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Boeing and the US government recently killed the Canadian aviation industry by putting on 300% duties on our main manufacturer because of a government bailout i

Boeing and the US government recently killed the Canadian aviation industry by putting on 300% duties on our main manufacturer because of a government bailout it received. See: https://www.theglobeandmail.com/report-on-business/us-issues-final-ruling-upholds-duties-on-bombardier-c-series-planes/article37394931/ https://www.theglobeandmail.com/report-on-business/us-issues... As a result Bombardier, Canadian's only large aviation manufacturer, was sold to AirBus: https://www.theglobeandmail.com/report-on-business/bombardier-sells-majority-stake-in-c-series-to-airbus/article36610340/ https://www.theglobeandmail.com/report-on-business/bombardie... The cause was a Canadian province (equivalent to a US state) did a $1B equity investment in Bombardier in order to help it survive a tough spot -- a bailout. Thus 300% duties were imposed on the company as a result, thus killing any potential plane sales to the US. But if the US government bails out Boeing, should countries around the world also impose business destroying duties of 300% on Boeing because of the unfair government support? Or do business destroying duties of 300% only get imposed on the aviation industries of smaller countries who do not have as much clout?

leemailll 7y ago
Bombardier was not sold to airbus, but major share assets of one type of its airplane, the CSeries to airbus. Bombardier the company still holds 30% of the CSeries, while other types of planes not affected by the deal.
arcticbull 7y ago
The duties were also overturned in the end, but not before Bombardier gifted 50.01% of the C-Series program to Airbus so it had a chance of survival. The net result was Airbus rebranded the program the A220, committed to building US-destination A220 jets within the US to avoid tariffs anyways and while they significantly weakened one [small] competitor (Bombardier and by extension Investissement Québec) they massively empowered their real competitor (Airbus). Ultimately, their plan backfired and forced them to acquire a large stake in Embraer to remain nominally competitive (I say that because the C-Series planes are much better than similar Embarer aircraft, both longer range and more comfortable) -- all while simultaneously empowering Airbus. They also significantly soured their relationship with the Canadian government jeopardizing both current and future military procurement opportunities. This was an unmitigated failure on their part. (EDIT) To be clear, Bombardier wasn't sold to Airbus, they gifted majority control of the C-Series program to Airbus. The new equity split is 50.01% Airbus, 31% Bombardier and 19% Invesissment Québec.
- PaulHoule 7y ago
  Both the 2nd generation E-Jets and the A220 beat the pants of the 737 with the caveat that they are smaller planes that carry fewer passengers. They also are smaller planes that have better comfort than the 737 in most respects; it is like the Japanese cars of the 1970s which were big on the inside and small on the outside compared to American cars of the time. You have to fly it to believe it. I could see these eating into the 737/A320 market from the small side the same way that the 777/787 classes ate into the 747 market. The A220/E2 Jets would have been even more appealing had the airliners known that 737 MAX pilots will require simulator training. (And they will... Boeing will probably delay the 737 MAX return to service by trying to insist that they won't, but the FAA has one way to get credibility back, and that is requiring simulator training of an MCAS failure, just as A320 pilots need training on what to do if the fly-by-wire system gets in a degraded state)
  - CydeWeys 7y ago
    The crazy thing is that Boeing hasn't designed a new clean-sheet small jet since 1967, when the 737 came out. Prior to that they were iterating on a pretty rapid cadence, with the 707, 717, 720, and 727, and then they just got stuck in an absolute rut and have been increasingly paying the consequences as the 737 no longer stacks up favorably against the much newer clean-sheet designs put out by their competitors. To give an idea of how antiquated the 737 is, one of its primary design considerations was that it could land at primitive airports -- its low ground clearance is caused by the need to be able to fit a folding staircase inside the aircraft itself. It didn't even require a stair car, let alone the ubiquitous jetways that we see everywhere nowadays. And this design consideration is the main cause of the 737 MAX problem. I wonder, if the merger hadn't happened and Boeing hadn't been taken over by penny-pinchers, what would Boeing's small jet offering look like now? Would they still be iterating on the same obsolete design? Was there some new replacement small jet already in the early design stages that got canned?
