shouldn’t exist. If we are all mature about it I think we could all admit that is pretty much the circumstance we are in. In fact that was the whole issue in the smaller aircraft market. Nothing outside radical innovation promised a return on investment. Now we have this plane that made it because Canada stepped well over the line and it’s a mess.


Absolutely true, BUT if the Canadians want to subsidize it, all the better for the customer. The only harm is to the taxpayers who seem ok with it as they elected Trudeau.

GF


Not when the alternative already exist.

Put it this way, BBD’s biggest division is it’s trains right? If the US subsidized a more efficient but otherwise uneconomical train engine and dumped it in Canada how would they respond?
 
surfdog75
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 12:26 am

What’s the next step? WTC?, Courts? Too bad Boeing didn’t decide to compete with a better product instead of abdicating the category then using the Trump administration to try and kill what appears to be a great aircraft from one of our historically best friends. Boeing has seemed like a rudderless ship since the 787 development debacle.
 
Leslieville
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 12:38 am

bigjku wrote:
Put it this way, BBD’s biggest division is it’s trains right? If the US subsidized a more efficient but otherwise uneconomical train engine and dumped it in Canada how would they respond?


Well, if no Canadian company made a competing product then there's really no damage done to said domestic manufacturers.
 
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SheikhDjibouti
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 1:08 am

bigjku wrote:
If the US subsidized a more efficient but otherwise uneconomical train engine...


More efficient, but otherwise uneconomical?
I am intrigued. How does that add up?
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CX747
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 1:38 am

Plenty of teeth mashing going on over this one. Bombardier and the CSeries has been propped up by the Canadian government. That was all fine and dandy until they dumped the product into the US market and decided to give the bird to the DOC. Boeing was well within its rights to ask for an investigation. The part people are recognizing is the fact that BBD continues to give the bird to the DOC. Boeing asked for 80% tariff. The DOC not one but twice has now found BBD in the wrong.

It is a long road to hoe for BBD at 300%. I hope something can be worked out but it seems unlikely. Boeing saw the next Airbus in creation with government bailouts. They went to the authorities who have now twice agreed. I personally think Canada and the UK will blink. No one is fooled that they illegally subsidized BBD.
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 1:46 am

SheikhDjibouti wrote:
bigjku wrote:
If the US subsidized a more efficient but otherwise uneconomical train engine...


More efficient, but otherwise uneconomical?
I am intrigued. How does that add up?


It means the Canadian government paid for the creation of a commercial product that can not exist in real world economics. In order to gain sales, BBD offers the product at a massive reduced rate to try and stay alive. They choose the wrong time and place with the Delta order. Then they flipped off the US regulators who oversee US companies. In the end, they may end up with a 300% tariff on a bird that won't sell and 2nd hand C/D Hornets because they cut off their nose to spite their face.

Overall, the US, Canada and the UK are allies. We shouldn't be treating one another this way. I hope they can all sit down and come to a fair decision for everyone involved.
"History does not long entrust the care of freedom to the weak or timid." D. Eisenhower
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 1:57 am

surfdog75 wrote:
What’s the next step? WTC?, Courts? Too bad Boeing didn’t decide to compete with a better product instead of abdicating the category then using the Trump administration to try and kill what appears to be a great aircraft from one of our historically best friends. Boeing has seemed like a rudderless ship since the 787 development debacle.


Wake up and smell the coffee. BBD cheated and got caught. Boeing took it on the chin with the 787 and rightfully so. At no point did US tax payer dollars bail that program out. The CSeries isn't a great commercial aircraft. If it was, it wouldn't need to be government backed and illegally dumped in other's markets. BBD along with the Canadian and UK governments decided to subsidize a program and then use the US market to try and keep it afloat.

BBD, and the Government's of Canada and the UK did this. The DOC just happened to catch them and call a spade a spade.
"History does not long entrust the care of freedom to the weak or timid." D. Eisenhower
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 1:59 am

SheikhDjibouti wrote:
bigjku wrote:
If the US subsidized a more efficient but otherwise uneconomical train engine...


More efficient, but otherwise uneconomical?
I am intrigued. How does that add up?


It’s pretty simple. If the cost of production and the cost of R&D make the acquisition cost increase too much an operator then an operator can’t make back the acquisition premium over their existing cheaper options.

That was the problem with a new short range aircraft when Boeing looked at it. Once you totaled up R&D cost, the cost of new tooling, the increased cost of production to use more advanced materials the price of the airframe gets high enough that it’s more economical for airlines to buy older aircraft even if they are less efficient. You could make the new aircraft but you can’t make money on it so it doesn’t get made.

