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As background: the Quebec government bought $1B worth of the 'C Series program' (in terms of share value, who knows what that means, and it's a murky thing), wh

As background: the Quebec government bought $1B worth of the 'C Series program' (in terms of share value, who knows what that means, and it's a murky thing), which is the primary source of concern I believe. Of course one could argue Boeing receives massive 'subsidies' from the US government in terms of pork-laden defence spending contracts. And other things, like incentives for various factories etc.. Airbus receives massive benefits from their network of R&D centres affiliated with Universities. It's almost a farce to talk about aircraft manufacture as 'purely free trade' - its de-facto a partly nationalized industry everywhere. There would be 0 large planes in the sky if governments were not involved.

moomin 9y ago
This: aircraft financing is a morass of government subsidies and every trade dispute (of which it seems like there's always one) smacks of pots calling out kettles. In other news, Bombardier is a brand of beer in the U.K. And that headline was rather confusing until I got into the article.
majormajor 9y ago
> Of course one could argue Boeing receives massive 'subsidies' from the US government in terms of pork-laden defence spending contracts. Were their defense programs (which includes clients outside the US, one of the interesting aspects of this move on their part, as they still want to sell Canada military planes) subsidizing their commercial operations, why would they not simply shut the commercial side down and keep more of that sweet, sweet, defense money as pure profit? Of course, if it doesn't, why doesn't Lockheed build out a commercial division? Do the technologies for each application just diverge too far to make it an irresistible combo?
- AnodyneComplex 9y ago
  I think the idea is that Boeing gets a big head start on some commercial applications. E.g. they build a military cargo aircraft and can bill all of the R&D to the govt, then quickly convert the plans to something UPS wants. Probably similarly for flight control software, electronics etc. Though I'm not sure how much transfer you would see now that the designs for commercial planes are so mature.
- _Codemonkeyism 9y ago
  Why throw good money away? "subsidizing their commercial operations, why would they not simply shut the commercial side down and keep more of that sweet, sweet, defense money as pure profit?" They are not subsidizing commercial operations with money, commercial operations is not operating on a loss long term. One small example, having billions of defense income makes your debt much cheaper. If they even need debt. From working in an enterprise company it's common to move money around on a zero interest rate basis. One part needs a billion $ to develop something or for marketing? Done. Some years later it gives that money "back". Zero interest. It was amazing.
  - alexasmyths 9y ago
    Getting cheaper debt means subsidization of one line of business from another. Also - government spending is often more predictable and long term and provides a solid operating basis upon which to do other things. And of course is the R&D and know-how overlap, in addition to all of the other things.
    - _Codemonkeyism 9y ago
      I'm not getting your argument "They are not subsidizing commercial operations with money" "Getting cheaper debt means subsidization of one line of business from another."
VMG 9y ago
> There would be 0 large planes in the sky if governments were not involved. There would be as many as the market demands
- alexasmyths 9y ago
  "There would be as many as the market demands" I disagree. There are many, many industries wherein barriers to entry are far too significant for private capital to take the risks - moreover - especially in areas of innovation, some things would not exist. The internet itself would not have existed without having first been developed by the military, and then by academia. Were it not to have been built - what 'startup' in 1965 was going to spend 30 years developing protocols, selling 'it' (whatever 'it' was in terms of a product) to universities etc. Think GPS. Who's going to invent this tech out of nothing, and pay for a satellite program (back in the day when it was obscenely expensive to put stuff in space) for a market that does not exist? What's the business plan in 1965 for a 'GPS startup'? Aircraft is much the same way. Europeans are not stupid - they have smart enough capital and R&D, but the only way Airbus got off the ground was by massive political intervention. Same for Nuclear Energy and some other forms of energy development. And all of this aside from the fact that so much advancement came out of WW2 (and other wars) - which is R&D that the industry receives as a free, externalized benefit.
  - nickpp 9y ago
    Totally, like an Electric Car! What private company would ever be able to invest in R&D and especially in the necessary charging infrastructure? Only a Government can have the resources and vision to create an electric car. Without Governments there would be 0 electric cars on the road.
    - vkou 9y ago
      Tesla was kept afloat by EV tax credits and government loans. I'm afraid you'll have to find John Galt in another castle.
      - 9y ago
nickpp 9y ago
> There would be 0 large planes in the sky if governments were not involved. Absolutely. Because there are NO private smaller plane building companies who would gladly design and build larger planes if the market asked for them. If the market itself was not deeply corrupted by massive government intervention...
- caf 9y ago
  They might gladly do it, but they would also need someone to gladly lend them the large amount of capital required, which is the bigger ask.
  - cm2187 9y ago
    Plus I believe the market is very much state backed. Negotiations often involve the manufacturing countries that will apply pressure or incentives. So it's not exactly a free market either.
  - nickpp 9y ago
    Banks?! Investment funds?! Bonds? Stock?! Pretty much any open Capital Market?! To imagine that only an all-knowing and all-powerful Government can do such thing is a lack of imagination and putting too much trust into a type of organization that has been proven over and over again at worst monopolistic and corrupted and at best incompetent.
    - alexasmyths 9y ago
      "Banks?! Investment funds?! Bonds? Stock?! Pretty much any open Capital Market?!" Zero of them. There is $0 available for anyone wanting to spend billions of dollars developing risky technology for a market that does not exist. Nuclear power came from the Manhattan project. Jet engines. Large aircraft. GPS. The Internet. All of those come from defence spending and would not have come to fruition from private markets. Your thesis is dismissed by the fact that there are zero large aircraft makers in the world that exist without having been created by - and - supported by governments. If what you said is true: Airbus and the new Chinese aircraft company would have been made long ago by 'private investors'. Even the sales cycle for large aircraft depends on the diplomatic corps of nations. Sales of large aircraft are often tied to other geopolitical issues.