    - DocTomoe 7y ago
      > its low ground clearance is caused by the need to be able to fit a folding staircase inside the aircraft itself. Which incidentally is the major reason why it is the Ryanair main aircraft.
consp 7y ago
Both Boeing and Airbus have (somewhat credibly) argued the other is getting subsidies already. Would that really change anything? Bombardier draw the short straw as it was smaller and wasn't able to combat the duopoly of Boeing/Airbus. (Embraer, Sukhoi and Irkut are also in the game but more in niche market shares).
- bhouston 7y ago
  > Bombardier draw the short straw as it was smaller and wasn't able to combat the duopoly of Boeing/Airbus. It was able to compete though on the merit of its products before the duties came into play. The duties were designed to kill its momentum and it did -- look at the loss of orders in 2017 compared to 2016. But once the issue is resolved, the orders in 2018 are huge. https://en.wikipedia.org/wiki/List_of_Airbus_A220_orders_and_deliveries https://en.wikipedia.org/wiki/List_of_Airbus_A220_orders_and... This was a classic case of stifling threatening competition via government regulation.
  - 420codebro 7y ago
    On the merit of their products? Lol the bailout seems to indicate otherwise mcbrobro.
  - WillPostForFood 7y ago
    It was able to compete though on the merit of its products Merit, and a billion dollar subsidy from the government. There is clearly government interference on both sides. https://www.cbc.ca/news/business/bombardier-quebec-deal-1.3648707 https://www.cbc.ca/news/business/bombardier-quebec-deal-1.36...
    - wbl 7y ago
      Capital investment on terms available to all local production is not a subsidy. It's industrial policy.
  - deleted 7y ago
    [deleted]
weberc2 7y ago
> But if the US government bails out Boeing, should countries around the world also impose business destroying duties of 300% on Boeing because of the unfair government support? It’s not a question of fairness but of self-interest. If it’s in those countries’ best interest (accounting for things like soured international relationships and whathaveyou) then the answer is “yes”.
jayd16 7y ago
When you ask "should" what kind of answer are you looking for? Moral or economic advantage?
Brakenshire 7y ago
Given America-first and China-first attitudes, smaller countries will have to band together into trade blocs, either minimalist like the TPP, or maximalist like the EU, in order to get fair treatment. It’s the principle reason why Brexit is a disaster for the UK.
- noir_lord 7y ago
  You mean walking away from and souring our relationship with the largest trading bloc in the world just as two major powers are gearing up to fight a massive economic fight for supremacy is a bad idea (not to mention all the others). I wish someone had put that on the side of the bus, maybe then my compatriots would have believed it. It's just a shame that "While the EU is not perfect and probably does need some reform, it is on balance a net positive for the UK and not anywhere near as bad as the press would have you believe" also didn't fit on a bus.
  - kmonsen 7y ago
    The best chance of reforming EU would be with UK still in it :-( Brexit is just a loose for everyone. Well except Russia of course.
  - mrkstu 7y ago
    To an extent- but in reality I would be shocked if the US wasn’t willing to offer a pretty full fat free trade agreement to a post hard-brexit UK.
    - mrunkel 7y ago
      Of course they are, but on their terms since the UK is by far the weaker in that relationship. Which means open access for their products into the UK market without out many of the consumer protections that the EU mandates.
dalbasal 7y ago
Even if pissing off the US wasn't a major issue, banning Boeing would give airbus a monopoly... So I guess to answer your question... Yes.
x0x0 7y ago
Do you really think there's any principle here? Besides, well, the strong do as they will and the weak endure as they must?
Maven911 7y ago
And sad to say but it's one of the few large tech/engineering companies left in Montreal (they have operations worldwide but largest presence there) and with Bombardiers future in the air (no pun intended), it might leave even less to desire in Montreal's tech community
- Zenbit_UX 7y ago
  We have a pretty strong tech startup culture here in Montreal, and even without that there's always the gaming industry here.

