6 ms·

It might benefit Bombardier and their investors, but if the C series jet was going to be manufactured in Canada by Canadian workers, this ends up harming those

It might benefit Bombardier and their investors, but if the C series jet was going to be manufactured in Canada by Canadian workers, this ends up harming those (potential?) jobs in favour of American workers who previously never had any sort of relationship with Bombardier. To me, the whole situation is a schoolyard example of "having your cake and eating it too".

sf_rob 9y ago
The alternative may have been "having no cake" since they would not be profitable without successfully fighting the 300% tariff.
- tareqak 9y ago
  I actually agree. To clarify my position further, I am specifically accusing the United States and Boeing as the ones who are trying to "have their cake and eat it too" in this matter.
  - cloakandswagger 9y ago
    Is there something inherently wrong with looking out for your own best interests? Or in this case, the best interests of your country?
    - UnoriginalGuy 9y ago
      So by extension you'd be happy if the EU imposed a 300% tax on Boeing imports? Even if it meant Americans lost jobs. That's what this attitude results in: trade war.
    - andy_ppp 9y ago
      Yes, the whole point of free trade means that we can buy the best mobile phones or the best computer chips or the best washing machines. Without free markets you end up having worse products win which is bad for everyone.
      - kpil 9y ago
        A particular line of economics just looks at the money in, the product out, ignores all complications, and concludes that it's globally best for mankind if we send money on ships and get back cheap sneakers, regardless if they are made by slave workers or whatever. It's not only the quality of the products that compete, it's living standards, health laws, worker protection, environmental protection, social welfare, healthcare, educations and human rights that compete. If I live in a (economically) large enough country that trades with another country that fail providing reasonable levels of all of the above for their own people, mostly to the gain of some oligark or another, there is little reason to offer totally free trade. An optimal tariff, possibly even invested back in the originating country - or even used to fund healthcare or education - is most likely globally less maximized in term of number of cheap items per dollar, but could still help stimulate both economies, maybe help the poorest, and hopefully avoiding a race to the bottom for the 99%. [edit]... This doesn't mean that a 300% tariff on airplanes is justified between EU, US and Canada. Or maybe we in EU can fund your healthcare if you just buy from Airbus in the future...
        cbhl 9y ago
        > It's not only the quality of the products that compete, it's living standards, health laws, worker protection, environmental protection, social welfare, healthcare, educations and human rights that compete. Canada has single-payer ("free") health care, and plans to introduce a national carbon tax. There's a narrow socio-economic gap in school results[0]. Tell me again how the United States has better health care, environmental protection, and education? [0] http://www.bbc.com/news/business-40708421 http://www.bbc.com/news/business-40708421
        kpil 9y ago
        No, the tariffs should be pointed in the other direction. It is however probably not efficient for a smaller economical power to set up tariffs like that. But I think the problem is more related to China, India and other upcoming "tigers".
        andy_ppp 9y ago
    - Silhouette 9y ago
      Ethically and legally, probably not. Protectionism has been around forever, and any government obviously has a responsibility to its own people to act in their interests. But economically and in terms of good foreign relations, definitely. Closing the gates in such an overtly hostile way to foreign businesses competing with your home grown ones hurts international trade, and ultimately that can end up badly for everyone over the long term, even if it brings some short term benefit.
      - kobeya 9y ago
        > hurts international trade, and ultimately that can end up badly for everyone over the long term, even if it brings some short term benefit The jury's out on this one. The effects international free trade can have on existing industries can be devastating as jobs are rerouted from rural manufacturing areas to the neighborhood of transshipment ports. The US since the adoption of NAFTA has resulted in a sharpening of the divide between rural America and the cities, and has brought mass poverty, unemployment, and associated ills to communities that were previously dependent on protected factory jobs. And although new jobs have been created in the cities, these jobs have been fewer, higher paying, and requiring a different skillset. As a result of free trade, we therefore have: (1) higher unemployment, (2) higher concentration of wealth, (3) a great migration that has disrupted rural and family identities, and (4) increased instances of opioid and meth additions and related problems (violence, burglaries, etc.) across the board but especially in those same "left behind" communities. But hey, our GDP is up. So by the only metric economists look at, I guess it was a success.
