Bombardier wins US trade case taken by Boeing

The US International Trade Commission (ITC) has ruled in favour of Bombardier in a trade dispute with rival aircraft-maker Boeing. The result had been expected to go in favour of the US aerospace giant. The US administration had threatened to impose duties of 292 per cent on imports of Bombardier’s CSeries aircraft.

The ruling is welcome news for Bombardier’s 1,000 employees in the North, and means the airline can start shipping its CSeries jets to Delta Air Lines as scheduled.

Workers in the North were said to be “jubilant”. Bombardier’s Belfast plant currently manufactures the wings for the CSeries jets, and Bombardier had previously warned that the CSeries programme was “critical” to the long term future of its entire operations.

The CSeries programme directly supports 1,000 workers or 25 per cent of Bombardier’s total workforce in the North. Around 200 suppliers in Northern Ireland, the Republic and the UK also provide materials and services to the CSeries programme, while many more are involved in supply chain tiers.

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The ITC was asked to approve a US commerce department recommendation to hit the Canadian company’s CSeries jet with a near-300 per cent duty on sales to American carriers.

Boeing claimed Bombardier was able to sell the aircraft at “absurdly low prices” in the US after receiving $3 billion in government subsidies.

Bombardier said Boeing’s case had no merit, and that its actual intent was to force Bombardier out of the 100-seat market as it looks to acquire a competing maker of small jets.

On Friday the ITC said US companies and workers were not being harmed by sales of 100- to-150-seat aircraft from Canada. The judges on the panel voted unanimously in favour of the ruling. The decision also opens the door for Bombardier to add new US customers while potentially easing trade tensions with Canada and the UK.

The dispute began in April last year after Boeing complained about a Delta Air Lines order for 75 CSeries jets. Boeing has claimed Bombardier sold each 108-133-seat CS100 for just $19.6 million (€15.8m), arguing they actually cost $33.2 million (€26.7m) to make.

Union leaders had feared that US president Donald Trump’s “America first” policy would influence the outcome of the ITC’s long-running investigation on the issue. A senior UK government minister had previously said that it expected the ITC to back the commerce department.

Supply chain

On Friday evening, following the ITC vote in Washington, Steve Turner, Unite assistant general secretary, said Bombardier’s Northern Ireland workforce and its supply chain could now breathe “a huge sigh of relief” that the ITC had dismissed Boeing’s complaint.

Unite had led a campaign against the proposed trade tariffs, and he said the union’s members and shop stewards would be delighted with the result.

“The CSeries is a world-beating aircraft made by world-class workers. There can be no backsliding from the US government on this decision.

“Unite looks forward to continuing to work with Bombardier to secure future sales and investment to ensure a bright future for Northern Ireland workers and the thousands across the UK in the supply chain.”

Bombardier said the ITC decision was “a victory for innovation, competition, and the rule of law”.

“The CSeries is the most innovative and efficient new aircraft in a generation. Its development and production represent thousands of jobs in the United States, Canada, and the United Kingdom,” the Montreal-headquartered group said.

“We are extremely proud of our employees, investors and suppliers who have worked together to bring this remarkable aircraft to the market. With this matter behind us, we are moving full speed ahead with finalising our partnership with Airbus.”

Industry leaders in the North believe the decision will deliver a boost for not just the local manufacturing sector but the overhaul economy.

Stephen Kelly, the chief executive of industry group Manufacturing NI, said the ITC vote “removed the huge worry that has been hanging over the heads of not just Bombardier workers but the entire supply chain in the North”.

Components

Bombardier’s Belfast facility manufacturers the primary structural components of every CSeries wing using its patented resin transfer infusion process. It alone is responsible for the design, manufacture and assembly of the advanced composite wings for every CSeries aircraft.

Currently 1,000 of Bombardier’s total workforce in Northern Ireland – 25 per cent – including engineers, operations employees and support staff – are involved in the CSeries production in Belfast but it was forecasted that within four years this could have ramped up to 60 per cent of the workforce depending on sales of the CSeries aircraft.

Bombardier shares surged 7.8 per cent to C$3.30 at 2:33pm in Toronto after climbing as much as 11 per cent for the biggest intraday gain in three months. Boeing fell less than 1 per cent to $342.09.