That’s the fundamental issue with the C-Series. Boeing and Airbus both have a prettt good idea of what the materials going into a traditional airframe shape using CFRP heavily would cost along with all it’s components. They aren’t projecting to build more than a fraction of them per year even at peak compared to what you see on the other narrowbody lines so it can’t get the volume efficiency on that scale.

BBD complained about program accounting but declines to present its own. My guess is that not a single C-Series they have sold or have options on is sold at a price that exceeds the expected cost of materials and labor to put it together much less to amortize the tooling or return any money on investment. The line is too low volume. This is also why I suspect they won’t provide the numbers for that when asked. I mean think about the insanity of that. They basically replied they don’t know what it will cost to build the planes for Delta. They should (and I would guess do) have a pretty good idea and my guess is it isn’t pretty.

And that is what it really comes down to. Sure at the quoted price for Delta it’s a great offer. But if BBD is taking a state sponsored blood bath it really shouldn’t even exist. And at the price that one would commercially sell at I also bet Delta doesn’t buy. Hell, their answer of not knowing how much it will cost to produce the planes for Delta would basically disqualify them from any rational investment anyway. Who invest when the answer to “how much money will this make and when” is “We have no idea”.
 
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par13del
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 2:02 am

The UK is supposed to be angry at Boeing after this, remind me again how many C-Series a/c have been purchased in Europe?
Canada just signed a trade deal with the EU, one big happy family, the EU is one of the largest markets around, why are they making the USA market seem as their must have, between Canada and the EU why can't they sell couple hundred frames?
How about the Commonwealth, with Brexit coming up it would be a golden option, unless of course, Brexit is in name only and the UK cannot get EU permission to push Canadian sales.
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 2:08 am

There is one little thing that can be done - and I do not know if BBD is willing to do this.

Under US law, there is a mechanism and process called a "suspension agreement". Basically the parties negotiate a settlement with the parties agreeing to terms of a deal that the US government also has to sign off on. I believe that since this includes a countervailing subsidy, that some input is needed from GOC, GOO, GOQ, and UK govt.

The terms are flexible and decided between the parties: agreements on price floors, quantitative limits, quarterly monitoring, etc.

The duties are suspended during the agreement period. And it remains in place until the terms are violated or the deal expires.

I've seen agreements on everything from steel plate, to tomatoes, to sugar.
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 2:08 am

CX747 wrote:
Overall, the US, Canada and the UK are allies. We shouldn't be treating one another this way. I hope they can all sit down and come to a fair decision for everyone involved.


Look at how the US & Canada (along with a few others) have objected to the deal the UK & EU have struck on agricultural tariffs as part of Brexit negotiations. That's not how allies should treat each other but it's how allies will treat each other when they see an advantage to be pressed (opening up the UK market to be swamped under by US, Canadian, New Zealand and South American products).

Trump will do what he wants and that will probably be the thing that wins him most votes which means siding with Boeing. Trudeau will side with Bombardier because of how bad a major company like that going out of business will be for him politically and May will dither about because she's a wounded leader with backstabbers surrounding her and she has Brexit on her plate.
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 2:08 am

leghorn wrote:
and let me say this, a trade war and an isolated U.S is the logical conclusion of the unreasonable actions of the Department of Commerce. The U.S. are the aggressors here and I will have no sympathy for them when their "acting out" blows up in their faces.
The DOC may imagine themselves righteous based on the rules they have constructed for themselves but they are being observed by others who frame policy and decide terms of trade abroad.


The US isn't the aggressor. The Canadian and UK governments used tax payer dollars to subsidize a product and keep their people employed on a program that isn't commercially viable. The only people ticked are the ones who got called out. Plenty of Boeing aircraft have been ordered worldwide since this decision.

They then decided to go dump this product in the US. Boeing said what the? The DOC looked into it and found Boeing to be correct. 300% correct to be exact. The glaring thing here is that neither the Canadians or Brits have said this didn't happen. They just want the US to look the other way. Well, MD and Lockheed went belly up in the commercial sectors the last time a government sponsored program took 30 years to be profitable. The DOC more than likely won't assist in a second attempt.
"History does not long entrust the care of freedom to the weak or timid." D. Eisenhower
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 2:25 am

ytz wrote:
Time for Nav Canada to increase fees for US registered aircraft transiting Canadian airspace..... Sure the FAA will retaliate. But that just makes a few vacation trips more expensive. On the other hand, every US flight going to Europe or Asia will now be at a disadvantage against their Asian and European competitors. If they cost us airframe jobs, it's time for us to show them, we can cost them airline jobs.


