Wed | Dec 13, 2017

UK 'bitterly disappointed' as US slaps tariff on Bombardier

Published:Thursday | September 28, 2017 | 12:03 AM
The Bombardier Aerospace plant in Belfast, Northern Ireland.

United Kingdom Prime Minister Theresa May said on Wednesday that she was "bitterly disappointed" with the United States government's decision to slap duties of almost 220 per cent on Bombardier's C series aircraft, which threatens more than 4,000 jobs in Northern Ireland.

May took to Twitter to vow that she would work with the Montreal-based company to protect jobs. The prime minister had previously lobbied President Donald Trump after US aircraft maker Boeing alleged that Bombardier used unfair government subsidies to sell planes at artificially low prices.

May has a key alliance with Northern Ireland's Democratic Unionist Party to support her minority government in Parliament.

Defence secretary Michael Fallon warned Boeing that its behaviour could jeopardise future U.K. defence contracts though the defence ministry said that existing contracts with Boeing would be honoured.

 

Contracts in place

 

"We have contracts in place with Boeing for new maritime patrol aircraft and for Apache attack helicopters, and they will also be bidding for other defence work, and this kind of behaviour clearly could jeopardise our future relationship with Boeing," Fallon said.

But unions accused the prime minister of failing to protect workers. Ross Murdoch, national officer for the GMB union, said the ruling was a "hammer blow" to Belfast, where Bombardier makes aircraft wings and fuselages.

"Theresa May has been asleep at the wheel when she could and should have been fighting to protect these workers," Murdoch said. "It's high time she woke up."

The U.S. Commerce Department on Tuesday ruled in favour of Boeing, saying "the subsidisation of goods by foreign governments is something that the Trump administration takes very seriously".

The department is scheduled to issue a final ruling in the case on December 12.

Boeing alleges that Bombardier received at least US$3 billion in subsidies from the governments of Britain, Canada and the province of Quebec, allowing it to sell planes to U.S.-based Delta Air Lines for less than the cost of production. The Chicago-based aircraft maker asked the Commerce Department and the U.S. International Trade Commission to investigate what it called "predatory pricing".

Delta last year agreed to buy 75 of Bombardier's new CS100 aircraft, with an option for as many as 50 more. Bombardier valued the firm order at US$5.6 billion based on the list price of the aircraft.

Delta says Boeing doesn't even make the 100-seat planes it needs for short- to medium-range trips.

Bombardier called the decision "absurd" and accused Boeing of trying to stifle competition.

Commerce Secretary Wilbur Ross, on a visit to Hong Kong, told reporters that part of the problem was Bombardier's lack of cooperation with the investigation.