The United States Department of Commerce has found Bombardier Aerospace guilty of dumping its C Series aircraft in the US. The decision threatens the future of up to 4,500 jobs in Belfast, where wings for the aircraft are made.
Bombardier’s all-new jetliner, which cost at least $6 billion to develop, will now be harder to sell in the world’s largest aviation market.
The US Commerce Department slapped import duties of 220 per cent on the C Series plane.
Boeing accused the Canadian firm of selling its planes in the US market below the cost of production and of being in receipt of illegal subsidies.
Trade unions in Northern Ireland last night warned that the ruling “poses a direct and very serious threat to 4,500 Bombardier jobs” in Northern Ireland.
Around 1,000 people are currently directly employed on the C Series aircraft in the North, according to the Unite trade union.
The preliminary determination threatens to upend Bombardier’s planned deliveries next year to Delta Air Lines, which ordered at least 75 jets with a list value of more than $5 billion.
The US penalties create a new hurdle for Bombardier chief executive Alain Bellemare, who is trying to turn the company around after the C Series came in more than two years late and about $2 billion over budget. With the exception of a two-aircraft order from Air Tanzania in December, Bombardier hasn’t booked a major sale of C Series jets since the Delta deal in April 2016.
Bombardier Belfast is responsible for the design, manufacture and assembly of the advanced composite wings for the C Series aircraft. The wings’ production line is vitally important for Bombardier’s Northern Ireland operations, which have suffered a series of major redundancies as part of Bombardier’s global restructuring programme.
The Canadian group has axed around 20 per cent of its workforce – 1,080 jobs – in the North in recent years.
Jimmy Kelly, Unite regional secretary, said his union was acutely disappointed by the decision taken by the US Department of Commerce which, he said, was "without merit" and which will "cast a shadow over Bombardier's future".
“The decision in favour of Boeing’s allegations of anti-competitive pricing poses a direct and very serious threat to the 4,500 Bombardier jobs in Belfast and many more dependent on them across our service sector and in the wider supply chain.
‘Serious damage’
“This would cause serious damage to our economy and to our society, which needs a robust economy to underpin our society’s continued political progress and the path to reconciliation,” Mr Kelly said.
Quebec’s top finance official accused Boeing of using its trade complaint against Bombardier to try to crush competition from Canada’s biggest aerospace company.
"Boeing is behaving in a predatory way," Quebec finance minister Carlos Leitao said Tuesday at conference in New York. "Boeing is clearly trying to drive Bombardier out of business. That's not fair."
Quebec invested $1 billion for a 49.5 per cent stake in the C Series programme last year.
Bombardier’s Belfast workforce now faces an anxious wait to hear how the Canadian group will react to what is a preliminary report from the Department of Commerce on its investigation into allegations by Boeing that the Canadian aerospace giant had engaged in anti-competitive behaviour in the US.
The commerce department’s investigation has been running since May when it formally launched “an antidumping duty and countervailing duty investigation of imports of 100- to 150-seat large civil aircraft from Canada”.
Bombardier had strongly disagreed with the assertions made by Boeing in its petition to the department regarding the alleged threat caused by exports of the C Series family of aircraft to the US.
At the time, the US department warned that it would “impose duties on those imports in the amount of the dumping and/or unfair subsidisation found to exist”.
British prime minister Theresa May had also raised the issue specifically with both US president Donald Trump and with Canadian prime minister Justin Trudeau.
Key role
The impact of any “duties” imposed on Bombardier’s balance sheet and on its future ability to sell its C Series aircraft to US airlines could play a key role in any decision it makes regarding future prospects for its Northern Ireland operations.
Bombardier had previously warned that Boeing’s claims threatened thousands of aerospace jobs around the world and it had specifically underlined that the C Series programme was “critical to the long-term future of our Northern Ireland operations”.
The Canadian group is one of the North’s largest private sector employers. It also supports an extensive supplier network in the North – in particular, 15 engineering firms that play a key role in the C Series aircraft programme.
Any decision which could see the removal of any part of the C Series work that is currently located in Northern Ireland could have a devastating impact on these supplier firms.
The decision is a second blow for the engineering giant after reports this week that French rival Alstom is on the verge of announcing a multibillion euro rail merger with Siemens. Bombardier had been in extensive talks with Siemens on the project earlier this year.
– (Additional reporting Bloomberg)