Cost you airframe jobs? You mean the ones you illegally subsidized to get? The one that you didn't earn legitimately? The ones you tried to keep by dumping your product in a foreign country?

BBD CHEATED AND GOT CAUGHT. Time to figure out what to do now that reality has finally hit the program. Overall, this is not big news in the US. BBD is going to get hit for breaking the law, because they are guilty.

Again, we are all Allies. Let's treat one another as such. Sell the CSeries for a reasonable price to US carriers and we can all move on.
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 2:29 am

washingtonflyer wrote:
There is one little thing that can be done - and I do not know if BBD is willing to do this.

Under US law, there is a mechanism and process called a "suspension agreement". Basically the parties negotiate a settlement with the parties agreeing to terms of a deal that the US government also has to sign off on. I believe that since this includes a countervailing subsidy, that some input is needed from GOC, GOO, GOQ, and UK govt.

The terms are flexible and decided between the parties: agreements on price floors, quantitative limits, quarterly monitoring, etc.

The duties are suspended during the agreement period. And it remains in place until the terms are violated or the deal expires.

I've seen agreements on everything from steel plate, to tomatoes, to sugar.


I like the idea and hope that can be accomplished. Overall though Boeing is hurt in the long run if another government backed program succeeds. Have the Canadian and UK government put +$20 Billion in it's pocket just like was done for BBD and we are good to move forward.
"History does not long entrust the care of freedom to the weak or timid." D. Eisenhower
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 3:09 am

iamlucky13 wrote:

If DoC found Bombardier's lack of responses contemptuous, I missed that reporting.



http://enforcement.trade.gov/download/f ... 100617.pdf

Commerce based Bombardier, Inc.’s (Bombardier) preliminary dumping margin on adverse facts available (AFA) because Bombardier failed to provide information requested by Commerce’s AD questionnaire. The Petitioner alleged one dumping margin in the petition. As AFA, Commerce applied the sole dumping margin calculated in the petition for Canadian exports of aircraft, which is 79.82 percent. This rate will apply to all other producers/exporters as well.
Last edited by LockheedBBD on Sat Oct 07, 2017 3:33 am, edited 1 time in total.
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 3:24 am

CX747 wrote:

Have the Canadian and UK government put +$20 Billion in it's pocket just like was done for BBD and we are good to move forward.


Can you provide a link to your source for the $20 Billion in subsidies? I would like to read about it.
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 5:21 am

CX747 wrote:
ytz wrote:
Time for Nav Canada to increase fees for US registered aircraft transiting Canadian airspace..... Sure the FAA will retaliate. But that just makes a few vacation trips more expensive. On the other hand, every US flight going to Europe or Asia will now be at a disadvantage against their Asian and European competitors. If they cost us airframe jobs, it's time for us to show them, we can cost them airline jobs.


Cost you airframe jobs? You mean the ones you illegally subsidized to get? The one that you didn't earn legitimately? The ones you tried to keep by dumping your product in a foreign country?

BBD CHEATED AND GOT CAUGHT. Time to figure out what to do now that reality has finally hit the program. Overall, this is not big news in the US. BBD is going to get hit for breaking the law, because they are guilty.

Again, we are all Allies. Let's treat one another as such. Sell the CSeries for a reasonable price to US carriers and we can all move on.

Great! And while you're at it, block Boeing from predatory pricing. Make a true "level playing field."

This is a schoolyard fight. Boeing is the bully, and BBD is the nerdy kid. The bully is always pushing the nerdy kid around, and the kid just can't get a break. Finally, the kid sees an opportunity to get back at the bully, but it's really just a setup, and now the bully is ratting the kid out to the teacher. The teacher just happens to be the bully's aunt, so she believes the bully's story, hook, line, and sinker. The nerd gets detention, has to wash the chalkboards, sweep the floors, and water the classroom plants for a year. Meanwhile, the bully has walked off with the nerd's lunch money.

At most, what should be happening is a slap on the wrist, a penalty specific to just the Delta deal so that the price is "fair," and a "don't do it again, or there will be more serious consequences." And even that, IMO, would be awfully generous to Boeing.