        Silhouette 9y ago
        Indeed. The disputed benefits of international free trade are exactly why I wrote "that can end up badly for everyone over the long term". (Of course there may be other downsides to interfering with international free trade beyond the immediate economic implications, if you upset other countries with which you would like good relations in other respects.)
    - tareqak 9y ago
      When the United States, Canada, and Mexico negotiated NAFTA, they explicitly chose to agree on a mutual set of best interests over that of any one members specific best interests (minus some explicitly carved out exclusions that were also negotiated). Unfortunately, some parameters of the agreement were either not negotiated at the time or forgotten about. One such parameter is the definition of a government subsidy, and what actions or set of actions constitutes to be as such. Proponents of the United States variety of capitalism preach and espouse (or at least used to) free trade as both gospel and a kind objective truth while ignorant (at times on purpose and at times sufficiently unaware) of how big business and the government are bedfellows scratching each others backs (big sugar, the corn lobby, big oil, the automakers, other agribusinesses such as dairy, telecom, Silicon Valley and other tech companies, the military-industrial complex, and commercial aviation to name just a few: Boeing straddles the last two industries). In comparison, Canada has more hybrid approach somewhere between a market economy and a command economy practically necessitated by the confluence having a large land area, a relatively small population, and an economic, cultural, and military powerhouse for a next-door neighbour. And yes, similar sort of mutual government/business back-scratching does occur in Canada. However, most if not all of the policies that Canada has is mostly to prevent itself from being economically and culturally drowned-out/overwhelmed (do notice that I left out militarily). In spite of the investments that the various levels of Canadian government make, they readily allow foreign investors and corporations to buy or merge with large, iconic Canadian businesses after assessing the impact through mandatory reviews much like US Congress does (Molson Coors, Target buying Zellers from the Hudson's Bay company, and Wendy's merging with Tim Horton's, Tim Horton's later repatriating itself, then merging again with Burger King. TL;DR There is nothing inherently wrong with looking out for your own best interests. But, there is something wrong with the pot calling the kettle black (hypocrisy). https://en.wikipedia.org/wiki/Molson_Brewery https://en.wikipedia.org/wiki/Molson_Brewery https://en.wikipedia.org/wiki/Molson_Coors_Brewing_Company https://en.wikipedia.org/wiki/Molson_Coors_Brewing_Company https://en.wikipedia.org/wiki/Zellers#2010.E2.80.932013:_Leases_acquisition_by_Target.2C_liquidation_and_closures https://en.wikipedia.org/wiki/Zellers#2010.E2.80.932013:_Lea... https://en.wikipedia.org/wiki/Tim_Hortons https://en.wikipedia.org/wiki/Tim_Hortons
    - glenndebacker 9y ago
      Not if you also allow other countries for looking out for their own best interests. And that is a big problem (among a boatload of others) with the current American administration. It is not America First but America only. That with no consideration for their "allies" or applying a different set of standards to others...
    - Arnt 9y ago
      What are those best interests? In this case the Trump administration wanted to protect Boeing against Bombardier by denying access to a key market, making Bombardier's entire C-* project unprofitable. The outcome (so far) is that Airbus/Bombardier can still make the airplane and export to any country from either Canada or the US, whichever has the best trade conditions. This does not sound favourable for Boeing's export business. AIUI this isn't an unusual outcome: A government wants to protect domestic business against imports, accidentally hurts its own exports and offends someone in the process. The domestic business may be its best interest but that's hardly obvious.
    - sangnoir 9y ago
