United Kingdom warns Boeing it could lose defence contracts over Bombardier dispute

Bombardier Inc. is facing one of its biggest crises in years after a punitive ruling from the US threatened to make the Canadian manufacturer's key CSeries jet all but unsellable and its train operations were left isolated by a deal between European rivals.

The punishing duty was announced in a preliminary ruling from the U.S. Commerce Department on Tuesday evening.

But Boeing builds different planes than Bombardier and did not compete for the Delta contract, Leitao noted in an interview with The Canadian Press on the sidelines of a financial conference in NY.

Commerce's announcement and accompanying fact sheet on the preliminary duty order did not provide any rationale or methodology for how it calculated the 220 percent duty. Bombardier has disputed the $19 million sales figure. Bombardier had become the largest western trainmaker following the 2001 purchase of Daimler AG's Germany-based Adtranz arm.

Boeing filed its complaint with the USA authorities after Bombardier sealed a $5.6bn deal with Delta Air Lines to sell 75 of its C Series jets past year.

The CSeries came in more than two years late and about $2-billion over budget.

The key will be whether US officials find that the deal between Bombardier and Delta actually hurt Boeing's business, an issue that's not expected to yield a finding for at least six months.

The DoC has carried out its own investigation and said it had made a preliminary determination that imports should be subject to a 219.63% import tariff, although it will continue to evaluate the figure.

Earlier this week US air carrier JetBlue sided with Bombardier in the dispute.

'The Prime Minister went running to Northern Ireland and the DUP when her job security was threatened.

"Subsidies enabled Bombardier to dump its product into the U.S. market, harming aerospace workers in the United States and throughout Boeing's global supply chain", it claimed.

A general view of the Bombardier Aerospace plant in Belfast Northern Ireland
Image The plant produces the wings for C Series airliners

"The U.S. values its relationships with Canada, but even our closest allies must play by the rules", said Secretary Ross.

Both parties will have to wait for a final decision due in February.

That decision isn't expected until sometime next year, possibly May or June.

Ms Foster said: "This is a very disappointing determination, but it is not the end of the process and there are further steps that will follow".

The grounds for Boeing's complaint focused on a £135 million investment by Northern Ireland's powersharing administration and the UK Government to establish the C-Series manufacturing site in Belfast.

There are not that many U.S. countervailing orders that are this high, but it is lower than the 256% final duties slapped on Chinese cold-rolled steel a year ago.

The firm said the decision was "divorced from the reality about the financing of multibillion-dollar aircraft programmes".

Boeing alleges that Bombardier received at least $3 billion in subsidies from the governments of Britain, Canada and the province of Quebec, allowing it to sell planes to US -based Delta Air Lines for less than the cost of production.

Hours before the decision, Bombardier was left out in the cold when Germany's Siemens spurned it as a partner for a major rail merger in favor of France's Alstom.

The company contends that the plane it's trying to import is "more efficient, more comfortable, and quieter".

A final determination by Commerce is not expected until December 19.


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