Quite frankly, I'm dismayed at the level of nationalism and protectionism that is being supported here on a.net; a site devoted to the the global industry that is aviation. I'd expect this on 4chan maybe, but not here. We're talking about one sale of 75 planes. That's a drop in the bucket compared to Boeing's order book. Boeing's suggestions of doom and gloom are the absolutely most pathetic of courtroom gymnastics. It's the legal/corporate equivalent of the worst fake soccer injury dive you've ever seen. It's a gross manipulation of the legal system.

Does anyone here actually believe that BBD has any intention of offering fire-sale prices on an ongoing basis, in order to completely destroy Boeing's (already pathetic) 737-7MAX sales? Since the DL deal, the only only significant order has been from AC. I would think that the lack of sales (in over 15 months!) would be evidence enough that BBD has no intentions of giving away their planes. This was a one-time loss leader sale. Delta knew how frustrated and desperate BBD were getting, and with the promise of becoming a major CSeries maintenance provider, they talked BBD into a bad deal.
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 10:56 am

bigjku wrote:
If the US subsidized a more efficient but otherwise uneconomical train engine...

More efficient, but otherwise uneconomical?
I am intrigued. How does that add up?
bigjku wrote:
It’s pretty simple. If the cost of production and the cost of R&D make the acquisition cost increase too much an operator then an operator can’t make back the acquisition premium over their existing cheaper options.

It's pretty simple you say. And yet I still don't understand it.
If the cost of production and the cost of R&D make the acquisition cost increase too much .... then despite the subsidies, the operator will not buy it, and it isn't a threat to the (cheaper) locally produced equivalent.
I'm sure the US is welcome to dump as many trains (or aircraft) in that category as they like, on any country. Quite who will buy them if they are more expensive, I can't say

I must be missing something here. Again, please help me understand your point.
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 12:10 pm

mjoelnir wrote:
But the factories of BBD are in Northern Ireland not in Ireland.


how many commute cross border?

If the NI conflict gets a refresh that is not without impact on Ireland proper.

The lever, assumed to exist, on the US here is the large irish derivation voter group at home.
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 12:36 pm

washingtonflyer wrote:
BBD refused to provide a Section D response at all. BBD notes in its press release that it hadn't manufactured a CS100 for Delta during the POI. That may or may not be true, but Section D deals with production of all aircraft - regardless of destination market during the POI. It did produce CS100s and CS300s and delivered them to European carriers in 2016 and 2017. So, to say that the company did not have the data is simply false.

As a practical and legal matter, the Federal courts have repeatedly ruled that as the administering agency, Commerce has the right and discretion to ask questions that it believes to be relevant to meeting its statutory duty. A party cannot pick and choose which questions to answer merely because its opinion of an issue differs from that of Commerce. Doing that strips the agency of its investigative mandate. BBD sought to strip Commerce of that mandate. And now BBD gets to pay the price for that decision.


I would have loved to see the production costs for any of the first 100 787's compared to the sales price for those frames.

This process is rigged against any manufacturer from outside the US.

Eventually it will lead to the US passengers paying more as airlines have to choose Boeing frames which Boeing knows it will not have to discount heavily.


Reminds me of the appalling cars Detroit used to produce before the Japanese took a reasonable foothold.
 
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par13del
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 12:57 pm

StTim wrote:
I would have loved to see the production costs for any of the first 100 787's compared to the sales price for those frames.

Head over to the numerous programming accounting threads talking about the 787 program, since the deferred production cost is north of how many frames they have sold or have on order, including the 4 frames written off and the millions spent on getting the terrible teens out of the door, I put it to you that it is irrelevant what any carrier paid for any single 787 frame, since the entire program at this point is not profitable based on program accounting.
The only difference with the 787 program is that they have a product which carriers want to buy and operate, so far the C-Series is struggling to get orders even in it home bases of Canada and Europe.
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 1:13 pm

aerolimani wrote:
CX747 wrote:
ytz wrote:
Time for Nav Canada to increase fees for US registered aircraft transiting Canadian airspace..... Sure the FAA will retaliate. But that just makes a few vacation trips more expensive. On the other hand, every US flight going to Europe or Asia will now be at a disadvantage against their Asian and European competitors. If they cost us airframe jobs, it's time for us to show them, we can cost them airline jobs.


Cost you airframe jobs? You mean the ones you illegally subsidized to get? The one that you didn't earn legitimately? The ones you tried to keep by dumping your product in a foreign country?

BBD CHEATED AND GOT CAUGHT. Time to figure out what to do now that reality has finally hit the program. Overall, this is not big news in the US. BBD is going to get hit for breaking the law, because they are guilty.

Again, we are all Allies. Let's treat one another as such. Sell the CSeries for a reasonable price to US carriers and we can all move on.

