Dipesh Dhital Airbus, Bombardier Deal: When, What and Why?
When and How did it start?
- In May, Boeing asked U.S. Department of Commerce to investigate allegations that Bombardier was selling its C-Series aircraft in the US at unfairly low prices made possible through Canadian government subsidies.
- U.S. Department of Commerce ruled in favor of Boeing.
- Bombardier was slapped almost 300% tariff (U.S. Department of Commerce imposed tariffs of 219% + U.S. International Trade Administration’s extra tariff of 79.82%)
About the Airbus Bombardier Deal
- Bombardier needed a strategic move. Bombardier and Airbus started discussing potential deals.
- Bombardier announced partnership with Airbus on Oct 16, 2017.
- As part of the deal, Airbus will take a majority stake in Bombardier’s 100-150-seat C-Series jetliner program.
- With this, Airbus now owns 50.1% of the C-Series program, Bombardier owns 31% and a Canadian state investment agency owns the remaining 19%.
- The companies said that they will jointly expand the aircaft’s production to a new facility in Mobile, Alabama.
- Airbus already operates a production facility in Mobile, Alabama since 2015, where it produces its A320 aircraft.
Could this move help Bombardier avoid the import duty? Or bring in more conflict?
- Boeing has accused this move as a “questionable deal between two heavily state-subsidized competitors to skirt the recent findings of the U.S. government,” as per a Boeing spokesman.
- Bombardier and Airbus insist that this deal was motivated by a strategic business move and not with the motive to circumvent US laws.
- They also insist that this deal will instead help bring more jobs to the US.
Will this move help solve Bombardier’s ongoing dispute involving US and Canada or instead bring in Britain, France, Germany and Spain into the dispute, as these are Airbus’ home turf?