moomin 9y ago

This: aircraft financing is a morass of government subsidies and every trade dispute (of which it seems like there's always one) smacks of pots calling out kettles. In other news, Bombardier is a brand of beer in the U.K. And that headline was rather confusing until I got into the article.

majormajor 9y ago

> Of course one could argue Boeing receives massive 'subsidies' from the US government in terms of pork-laden defence spending contracts. Were their defense programs (which includes clients outside the US, one of the interesting aspects of this move on their part, as they still want to sell Canada military planes) subsidizing their commercial operations, why would they not simply shut the commercial side down and keep more of that sweet, sweet, defense money as pure profit? Of course, if it doesn't, why doesn't Lockheed build out a commercial division? Do the technologies for each application just diverge too far to make it an irresistible combo?

AnodyneComplex 9y ago
I think the idea is that Boeing gets a big head start on some commercial applications. E.g. they build a military cargo aircraft and can bill all of the R&D to the govt, then quickly convert the plans to something UPS wants. Probably similarly for flight control software, electronics etc. Though I'm not sure how much transfer you would see now that the designs for commercial planes are so mature.
_Codemonkeyism 9y ago
Why throw good money away? "subsidizing their commercial operations, why would they not simply shut the commercial side down and keep more of that sweet, sweet, defense money as pure profit?" They are not subsidizing commercial operations with money, commercial operations is not operating on a loss long term. One small example, having billions of defense income makes your debt much cheaper. If they even need debt. From working in an enterprise company it's common to move money around on a zero interest rate basis. One part needs a billion $ to develop something or for marketing? Done. Some years later it gives that money "back". Zero interest. It was amazing.
- alexasmyths 9y ago
  Getting cheaper debt means subsidization of one line of business from another. Also - government spending is often more predictable and long term and provides a solid operating basis upon which to do other things. And of course is the R&D and know-how overlap, in addition to all of the other things.
  - _Codemonkeyism 9y ago
    I'm not getting your argument "They are not subsidizing commercial operations with money" "Getting cheaper debt means subsidization of one line of business from another."

VMG 9y ago

> There would be 0 large planes in the sky if governments were not involved. There would be as many as the market demands

alexasmyths 9y ago
"There would be as many as the market demands" I disagree. There are many, many industries wherein barriers to entry are far too significant for private capital to take the risks - moreover - especially in areas of innovation, some things would not exist. The internet itself would not have existed without having first been developed by the military, and then by academia. Were it not to have been built - what 'startup' in 1965 was going to spend 30 years developing protocols, selling 'it' (whatever 'it' was in terms of a product) to universities etc. Think GPS. Who's going to invent this tech out of nothing, and pay for a satellite program (back in the day when it was obscenely expensive to put stuff in space) for a market that does not exist? What's the business plan in 1965 for a 'GPS startup'? Aircraft is much the same way. Europeans are not stupid - they have smart enough capital and R&D, but the only way Airbus got off the ground was by massive political intervention. Same for Nuclear Energy and some other forms of energy development. And all of this aside from the fact that so much advancement came out of WW2 (and other wars) - which is R&D that the industry receives as a free, externalized benefit.
- nickpp 9y ago
  Totally, like an Electric Car! What private company would ever be able to invest in R&D and especially in the necessary charging infrastructure? Only a Government can have the resources and vision to create an electric car. Without Governments there would be 0 electric cars on the road.
  - vkou 9y ago
    Tesla was kept afloat by EV tax credits and government loans. I'm afraid you'll have to find John Galt in another castle.
    - 9y ago

nickpp 9y ago

> There would be 0 large planes in the sky if governments were not involved. Absolutely. Because there are NO private smaller plane building companies who would gladly design and build larger planes if the market asked for them. If the market itself was not deeply corrupted by massive government intervention...

caf 9y ago
They might gladly do it, but they would also need someone to gladly lend them the large amount of capital required, which is the bigger ask.
- cm2187 9y ago
  Plus I believe the market is very much state backed. Negotiations often involve the manufacturing countries that will apply pressure or incentives. So it's not exactly a free market either.
- nickpp 9y ago
  Banks?! Investment funds?! Bonds? Stock?! Pretty much any open Capital Market?! To imagine that only an all-knowing and all-powerful Government can do such thing is a lack of imagination and putting too much trust into a type of organization that has been proven over and over again at worst monopolistic and corrupted and at best incompetent.
  - alexasmyths 9y ago
    "Banks?! Investment funds?! Bonds? Stock?! Pretty much any open Capital Market?!" Zero of them. There is $0 available for anyone wanting to spend billions of dollars developing risky technology for a market that does not exist. Nuclear power came from the Manhattan project. Jet engines. Large aircraft. GPS. The Internet. All of those come from defence spending and would not have come to fruition from private markets. Your thesis is dismissed by the fact that there are zero large aircraft makers in the world that exist without having been created by - and - supported by governments. If what you said is true: Airbus and the new Chinese aircraft company would have been made long ago by 'private investors'. Even the sales cycle for large aircraft depends on the diplomatic corps of nations. Sales of large aircraft are often tied to other geopolitical issues.