Great! And while you're at it, block Boeing from predatory pricing. Make a true "level playing field."

This is a schoolyard fight. Boeing is the bully, and BBD is the nerdy kid. The bully is always pushing the nerdy kid around, and the kid just can't get a break. Finally, the kid sees an opportunity to get back at the bully, but it's really just a setup, and now the bully is ratting the kid out to the teacher. The teacher just happens to be the bully's aunt, so she believes the bully's story, hook, line, and sinker. The nerd gets detention, has to wash the chalkboards, sweep the floors, and water the classroom plants for a year. Meanwhile, the bully has walked off with the nerd's lunch money.

At most, what should be happening is a slap on the wrist, a penalty specific to just the Delta deal so that the price is "fair," and a "don't do it again, or there will be more serious consequences." And even that, IMO, would be awfully generous to Boeing.

Quite frankly, I'm dismayed at the level of nationalism and protectionism that is being supported here on a.net; a site devoted to the the global industry that is aviation. I'd expect this on 4chan maybe, but not here. We're talking about one sale of 75 planes. That's a drop in the bucket compared to Boeing's order book. Boeing's suggestions of doom and gloom are the absolutely most pathetic of courtroom gymnastics. It's the legal/corporate equivalent of the worst fake soccer injury dive you've ever seen. It's a gross manipulation of the legal system.

Does anyone here actually believe that BBD has any intention of offering fire-sale prices on an ongoing basis, in order to completely destroy Boeing's (already pathetic) 737-7MAX sales? Since the DL deal, the only only significant order has been from AC. I would think that the lack of sales (in over 15 months!) would be evidence enough that BBD has no intentions of giving away their planes. This was a one-time loss leader sale. Delta knew how frustrated and desperate BBD were getting, and with the promise of becoming a major CSeries maintenance provider, they talked BBD into a bad deal.


I don’t think pricing below cost was a one time deal at all. I don’t think they can build the airplane for less than Boeing and Airbus can build larger products. I don’t think it’s actually all that close either because of the volume of those lines which are about 5 times the largest projected volume of the C series line.

Here is an article that covers Airbus being able to sell a bigger plane more cheaply. Just like what happened with Boeing at United.

http://www.macleans.ca/economy/business ... -c-series/

Here is an article showing how they are struggling to raise prices and don’t expect to make money until 2020 and this was before the cut rate Delta deal for the second article.

http://fortune.com/2016/06/04/bombardie ... et-orders/

http://business.financialpost.com/trans ... ries-dream

The fundamental problem remains. BBD needs to sell the plane for more money at present projected volumes to make any money. They can’t because Boeing and Airbus effectively put a price cap on what they can get because they are highly efficient making slightly larger aircraft. Their only way out of this trap would be to increase production rates drastically but the market they are in doesn’t call for that yet, they don’t have the orders and they damn sure don’t have the money to buy multiples more tooling to get it done. I would guess not a single plane currently under contract will cost less to build than the sales price.

They have run smack into the same issue that caused Boeing not to do the new small airplane. Except they are building at a 5th the volume Boeing would have projected for. They desperately wanted to build the plane on the engineering side. But you couldn’t make a business case for it. Why are people surprised that BBD can’t do it commercially with far less volume?
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 2:49 pm

SheikhDjibouti wrote:
bigjku wrote:
If the US subsidized a more efficient but otherwise uneconomical train engine...

More efficient, but otherwise uneconomical?
I am intrigued. How does that add up?
bigjku wrote:
It’s pretty simple. If the cost of production and the cost of R&D make the acquisition cost increase too much an operator then an operator can’t make back the acquisition premium over their existing cheaper options.

It's pretty simple you say. And yet I still don't understand it.
If the cost of production and the cost of R&D make the acquisition cost increase too much .... then despite the subsidies, the operator will not buy it, and it isn't a threat to the (cheaper) locally produced equivalent.
I'm sure the US is welcome to dump as many trains (or aircraft) in that category as they like, on any country. Quite who will buy them if they are more expensive, I can't say

I must be missing something here. Again, please help me understand your point.


The subsidies are the point here. Without them the sales price over the period of investment needs to pay for R&D, tooling and other non-recurring expenses, the cost to actually build each item and return a reasonable profit.

My contention is that if BBD was forced to sell the C series under terms commercial investors would find reasonable no one would buy it. This is why when BBD was looking to keep afloat prior to the actions of Quebec it couldn’t find sales. It kept getting underpriced by Boeing and Airbus.

