Thursday, December 21, 2017

Bombardier CEO: Boeing's unfair trade complaint is 'ridiculous,' our sales practices are the same

Bombardier CEO Alain Bellemare on Thursday defended the discounting of new airplanes, a day after the Trump administration threw more support behind U.S. aerospace giant Boeing in a bitter trade dispute with its Canadian rival.

Boeing has complained that Bombardier had received unfair government subsidies and dumped narrow-body jets below cost to No. 2 U.S. carrier Delta Air Lines.

The airline agreed to buy at least 75 of the Canadian planes last year, but their delivery is uncertain as the case intensifies. The U.S. Commerce Department on Wednesday upheld duties of nearly 300 percent on the C Series jets, tariffs that could render the planes unaffordable for Delta or other U.S. carriers.

Bombardier doesn't deny that Delta received a good price. Early customers for a fresh product rarely pay list prices as discounting is common to draw interest and attention to new planes.

"When you launch a new program you have aggressive pricing to start with," Bellemare said in an interview with CNBC. "Boeing does the same thing."

The International Trade Commission is scheduled to make a final determination by February if Boeing was harmed by Bombardier's practices, as the Chicago-based company alleges. Boeing, Bombardier and Delta presented arguments to the ITC this week. Boeing said Bombardier hurt its chances of selling its 737 airplane in the U.S., which Bombardier denies.

In a twist, European aerospace company Airbus, Boeing's chief rival, swooped in October, agreeing to buy a majority stake in the struggling C Series program.

Bombardier plans to build the planes in Mobile, Alabama, where Airbus assembles narrow-body jets. The plan would create a new wrinkle because the planes would effectively be a U.S. product.

"There's no case here," Bombardier's Bellemare said, calling the complaint "ridiculous."

(Leslie Josephs - CNBC

No comments: