Bombardier accuses Boeing of trying to 'stifle competition' after new tariff
Bombardier Inc
$2.52
11:00 27/10/20
An interim tariff of 220% has been imposed on the import of Bombardier's C-Series jets to the US after its competitor Boeing lodged a complaint that alleged the Canadian firm was receiving unfair state subsidies from the UK and Canada in order to win a major contract.
As a result of the US Department of Commerce's decision to institute the hefty tariff, one which tripled the cost of a C-Series aircraft in the US, the jobs of thousands of Bombardier employees in the UK could be at risk.
Bombardier called the ruling "absurd," saying that Boeing was attempting to use US trade laws as part of an effort to "stifle competition," because it had made a "superior aircraft" that was more efficient and comfortable than its own offerings.
Both Downing Street and several trade unions feared that the decision could lead to the cessation of Bombardier's Northern Ireland operations, where it employs 4,100 people across four locations.
PLANES
"Boeing's position, in this case, is unjustified and frankly not what we would expect of a long-term partner to the UK - as well as damaging the wider global aerospace industry," a spokesperson from the Department of Business, Energy and Industrial Strategy said.
The ruling was also said to potentially jeopardise a £4.15bn deal between Bombardier and US airline Delta that would see the former supply the latter with 125 new jets.
The firm said the decision was "divorced from the reality about the financing of multibillion-dollar aircraft programmes."
Prime Minister Theresa May said, "I am bitterly disappointed by the initial Bombardier ruling. The government will continue to work with the company to protect vital jobs for Northern Ireland."
The Department of Commerce was set to make a second ruling on the tariff in Washington on 5 October, and the US International Trade Commission announced it would be convening in February 2018 to rule on whether it would uphold or remove the penalty.
TRAINS
Reports began to circulate on Tuesday that French firm Alstom and the Europe's largest manufacturing company Siemens were finalising plans to merge, creating what Siemens president Jo Kaeser called "a new European champion in the rail industry."
According to Reuters, Siemens, which manufactures the inter-city ICE trains that run on German long-distance routes, had previously been in discussions to tie-up with Bombardier in a multibillion-dollar rail merger.
In a joint statement, both Alstom and Siemens said their businesses were "largely complementary" and the merger would see customers benefit from a "larger geographic footprint."
The announcement came just days after Angela Merkel and French President Emmanuel Macron's plans to move towards a closer integration between the two nations was dealt a blow after the Chancellor's less than favourable showing at Sunday's election left her somewhat isolated.
Bombardier's euro-denominated bonds, set to mature in 2021, had dropped seven points as of 1000 BST, more than at any other time in the preceding two years, to 99.963 according to Bloomberg.
As of 1005 BST, shares in Bombardier were on the up, moving 6.07% to CAD 2.27 each.