      > Is there something inherently wrong with looking out for your own best interests? No. However, "best interests" can get very complex when considering the subsequent reaction of other parties - please see the iterated prisoner's dilemma.
wrnu 9y ago
It seems like only the planes bound for US airlines will be manufactured in the US.
- ChuckMcM 9y ago
  This is, I think, the key feature. While the US does consume a bunch of planes, it is by no means the only market. What Delta did for Bombardier was to give them a 'light house' customer[1] to show the world that this plane was worth considering. [1] The 'light house customer' metaphor was a favorite of Chris Bennet's at NetApp. They were a customer that if they adopted your product, others in the same business would see your product as a "safe harbor" and would be willing to buy your stuff too. The unwillingness to be 'first' in an industry where one plane represents a big chunk of capital is strong.
  - inferiorhuman 9y ago
    I figured that Swissair was that lighthouse customer. They've had very positive feedback for the C-series, which is quite impressive for a brand new model. Honestly I doubt Delta would've even considered the C-series if they were to be the first major customer.
    - ChuckMcM 9y ago
      It does look like Lufthansa/Swissair was the earlier 'major' customer, although this graph (https://en.wikipedia.org/wiki/List_of_Bombardier_CSeries_orders_and_deliveries#Orders.2C_commitments_.26_deliveries_graph https://en.wikipedia.org/wiki/List_of_Bombardier_CSeries_ord...) shows why Boeing complained about Delta :-)
      - inferiorhuman 9y ago
        IMO the big reason that Boeing is going after BBD is not the CS100, but the prospect of a CS500 which would compete directly with the antiquated 737. Boeing has, for now, left Embraer alone because the E2 can't be stretched as much as the C-series. The hypocrisy is strong with Boeing though. Boeing's received over $8 billion in tax breaks (errrr subsidies) from the state of Washington alone. https://www.seattletimes.com/seattle-news/boeings-historic-tax-break-from-state-even-bigger-than-thought/ https://www.seattletimes.com/seattle-news/boeings-historic-t...
netsharc 9y ago
A Guardian article https://www.theguardian.com/business/nils-pratley-on-finance/2017/oct/17/airbuss-ingenious-bombardier-plan-is-comeuppance-for-boeing https://www.theguardian.com/business/nils-pratley-on-finance... says: > Arch-rival Airbus has swooped from the wings to grab majority control of the C-Series and proclaim that the 300% tariffs can be side-stepped via the simple remedy of conducting the final assembly of planes destined for US customers in Alabama. So, how much of a final assembly counts as final assembly? I remember a story of how Chinese shirtmakers circumvented tariffs against Made in China shirts: they sent the body of the shirt and sleeves to Hong Kong, workers in Hong Kong sewed the sleeves onto the shirt, slap "Made in Hong Kong" on it, and problem solved... Apparently I'm not the one asking this question: http://www.chicagotribune.com/business/ct-biz-airbus-bombardier-deal-20171017-story.html http://www.chicagotribune.com/business/ct-biz-airbus-bombard... > "There is a legal question of how much of the parts and components and value-added needs to actually happen in the U.S. for tariffs to no longer apply," said Chad Bown, a senior fellow with the Peterson Institute for International Economics. "You can't just fly an airplane to Alabama and say it's made in America."
- usrusr 9y ago
  When in doubt, apply the magic of cross-site IP licencing to coax the value-add distribution into whatever shape necessary.
- pingec 9y ago
  Pipistrel from Slovenia had a similar problem. IIRC they had to ship parts to USA/Australia and assemble them over there. Now they moved part of production to Italy and this seems to have circumvented some of these problems.
- ecommerceguy 9y ago
  Embraer (Brazil) does final assembly of their private jet line in Melbourne Florida. I toured the factory. How it works is the fuselage is boated from Brazil and then assembled in FL. Wiring, hydraulics ect all done in Fl. Perhaps a peek at their public statements can shed some light as to when the nexus occurs.
- pasbesoin 9y ago
jpollock 9y ago
My expectation is that C-series jets for the US market would be produced in the US, planes for Europe are probably better produced in Canada to make use of the Canada/EU FTA. From the article: "a second assembly line for the 100- to 150-seat plane will be set up at Airbus's facility in Mobile, Ala., so the plane can be sold in the United States" By the way, I'm convinced that a big reason that small car manufacturing has moved to Mexico is the list of free trade agreements they have.
deleted 9y ago
[deleted]

