Bombardier Victorious in C Series Dispute with Boeing

 - January 26, 2018, 3:25 PM
Bombardier can now sell its C Series jets in the U.S. unencumbered by tariffs. (Photo: Bombardier)

The U.S. International Trade Commission has found in favor of Bombardier in the case filed by Boeing over the sale of 75 C Series CS100 jets to Delta Air Lines at a price the U.S. company characterized as far below the airplanes’ cost of production. The USITC ruling means that Boeing suffered no harm from the sale, thereby superseding U.S. Commerce Department rulings that called for the imposition of tariffs equal to nearly 300 percent of the price of the airplanes.

“Today’s decision is a victory for innovation, competition, and the rule of law,” said Bombardier in a written statement. “With this matter behind us, we are moving full speed ahead with finalizing our partnership with Airbus. Integration planning is going well and we look forward to delivering the C Series to the U.S. market so that U.S. airlines and the U.S. flying public can enjoy the many benefits of this remarkable aircraft.”

For its part, Boeing said it would review the commission's opinions in more detail and suggested a possible appeal. “Boeing remains confident in the facts of our case and will continue to document any harm to Boeing and our extensive U.S. supply chain that results from illegal subsidies and dumped pricing,” it pledged. “We will not stand by as Bombardier’s illegal business practices continue to harm American workers and the aerospace industry they support. Global trade only works if everyone adheres to the rules we have all agreed to. That’s a belief we will continue to defend.”

In its complaint filed in April, Boeing claimed that Bombardier sold the airplanes for $19.6 million each, or some $13.8 million less than they cost to manufacture, thanks to illegal subsidies provided by the governments of Canada and Quebec. Delta’s April 2016 order came six months after the province of Quebec agreed to infuse $1 billion in the then-financially strapped C Series program, giving it a 49.5-percent stake in a limited partnership with Bombardier. Less than a year later the Canadian federal government agreed to grant Bombardier C$372.5 million in interest-free loans for both the C Series and the Global 7000 business jet.

The decision comes as a huge boost for Bombardier, whose C Series project effectively faced a loss of access to the U.S. market if the USITC ruled to uphold Commerce Department decisions in late September and early October that specified antidumping tariffs of 79.82 percent and countervailing measures amounting to 219.63 percent of the price of each airplane.

The Delta order called for deliveries to start this spring, but when Airbus agreed in mid-October to take a majority stake in the C Series program and assemble some of them at the site of its A320 plant in Mobile, Alabama, it looked as though Delta would have to accept a delay in deliveries while Airbus built the new U.S. assembly line. Now, the unexpected USITC ruling in favor of Bombardier means that Delta can take airplanes built in Mirabel, Quebec, the site of the primary C Series line. However, neither Airbus nor Bombardier have indicated whether or not a victory in the antidumping dispute would mean a change in plans for the source of Delta’s airplanes.