In short for BBD to make money on this plane they need to sell it for an amount no one has proven willing to pay. They are only selling what they are by using government money to fill the cash hole they are creating with each sale.

It’s a more efficient product but the math is simple for airlines. These are basic numbers but say it will save me $250,000 a year in operating cost over an A320 or 737. I plan to run it for 10 years. How much more am I willing to pay for it? The math on that is pretty simple. I think BBD needs a premium over the cost of a 737/A320 that is well over what ifs efficiency margin can justify. My reason is it uses more advanced materials on a much smaller volume. That isn’t even accounting for the non recurring stuff that is mostly absorbed in the other two programs already.

When they were asking for a commercially viable price they couldn’t sell aircraft. They couldn’t discount below the cost of production because they had burned all their cash. Then they got money from the government and dropped the price and moved some orders. But the net effect if you flow through with all of it is that Quebec is basically paying part of the purchase price for Delta and they are doing that to create jobs in Quebec. If the fundamental comics behind producing the plane don’t change there will have to be more subsidies to make the math work for the next buyer.
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 2:59 pm

washingtonflyer wrote:
Nothing gets revealed to Boeing. Information submitted to the government agencies (Commerce and the Commission) is submitted pursuant to a protective order and the parties themselves may NOT view the other parties' confidential data.


A rather naive position and clobbered by reality. ( during the tanker shenanigans Airbus info was handed to Boeing is just one of many instances.)
Murphy is an optimist
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 3:32 pm

My reality is that I've been doing trade cases for nearly two decades and not once have I heard of an instance where an official from Commerce or an attorney who is a signatory to a protective order has given documents to their client that their client did not have access to. And I've worked on cases where the level of sensitivity and trade secrets are much higher than for BBD or Boeing.
 
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 4:26 pm

Boeing has been eerily quiet about this whole thing. Their supporters on here have been all proud and self-righteous, but what is the company itself saying? We know that Bombardier hasn't been quiet. They set up a whole separate website (the-plane-truth.com) to complain loudly and publicly. Perhaps Boeing is starting to see past the end of its nose?

From aviation analyst Adam Pilarski, a senior vice president with consulting firm Avitas. And yes, I know that Pilarski used to work for Douglas and Boeing.

"The danger for the U.S. is in setting a precedent for rivals to treat American aerospace companies badly, [Pilarksi] said.

By pushing the case before the U.S. International Trade Commission — a forum that's unilateral and therefore clearly biased — rather than before an international tribunal, Boeing will only encourage countries like China, Russia and Brazil that have big aerospace ambitions and large home markets to do the same to Boeing in the future, he said.

"You are giving your real competitors an excuse to say, if the U.S. can do this, we can do it," Pilarski said.


Also:
Richard Aboulafia, a prominent aviation analyst with the Teal Group, agreed, calling saying this week's ruling "a tactical victory but strategically a disaster" for Boeing.


And, if you take the time to look, you'll find plenty more articles like this one, from US sources. http://www.oregonlive.com/business/inde ... h_for.html

I do like the suggestion, in this article, that Bombardier now has a new marketing strategy. They can point out to buyers what a great plane it is. After all, Boeing is clearly afraid of it. 8-)

This whole thing is setting up a bad future for the USA, and for the world. America First is going to become America Alone. It's a sad time. I really wish things were different
 
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KarelXWB
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Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 4:32 pm

LockheedBBD wrote:
many321 wrote:
What do you expect when you have mental cases running the American government at the moment.


Can you blame them for protecting their own interests?


Sure, there's a good reason why countries have these anti-dumping laws. The issue here is the tariff is so much out of proportion that it is beyond any reality. A 80% tariff would have been more than enough to keep CSeries out of the US. I mean, 300% sounds almost hilarious.
What we leave behind is not as important as how we've lived.
 
StTim
Posts: 2519
Joined: Thu Aug 08, 2013 7:39 am

Re: U.S. Dept of Commerce backs Boeing in dispute with Bombardier

Sat Oct 07, 2017 4:44 pm

I am led to believe that the tariff (well the $80 million part) applies to all plans delivered to the US from International suppliers which are in the class 100-150 seats and a range of more than 2900nm

Scott Hamilton‏ @LeehamNews 2h2 hours ago
Replying to @StTim

No, 100-150 seats, 2,900nm range of more. Very carefully crafted complaint to exclude E195E2 2850nm.


Cleverly stops Embraer being able to extend the range of the E2.


This is protectionism plane and simple (oh and yes the typo there is intentional).

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