sf_rob 9y ago

The alternative may have been "having no cake" since they would not be profitable without successfully fighting the 300% tariff.

tareqak 9y ago
I actually agree. To clarify my position further, I am specifically accusing the United States and Boeing as the ones who are trying to "have their cake and eat it too" in this matter.
- cloakandswagger 9y ago
  Is there something inherently wrong with looking out for your own best interests? Or in this case, the best interests of your country?
  - UnoriginalGuy 9y ago
    So by extension you'd be happy if the EU imposed a 300% tax on Boeing imports? Even if it meant Americans lost jobs. That's what this attitude results in: trade war.
  - andy_ppp 9y ago
    Yes, the whole point of free trade means that we can buy the best mobile phones or the best computer chips or the best washing machines. Without free markets you end up having worse products win which is bad for everyone.
    - kpil 9y ago
      A particular line of economics just looks at the money in, the product out, ignores all complications, and concludes that it's globally best for mankind if we send money on ships and get back cheap sneakers, regardless if they are made by slave workers or whatever. It's not only the quality of the products that compete, it's living standards, health laws, worker protection, environmental protection, social welfare, healthcare, educations and human rights that compete. If I live in a (economically) large enough country that trades with another country that fail providing reasonable levels of all of the above for their own people, mostly to the gain of some oligark or another, there is little reason to offer totally free trade. An optimal tariff, possibly even invested back in the originating country - or even used to fund healthcare or education - is most likely globally less maximized in term of number of cheap items per dollar, but could still help stimulate both economies, maybe help the poorest, and hopefully avoiding a race to the bottom for the 99%. [edit]... This doesn't mean that a 300% tariff on airplanes is justified between EU, US and Canada. Or maybe we in EU can fund your healthcare if you just buy from Airbus in the future...
      - cbhl 9y ago
        > It's not only the quality of the products that compete, it's living standards, health laws, worker protection, environmental protection, social welfare, healthcare, educations and human rights that compete. Canada has single-payer ("free") health care, and plans to introduce a national carbon tax. There's a narrow socio-economic gap in school results[0]. Tell me again how the United States has better health care, environmental protection, and education? [0] http://www.bbc.com/news/business-40708421 http://www.bbc.com/news/business-40708421
        kpil 9y ago
        No, the tariffs should be pointed in the other direction. It is however probably not efficient for a smaller economical power to set up tariffs like that. But I think the problem is more related to China, India and other upcoming "tigers".
      - andy_ppp 9y ago
  - Silhouette 9y ago
    Ethically and legally, probably not. Protectionism has been around forever, and any government obviously has a responsibility to its own people to act in their interests. But economically and in terms of good foreign relations, definitely. Closing the gates in such an overtly hostile way to foreign businesses competing with your home grown ones hurts international trade, and ultimately that can end up badly for everyone over the long term, even if it brings some short term benefit.
    - kobeya 9y ago
      > hurts international trade, and ultimately that can end up badly for everyone over the long term, even if it brings some short term benefit The jury's out on this one. The effects international free trade can have on existing industries can be devastating as jobs are rerouted from rural manufacturing areas to the neighborhood of transshipment ports. The US since the adoption of NAFTA has resulted in a sharpening of the divide between rural America and the cities, and has brought mass poverty, unemployment, and associated ills to communities that were previously dependent on protected factory jobs. And although new jobs have been created in the cities, these jobs have been fewer, higher paying, and requiring a different skillset. As a result of free trade, we therefore have: (1) higher unemployment, (2) higher concentration of wealth, (3) a great migration that has disrupted rural and family identities, and (4) increased instances of opioid and meth additions and related problems (violence, burglaries, etc.) across the board but especially in those same "left behind" communities. But hey, our GDP is up. So by the only metric economists look at, I guess it was a success.
