U.K.'s May Drawn Into Spat Between Boeing and Bombardier
September 16 2017 - 8:29AM
Dow Jones News
By Doug Cameron
A Boeing Co. trade complaint against Bombardier Inc. has
triggered a trans-Atlantic row.
When British Prime Minister Theresa May meets on Monday in
Ottawa with her Canadian counterpart, Justin Trudeau, the leaders
are expected to discuss ways to counter Boeing's claim that
Bombardier is selling its new CSeries jet too cheaply in the
U.S.
Canada and Bombardier deny that and say the aerospace company
isn't receiving government subsidies. Boeing's claim "is
unjustifiable and based solely on Boeing's desire to limit
competition," a spokesman for Canadian Foreign Minister Chrystia
Freeland said.
The aerospace giant's push has puzzled analysts because it could
jeopardize a potential $5 billion sale of Boeing jet fighters to
Canada that would help sustain a production line in St. Louis.
Canada broke off talks last month in protest at Boeing's charges
against the CSeries.
Plane makers including Boeing routinely sell new plane models
below what they cost to make to win market traction, analysts say.
Bombardier's planned CSeries is smaller than any Boeing jet, and
the U.S. company didn't make an offer last year on the contract
that Bombardier secured from Delta Air Lines Inc. Bombardier has a
backlog of 360 of the jets, and Delta is due to take the first of
its 75 planes next spring.
"It's not picking on Canada," Boeing Chief Executive Dennis
Muilenburg said in May after the company lodged its complaint with
the U.S. Department of Commerce. "We have to have a fair and level
playing field globally."
Industry experts believe Boeing is seeking to prevent Bombardier
from expanding its product line and emulating the rise of Airbus
SE, which over the past 30 years has claimed half the commercial
jetliner market.
Bombardier said its jet competes in a different market segment
from Boeing. Executives said the dispute isn't hindering sales of
the jets, though they haven't booked a new CSeries order this
year.
The dispute comes amid negotiations over the future of the North
American Free Trade Agreement and other disputes between the U.S.
and Canada over lumber and dairy exports. Mrs. May has been drawn
in spat because the dispute could affect a factory in Northern
Ireland that makes parts for the CSeries. Mrs. May relies on
Northern Ireland's Democratic Unionist Party to maintain a majority
in the British Parliament.
She raised the matter with President Donald Trump in a Sept. 5
phone call. Greg Clark, the British trade minister, met with Mr.
Muilenburg at Boeing's Chicago headquarters last month to press for
case to be dropped.
The Commerce Department is expected to make an initial decision
in the week of Sept. 25. The U.S. has said it wouldn't identify
potential penalties until next year.
Paul Vieira contributed to this article.
Write to Doug Cameron at doug.cameron@wsj.com
(END) Dow Jones Newswires
September 16, 2017 08:14 ET (12:14 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.
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