leemailll 7y ago

Bombardier was not sold to airbus, but major share assets of one type of its airplane, the CSeries to airbus. Bombardier the company still holds 30% of the CSeries, while other types of planes not affected by the deal.

arcticbull 7y ago

The duties were also overturned in the end, but not before Bombardier gifted 50.01% of the C-Series program to Airbus so it had a chance of survival. The net result was Airbus rebranded the program the A220, committed to building US-destination A220 jets within the US to avoid tariffs anyways and while they significantly weakened one [small] competitor (Bombardier and by extension Investissement Québec) they massively empowered their real competitor (Airbus). Ultimately, their plan backfired and forced them to acquire a large stake in Embraer to remain nominally competitive (I say that because the C-Series planes are much better than similar Embarer aircraft, both longer range and more comfortable) -- all while simultaneously empowering Airbus. They also significantly soured their relationship with the Canadian government jeopardizing both current and future military procurement opportunities. This was an unmitigated failure on their part. (EDIT) To be clear, Bombardier wasn't sold to Airbus, they gifted majority control of the C-Series program to Airbus. The new equity split is 50.01% Airbus, 31% Bombardier and 19% Invesissment Québec.

PaulHoule 7y ago
Both the 2nd generation E-Jets and the A220 beat the pants of the 737 with the caveat that they are smaller planes that carry fewer passengers. They also are smaller planes that have better comfort than the 737 in most respects; it is like the Japanese cars of the 1970s which were big on the inside and small on the outside compared to American cars of the time. You have to fly it to believe it. I could see these eating into the 737/A320 market from the small side the same way that the 777/787 classes ate into the 747 market. The A220/E2 Jets would have been even more appealing had the airliners known that 737 MAX pilots will require simulator training. (And they will... Boeing will probably delay the 737 MAX return to service by trying to insist that they won't, but the FAA has one way to get credibility back, and that is requiring simulator training of an MCAS failure, just as A320 pilots need training on what to do if the fly-by-wire system gets in a degraded state)
- CydeWeys 7y ago
  The crazy thing is that Boeing hasn't designed a new clean-sheet small jet since 1967, when the 737 came out. Prior to that they were iterating on a pretty rapid cadence, with the 707, 717, 720, and 727, and then they just got stuck in an absolute rut and have been increasingly paying the consequences as the 737 no longer stacks up favorably against the much newer clean-sheet designs put out by their competitors. To give an idea of how antiquated the 737 is, one of its primary design considerations was that it could land at primitive airports -- its low ground clearance is caused by the need to be able to fit a folding staircase inside the aircraft itself. It didn't even require a stair car, let alone the ubiquitous jetways that we see everywhere nowadays. And this design consideration is the main cause of the 737 MAX problem. I wonder, if the merger hadn't happened and Boeing hadn't been taken over by penny-pinchers, what would Boeing's small jet offering look like now? Would they still be iterating on the same obsolete design? Was there some new replacement small jet already in the early design stages that got canned?
  - DocTomoe 7y ago
    > its low ground clearance is caused by the need to be able to fit a folding staircase inside the aircraft itself. Which incidentally is the major reason why it is the Ryanair main aircraft.

consp 7y ago

Both Boeing and Airbus have (somewhat credibly) argued the other is getting subsidies already. Would that really change anything? Bombardier draw the short straw as it was smaller and wasn't able to combat the duopoly of Boeing/Airbus. (Embraer, Sukhoi and Irkut are also in the game but more in niche market shares).

bhouston 7y ago
> Bombardier draw the short straw as it was smaller and wasn't able to combat the duopoly of Boeing/Airbus. It was able to compete though on the merit of its products before the duties came into play. The duties were designed to kill its momentum and it did -- look at the loss of orders in 2017 compared to 2016. But once the issue is resolved, the orders in 2018 are huge. https://en.wikipedia.org/wiki/List_of_Airbus_A220_orders_and_deliveries https://en.wikipedia.org/wiki/List_of_Airbus_A220_orders_and... This was a classic case of stifling threatening competition via government regulation.
- 420codebro 7y ago
  On the merit of their products? Lol the bailout seems to indicate otherwise mcbrobro.
- WillPostForFood 7y ago
  It was able to compete though on the merit of its products Merit, and a billion dollar subsidy from the government. There is clearly government interference on both sides. https://www.cbc.ca/news/business/bombardier-quebec-deal-1.3648707 https://www.cbc.ca/news/business/bombardier-quebec-deal-1.36...
  - wbl 7y ago
    Capital investment on terms available to all local production is not a subsidy. It's industrial policy.
- deleted 7y ago
  [deleted]

weberc2 7y ago

> But if the US government bails out Boeing, should countries around the world also impose business destroying duties of 300% on Boeing because of the unfair government support? It’s not a question of fairness but of self-interest. If it’s in those countries’ best interest (accounting for things like soured international relationships and whathaveyou) then the answer is “yes”.

jayd16 7y ago

When you ask "should" what kind of answer are you looking for? Moral or economic advantage?

Brakenshire 7y ago

Given America-first and China-first attitudes, smaller countries will have to band together into trade blocs, either minimalist like the TPP, or maximalist like the EU, in order to get fair treatment. It’s the principle reason why Brexit is a disaster for the UK.

noir_lord 7y ago
You mean walking away from and souring our relationship with the largest trading bloc in the world just as two major powers are gearing up to fight a massive economic fight for supremacy is a bad idea (not to mention all the others). I wish someone had put that on the side of the bus, maybe then my compatriots would have believed it. It's just a shame that "While the EU is not perfect and probably does need some reform, it is on balance a net positive for the UK and not anywhere near as bad as the press would have you believe" also didn't fit on a bus.
- kmonsen 7y ago
  The best chance of reforming EU would be with UK still in it :-( Brexit is just a loose for everyone. Well except Russia of course.
- mrkstu 7y ago
  To an extent- but in reality I would be shocked if the US wasn’t willing to offer a pretty full fat free trade agreement to a post hard-brexit UK.
  - mrunkel 7y ago
    Of course they are, but on their terms since the UK is by far the weaker in that relationship. Which means open access for their products into the UK market without out many of the consumer protections that the EU mandates.

dalbasal 7y ago

Even if pissing off the US wasn't a major issue, banning Boeing would give airbus a monopoly... So I guess to answer your question... Yes.

x0x0 7y ago

Do you really think there's any principle here? Besides, well, the strong do as they will and the weak endure as they must?

Maven911 7y ago

And sad to say but it's one of the few large tech/engineering companies left in Montreal (they have operations worldwide but largest presence there) and with Bombardiers future in the air (no pun intended), it might leave even less to desire in Montreal's tech community

Zenbit_UX 7y ago
We have a pretty strong tech startup culture here in Montreal, and even without that there's always the gaming industry here.