      - Silhouette 9y ago
        Indeed. The disputed benefits of international free trade are exactly why I wrote "that can end up badly for everyone over the long term". (Of course there may be other downsides to interfering with international free trade beyond the immediate economic implications, if you upset other countries with which you would like good relations in other respects.)
  - tareqak 9y ago
    When the United States, Canada, and Mexico negotiated NAFTA, they explicitly chose to agree on a mutual set of best interests over that of any one members specific best interests (minus some explicitly carved out exclusions that were also negotiated). Unfortunately, some parameters of the agreement were either not negotiated at the time or forgotten about. One such parameter is the definition of a government subsidy, and what actions or set of actions constitutes to be as such. Proponents of the United States variety of capitalism preach and espouse (or at least used to) free trade as both gospel and a kind objective truth while ignorant (at times on purpose and at times sufficiently unaware) of how big business and the government are bedfellows scratching each others backs (big sugar, the corn lobby, big oil, the automakers, other agribusinesses such as dairy, telecom, Silicon Valley and other tech companies, the military-industrial complex, and commercial aviation to name just a few: Boeing straddles the last two industries). In comparison, Canada has more hybrid approach somewhere between a market economy and a command economy practically necessitated by the confluence having a large land area, a relatively small population, and an economic, cultural, and military powerhouse for a next-door neighbour. And yes, similar sort of mutual government/business back-scratching does occur in Canada. However, most if not all of the policies that Canada has is mostly to prevent itself from being economically and culturally drowned-out/overwhelmed (do notice that I left out militarily). In spite of the investments that the various levels of Canadian government make, they readily allow foreign investors and corporations to buy or merge with large, iconic Canadian businesses after assessing the impact through mandatory reviews much like US Congress does (Molson Coors, Target buying Zellers from the Hudson's Bay company, and Wendy's merging with Tim Horton's, Tim Horton's later repatriating itself, then merging again with Burger King. TL;DR There is nothing inherently wrong with looking out for your own best interests. But, there is something wrong with the pot calling the kettle black (hypocrisy). https://en.wikipedia.org/wiki/Molson_Brewery https://en.wikipedia.org/wiki/Molson_Brewery https://en.wikipedia.org/wiki/Molson_Coors_Brewing_Company https://en.wikipedia.org/wiki/Molson_Coors_Brewing_Company https://en.wikipedia.org/wiki/Zellers#2010.E2.80.932013:_Leases_acquisition_by_Target.2C_liquidation_and_closures https://en.wikipedia.org/wiki/Zellers#2010.E2.80.932013:_Lea... https://en.wikipedia.org/wiki/Tim_Hortons https://en.wikipedia.org/wiki/Tim_Hortons
  - glenndebacker 9y ago
    Not if you also allow other countries for looking out for their own best interests. And that is a big problem (among a boatload of others) with the current American administration. It is not America First but America only. That with no consideration for their "allies" or applying a different set of standards to others...
  - Arnt 9y ago
    What are those best interests? In this case the Trump administration wanted to protect Boeing against Bombardier by denying access to a key market, making Bombardier's entire C-* project unprofitable. The outcome (so far) is that Airbus/Bombardier can still make the airplane and export to any country from either Canada or the US, whichever has the best trade conditions. This does not sound favourable for Boeing's export business. AIUI this isn't an unusual outcome: A government wants to protect domestic business against imports, accidentally hurts its own exports and offends someone in the process. The domestic business may be its best interest but that's hardly obvious.
  - sangnoir 9y ago
    > Is there something inherently wrong with looking out for your own best interests? No. However, "best interests" can get very complex when considering the subsequent reaction of other parties - please see the iterated prisoner's dilemma.

