The global reach and impact of Boeing’s campaign against Bombardier

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It would seem that the spat Boeing set off by claiming it’s 737 MAX is threatened and even damaged by the Bombardier C Series has set off several waves across the globe.  This is an excellent example of just how global commercial aerospace has become.

USA
Within the US, thousands of jobs depend on the C Series program.  Not as many as on the 737 MAX program, but if you were going to lose your job you’d be worried and rightly so.   Of course, if you live in Alabama you are thrilled that Bombardier will invest $300m in adding a new final assembly line next to the Airbus factory.

Elsewhere in the supply chain, the Commerce Department ruling will continue to cause waves and nobody knows quite how the impact (read economic damage) will play out.  Boeing’s anti-dumping claim has set off a series of outcomes that it has no control over.  One of these outcomes has to be Delta Air Lines, which is in the midst of a single aisle fleet refresh decision. Bets are that Boeing will lose this deal and, may be, frozen out at the airline for a long time.  Delta is one of the world’s largest airlines and is financially the strongest in the US.  This is not the customer you want to annoy and lose over the relatively small C Series deal. But that’s the reality for Boeing today.

Belfast
At the Shorts plant that makes the wings for the C Series, there is a reasonable sense of panic.  It is clear the politicians in Belfast were not paying enough attention. They are still not doing this.  Given the downstream political and economic impact of the current tariffs being enforced, who knows what could happen?  The careful balance needed to keep previously warring parties apart could break down if an economic downturn occurs.

EU
If the UK continues down the path of Brexit, there is the possibility that Airbus’ wing plant in Wales will exist outside the EU.  This brings in another global impact from China.  However, there is good news from this because if Airbus does wind down any business with Wales, there is interest in the Shorts plant’s capabilities.  Some good news for Belfast at least.  No role here is linked to Boeing, but we can see how the industry’s players need to shift to accommodate political changes.

UK
Belfast is part of the UK.  The UK Prime Minister needs Belfast support in Parliament to keep her job.  Mrs. May wants that job and is unlikely to allow Boeing and the US Commerce Department to threaten it. Mrs. May has enough trouble with Brexit.  Mrs. May has told President Trump about her concerns, and the President has not responded publicly (as unusual as that is). The UK Parliament is now fully engaged in this matter.

Canada
The initial reaction was dismay at the Commerce Department’s decision.  Unlike the Irish, the Canadians were paying attention.  The government immediately started to cut ties with Boeing and there were several deals in the hopper.  Canada was not always happy to back Bombardier, as we have seen with the reluctance in Ottawa to fund the companies programs.  But Boeing achieved something Bombardier management struggled to accomplish – immediate across-the-board Canadian support for Bombardier.  And with this support, any Boeing related Canadian business went into a deep freeze.  Losing billions in defense-related deals is surely not what Boeing expected from Canada.  This is a real, rather than imagined loss, since Boeing no longer manufactures 100-seat aircraft that Delta wanted to buy, and would never have gained that business, which would otherwise have gone to Embraer. Boeing has a tough job proving that they had something for Delta.

China
One of the reasons, remaining unstated, that Boeing sought to destroy Bombardier was the fear that Bombardier would be acquired by the Chinese, who could utilize the excellent C Series design to build advanced aircraft in China.

But Boeing miscalculated that Airbus, which reviewed and rejected the C Series program in the past, would remain uninterested.  Airbus became interested, as they also didn’t want to see Bombardier’s technology jump-start a new competitor in China with a newer technology aircraft than their own current offerings.  The intent to keep Bombardier technology from China was successful but may have occurred in a different way than anticipated.

The Bottom Line
These initial impacts will evolve as this case moves forward, and we expect additional ramifications as time goes on.

© 2017, Addison Schonland. All rights reserved.

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11 comments on “The global reach and impact of Boeing’s campaign against Bombardier
  1. Capitaine Scarlet says:

    The perversity exists in the conduct of a management. What is the evil? In a few words, it means: it makes me feel good to hurt you. That’s my main reason! The rest is secondary. The case Boeing will be a case of business school. Currently, the American aircraft manufacturer is caught with a cascade of unintentional reactions. And the European Commission is right to get involved and raise the flag on the grossness of the methodology used by the Department of Commerce to collect and reconcile data that are more of the bad copy of a university student that will fail his methodology course of research. The political support Boeing expects is transforming this theater of clandestine operations into a monumental farce. The best way for Boeing to do good crisis management and minimize damage is to remove his unfortunate complaint, and to fend off the clowns responsible for this mess.

  2. CBL says:

    The impact for Defense procurement may not be limited to Boeing in the USA. I would not be surprised to hear the the F35 offering is losing traction at DND and that an Eurofighter proposal may become politically correct in Canada…:)

  3. w mckimm says:

    Shorts Belfast also falls within the uk/

  4. As for the UK’s reaction to the Boeing move, it might be pure coincidence – but it might not – that British Airways operates 44 A319s and its BA CityFlyer regional subsidiary operates 20 Embraer E-Jets, all of which will require replacement at some point. Together, those fleets would be pretty close in fleet size and aircraft seat complements to the 61 C Series aircraft that reports suggest a large but so far unidentified European carrier has agreed to order from the CSALP partnership.

  5. Kevin Kitura says:

    No one in Canada wants the Eurofighter, the RCAF wants the F-35A.

  6. Mario Heinen says:

    What a disjointed article. And all that to say the final impact is unknown.

  7. DJ says:

    We do ??… rather test out a Saab Gripen or a Dassault Rafale than throw all my cards at an over-priced/costly to maintain per hour aircraft like the F-35.

  8. Mac Berry says:

    The decision to purchase a replacement aircraft for the RCAF will not be made until NAFTA is settled. If this deal is scrapped then Boeing will loose the F35 order. I would welcome the purchase from Europe.

  9. clbea says:

    I guess Kevin you are only a few who still want the F-35 in Canada!

  10. clbea says:

    Another positive article favouring C Series: ”Here Are Six Reasons Why The C-Series Could Be The Next Big Thing In Commercial Aviation”

    The C-Series Is Sleek, Efficient, Comfortable, And Has The Range To Connect Second Tier Cities Directly.
    Look at Avgeekery

  11. Tim says:

    It’s pretty cool that you speak for the entire poulation of a country. Please provide authentication to your statement.

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