Two Sides Trade Accusations Over C Series Aircraft Subsidies

The U.S. International Trade Commission (ITC) held a hearing Monday on Boeing's complaint that Canadian planemaker Bombardier improperly used government subsidies to "dump" C Series airplanes in the U.S. market, giving the Canadian company a competitive advantage over Boeing in the single-aisle market.

In a statement released after the hearing, Boeing said that it had brought the case seeking enforcement of U.S. trade law, which mirrors the widely-accepted rules of international trade adopted by most WTO member nations, including Canada. "The resulting Department of Commerce and ITC investigations are part of a longstanding, transparent, and rigorous fact-based process for resolving precisely these sorts of commercial trade disputes," Boeing said in the statement. "Today’s hearing was simply the next step in that process, as the ITC considered extensive evidence that underscored the harm Bombardier’s unlawful actions have caused U.S. industry.

“These investigations have already established beyond question that Bombardier has taken billions of dollars in illegal government subsidies to prop up its C Series program. The C Series would not even exist at this point but for those subsidies. The investigations have also left no doubt Bombardier used these government funds to dump aircraft into the U.S. market at absurdly low prices, millions below their cost of production and millions below the price of the same aircraft in Canada. Bombardier’s conduct is flatly inconsistent with U.S. trade law, and it has caused severe harm to Boeing, its employees, and its suppliers.

“Boeing welcomes competition, but it must be competition on a level playing field. Bombardier can sell their aircraft anywhere in the world, so long as they follow the law and comply with the trade rules we have all agreed to,” the company said.

Bombardier has a different view of the situation, and also released a statement supporting its position. “We are very pleased with the evidence presented today by Bombardier, Delta, and others demonstrating that Boeing’s petition is an unfounded assault on airlines, the flying public, and the U.S. aerospace industry," said the statement released by Mike Nadolski, Bombardier Vice President Communications and Public Affairs. "That has been true since the start of the investigation, and recent developments make it even clearer.

"Most significantly, the Bombardier and Airbus C Series partnership will include the construction of a new U.S. manufacturing facility in Alabama. This facility will provide U.S. airlines with a U.S.-built plane thereby eliminating any possibility of Boeing being harmed by imports.

"Bombardier estimates that the new Alabama assembly line will add 400 to 500 direct jobs in the United States, along with thousands more indirect and induced U.S. jobs. It will also bring approximately $300 million in new foreign direct investment to the United States. These new U.S. jobs and investment are in addition to the 22,700 jobs already supported by Bombardier’s C Series through its U.S. supply base.

"The Commission also heard clear evidence today that the C Series simply does not threaten Boeing. Boeing did not compete in the Delta campaign. It has not made a plane sized to Delta’s needs for many years, since it stopped producing the 717 and 737-600. Moreover, Boeing has acknowledged that it has oversold its 737 production capabilities and has a backlog of more than 4,300 aircraft orders.

"Bombardier’s innovative spirit led us to create the C Series, which is more comfortable, reliable, fuel efficient, and environmentally friendly than anything else in the market. The U.S. flying public and U.S. airlines should not be precluded from enjoying these benefits, especially given the tremendous positive impact the C Series brings to the U.S. aerospace industry,” Nadolski concluded.

(Source: News releases. Image from file)

FMI: www.boeing.com, www.bombardier.com