Boeing spooked by Canada's threat to F/A-18 deal, seeks talks

Cornelia Mascio
Mag 19, 2017

The Caisse de dépôt et placement du Québec is defending itself against what it calls "baseless allegations" by the Boeing Co.as the U.S. Department of Commerce investigates the pension fund's investments in Bombardier Inc.

Boeing argued at a hearing in Washington on Thursday that duties should be imposed on Bombardier's new larger CSeries passenger aircraft, insisting it receives Canadian government subsidies that give it an advantage internationally. U.S. Trade Representative Robert Lighthizer sent Congress the White House's formal notice on Thursday morning to begin negotiations with Canada and Mexico for a new trade deal.

Freeland said Boeing's petition is "clearly aimed at blocking Bombardier's new aircraft, the CSeries aircraft, from entering the US market".

The Pentagon is paying about $70 million each for F/A-18 Super Hornets.

"Canada is reviewing current military procurement that relates to Boeing", Freeland said in a statement.

In an emailed statement Boeing also pointed out that it places substantial amounts of commercial and defence work in Canada and has a supply chain that "leverages the breadth and depth of the Canadian aerospace industry".

"Boeing admits it does not compete with exports of the CS100 aircraft, so it is all the more hard to see these allegations as legitimate, particularly with the dominance of the Boeing 737 family in the US market", according to Freeland's statement.

Boeing offered no evidence to support the notion that this facility was not concluded on commercial terms or that it conferred a subsidy to Bombardier.

Bombardier has dismissed the allegations. "Boeing doesn't even make a product that competes with the aircraft Bombardier offered in the sales campaigns that Boeing complains about", lawyer Peter Lichtenbaum told the trade commission.

Lawyers for the USA aerospace giant argued Thursday that Bombardier's own words prove it was rescued financially by multibillion-dollar assistance from the Quebec government, which past year invested US$1 billion in exchange for a 49.5 per cent stake in the CSeries.

Bombardier has made it clear that its true goal is to grab half the global market share for 100-to-150-seat aircraft, according to Boeing, which argues its rival has received an unfair head start from Canadian taxpayers. But the Commerce Department cited an April 2016 statement announcing the pending sale of Bombardier aircraft to a Delta Air Lines in an order valued at US$5.6 billion.

Historically, Bombardier has been a bigger player in the smaller jet market, well below the capacity of Boeing's pancontinential 7-series planes.

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