Bombardier dispute puts Boeing's defence contracts at risk, says UK defence sec

UK Defence Secretary Michael Fallon warned aircraft manufacturer Boeing that it "could jeopardise" its British defence contracts as a result of its feud with Bombardier.

Fallon made the comments overnight after the US Department of Commerce proposed imposing a 220% import tax on Bombardier's C-Series jets, tripling the cost of the plane, effectively killing the programme in the US and putting thousands of jobs at risk in the firm's Northern Ireland factories.

Boeing, which won a contract to supply 50 Apache AH-64E helicopters to the British Army in 2016, claimed that its rival Bombardier had received unfair state subsidies from both the UK and Canadian governments.

Prime Minister Theresa May said that Downing Street's long-term partnership with Boeing was at risk because of its behaviour.

May said the preliminary judgement against Bombardier would cause a great deal of uncertainty and that her government, working in conjunction with Arlene Foster of the DUP and Michelle O'Neill of Sinn Féin, would do everything in its power to guarantee security for the 4,100 Bombardier employees across four locations in Northern Ireland.

Bitterly disappointed by initial Bombardier ruling. 1/2

— UK Prime Minister (@Number10gov) September 27, 2017

The Government will continue to work with the company to protect vital jobs for Northern Ireland. 2/2

— UK Prime Minister (@Number10gov) September 27, 2017

She also stated that she had spoken to Donald Trump "more than once" about the issue, having raised it at a recent meeting in New York as part of the United Nations General Assembly, and warned on Thursday at a Bank of England conference in London that "aspects of protectionism" were creeping into different parts of the world and wanted the UK to be a champion of free trade.

While in Belfast, Fallon pointed out that "Boeing stands to gain from British defence spending" but noted, "this kind of behaviour could jeopardise our future relationship."

"We don't want to do that. Boeing is an important investor in the United Kingdom; an important employer in the United Kingdom.

"But we would prefer this kind of dispute to be settled on a negotiated basis and we will be redoubling our efforts with the Canadian government to bring about a negotiated settlement."

A spokesman for Number 10 said that the ruling would damage the global aerospace industry, saying it was "frankly not what we would expect of a long-term partner to the UK."

Canadian Prime Minister Justin Trudeau threatened to cancel a purchase of 18 Super Hornet jet fighters from Boeing in retaliation, and Philippe Couillard, premier of Quebec, where Bombardier is headquartered, said that his state had been "attacked" before going on to say, "Boeing may have won the battle but the war is far from over."

As of 0800 BST, Bombardier shares had taken a 7.49% dive to CAD 2.10 each.

Boeing however, was up 1.58% in pre-market trading to $255.28.