wrnu 9y ago

It seems like only the planes bound for US airlines will be manufactured in the US.

ChuckMcM 9y ago
This is, I think, the key feature. While the US does consume a bunch of planes, it is by no means the only market. What Delta did for Bombardier was to give them a 'light house' customer[1] to show the world that this plane was worth considering. [1] The 'light house customer' metaphor was a favorite of Chris Bennet's at NetApp. They were a customer that if they adopted your product, others in the same business would see your product as a "safe harbor" and would be willing to buy your stuff too. The unwillingness to be 'first' in an industry where one plane represents a big chunk of capital is strong.
- inferiorhuman 9y ago
  I figured that Swissair was that lighthouse customer. They've had very positive feedback for the C-series, which is quite impressive for a brand new model. Honestly I doubt Delta would've even considered the C-series if they were to be the first major customer.
  - ChuckMcM 9y ago
    It does look like Lufthansa/Swissair was the earlier 'major' customer, although this graph (https://en.wikipedia.org/wiki/List_of_Bombardier_CSeries_orders_and_deliveries#Orders.2C_commitments_.26_deliveries_graph https://en.wikipedia.org/wiki/List_of_Bombardier_CSeries_ord...) shows why Boeing complained about Delta :-)
    - inferiorhuman 9y ago
      IMO the big reason that Boeing is going after BBD is not the CS100, but the prospect of a CS500 which would compete directly with the antiquated 737. Boeing has, for now, left Embraer alone because the E2 can't be stretched as much as the C-series. The hypocrisy is strong with Boeing though. Boeing's received over $8 billion in tax breaks (errrr subsidies) from the state of Washington alone. https://www.seattletimes.com/seattle-news/boeings-historic-tax-break-from-state-even-bigger-than-thought/ https://www.seattletimes.com/seattle-news/boeings-historic-t...

netsharc 9y ago

A Guardian article https://www.theguardian.com/business/nils-pratley-on-finance/2017/oct/17/airbuss-ingenious-bombardier-plan-is-comeuppance-for-boeing https://www.theguardian.com/business/nils-pratley-on-finance... says: > Arch-rival Airbus has swooped from the wings to grab majority control of the C-Series and proclaim that the 300% tariffs can be side-stepped via the simple remedy of conducting the final assembly of planes destined for US customers in Alabama. So, how much of a final assembly counts as final assembly? I remember a story of how Chinese shirtmakers circumvented tariffs against Made in China shirts: they sent the body of the shirt and sleeves to Hong Kong, workers in Hong Kong sewed the sleeves onto the shirt, slap "Made in Hong Kong" on it, and problem solved... Apparently I'm not the one asking this question: http://www.chicagotribune.com/business/ct-biz-airbus-bombardier-deal-20171017-story.html http://www.chicagotribune.com/business/ct-biz-airbus-bombard... > "There is a legal question of how much of the parts and components and value-added needs to actually happen in the U.S. for tariffs to no longer apply," said Chad Bown, a senior fellow with the Peterson Institute for International Economics. "You can't just fly an airplane to Alabama and say it's made in America."

usrusr 9y ago
When in doubt, apply the magic of cross-site IP licencing to coax the value-add distribution into whatever shape necessary.
pingec 9y ago
Pipistrel from Slovenia had a similar problem. IIRC they had to ship parts to USA/Australia and assemble them over there. Now they moved part of production to Italy and this seems to have circumvented some of these problems.
ecommerceguy 9y ago
Embraer (Brazil) does final assembly of their private jet line in Melbourne Florida. I toured the factory. How it works is the fuselage is boated from Brazil and then assembled in FL. Wiring, hydraulics ect all done in Fl. Perhaps a peek at their public statements can shed some light as to when the nexus occurs.
pasbesoin 9y ago

jpollock 9y ago

My expectation is that C-series jets for the US market would be produced in the US, planes for Europe are probably better produced in Canada to make use of the Canada/EU FTA. From the article: "a second assembly line for the 100- to 150-seat plane will be set up at Airbus's facility in Mobile, Ala., so the plane can be sold in the United States" By the way, I'm convinced that a big reason that small car manufacturing has moved to Mexico is the list of free trade agreements they have.

deleted 9y ago

[deleted]