Bombardier and Boeing’s trade dispute, explained with toy planes

Late September, the U.S. Department of
Commerce hit Bombardier, Canada’s major aircraft maker, with a nearly 220 per cent tariff on its new line of planes. Which was later hiked another 80 per cent. The amount—totally absurd. But the hit? It’s just another in a long line of
disputes over how the aircraft manufacturing industry handles
government funding. This totally exorbitant tax came about because of Boeing, a U.S. manufacturer. Boeing filed a complaint over Bombardier’s new line of CSeries jets. The Montreal-based company has a deal to sell up to 125 of these jets to Delta Air Lines
—again a U.S. company. Boeing is basically pointing
fingers and claiming that Bombardier sold the planes well below market value. Something it was able to do thanks to —what Boeing—is calling unfair subsidies
from Canadian governments. And the U.S. Department of Commerce agreed hence the hefty tax. Although Bombardier is Canada’s major
aerospace manufacturer Boeing earns eight times as much on aircraft sales. In the grand
scheme of things, Bombardier is no match. So, why pick on the little guy? Realistically, the CSeries jets are good. They’re spacious, fuel-efficient environmentally friendly and they’ve got Boeing scared. Boeing’s already had to reluctantly share the U.S. market with Europe’s Airbus and they do not want to give up another piece of it. But, of course, a company can’t just…say that. Government subsidies have been put at
the centre of this whole spat so, let’s break those down. Now, on the one hand, you could look at Boeing as the pot, to our kettle in this situation. Every major aircraft manufacturer receives some form of government support—including Boeing. This support could be through a lot of avenues: military contracts, grants interest-free loans. According to Good Jobs First, Boeing has received about 14.4 billion U.S. dollars in subsidies to date. Not to mention, 73.7 billion U.S. dollars in government-assisted loans. In dollar amounts, Bombardier’s support is a fraction of what Boeing rakes in. What Boeing is taking issue with are the kinds of subsidies Bombardier has. In 2016, the Quebec government gave Bombardier one billion dollars U.S. to support the creation of its floundering CSeries program. But the province didn’t just give it funding like it would give a subsidy. Quebec made a partnership with Bombardier. In exchange, the province took an almost
50 per cent stake in the CSeries. On the one hand, it makes sense that Quebec wants to support one of its
province’s biggest industries. But analysts point out that a government
involving itself in commercial business is pretty murky water. Not to mention, it’s a sly move for Bombardier, since that support at such an early stage for
that program eliminates a lot of risk. That’s the issue Boeing in the U.S. have. But to be honest, some Canadians aren’t thrilled with Bombardier’s constant
government bailouts either. There have been plenty of opinion pieces
and grumblings about it. Even satire suggesting Sears consider a name change. Since 1966, Bombardier has received five billion dollars from the
federal and Quebec governments. Yet despite the taxpayer funding, Bombardier has
still carried out massive layoffs, seen projects delayed and given
executives cushy bonuses, which the company only cut back
after a public backlash. You can see why folks would be torn on the government pumping so much cash into the company. If anything, decades of feuding over aerospace subsidies should be an indicator that taxpayer money and airplanes are a toxic mix.

36 Replies to “Bombardier and Boeing’s trade dispute, explained with toy planes”

  1. Boeing complaining and they don't have the planes Delta wants, Boeing told Delta to buy Embraer 2nd hand E-190s, which off course Delta didn't want, first hand planes or second hand, XD

  2. Hate BOEING….they just wee simply creating trouble to a much smaller company which is 1/100th of its size…I wish boeing loose the battle and all the contracts.

  3. Canadians just got fucked on this deal. Our dumb government gives bombardier millions of my tax dollars and now Airbus gets 51 per cent of the c series project for zero dollars! This is a bad deal for Canada! Another liberal fuck up!

  4. good news guys.  Bombarider has partnered up with air bus, who happens to have a manufacturing plant in the United States.  Bombardier can build their planes there and avoid the 300% tariff.

  5. Well, and now Boeing has shot themselves in the foot. We sell 50.01% to Airbus Industries, therefore not subject to U.S. Tariffs. On top of that, we may move to buy Eurofighter Typhoon Fighter Jets instead of the Boeing F-18 E…

  6. Why doesn’t any journalist or critic of the deal take into consideration the money Bombardier brings into Canada? Don’t forget when Bombardier sells say 350 airplanes for say 18 billion dollars, a large part of this money flows right back into the Canadian economy! This benefits the entire Canada and part of this money flows right back into the Government coffers as company taxes and income taxes. Furthermore it employs people, and gives opportunities to students. What is the use of investing in high level education in engineering when there are no engineering jobs? We Canadians should understand the long term benefits of government support when required. This is an investment in our economy, not just for Bombardier, but the entire chain involved, including the government by receiving all taxes involved, again including generated income taxes of the employees.
    Let’s change the negativity into support and pride of our truly Canadian companies!

  7. sounds Bombardier have never received money from the government, yet it is bull shit. how do you call selling product below the production cost?

  8. Probably one of the better ad's I have seen. Honest, straight to the point and informative. It's not like that "How I make Money Online" ad..

    Being a Canadian citizen, I do not support subsidizing Bombardier & the Sears reference was comical. You will find that most people outside of Quebec have the same opinion. However, they do build good planes 😛

  9. I overall support Bombardier but… that government deal is a bit shady even if understandable. The C-Series is a good product.

  10. I'm happy the US & boeing did that. Bombardier is a shit company that relies on taxpayers to bail them out time and time again. Fuck them.

  11. Maybe government should get out of the taxpayers way… it isnt their business to vote on how much money to take from the citizen, and who to give it to.

  12. I love Boeing aircraft, but they are so dependent on the government teat, they'd collapse without orders from the US government; and has lately started even advertising its greatness on television. They play it off like Boeing brings the world together, makes everybody happy, hires minorities and the handicapped, and then, Right At The End, shows a quickie of whatever military product they are currently shoving down taxpayer's throats. 50% of Boeing's business is military, other competitors abandoned the field of commercial aviation altogether (Lockheed Martin for example) and are purely military. Seems these capitalists don't really like to try and compete in the rough and tumble world of true competition……better to just offer something to the military, deliver it late, over cost, and if it doesn't perform as promised, well heck who cares? We'll just sell ya something else.

  13. So what it comes down to is Boeing are a bunch of hypocrites. All airlines and manufacturers are lying thieving scumbags ripping off the taxpayers with assistance from Governments with greasy palms. What's new?

  14. In a nutshell Boeing are spoilt brats. Spoilt rotten for years and conveniently forgets its own subsidies. Rotten eggs.

  15. Francis de Xavier Maurinus
    1 second ago
    C Series is death. CS100 and CS300, was supposed to be followed by CS500, CS700, CS900 for 150, 170 and 190 passengers. The Trade Marks were reserved in Canada. Do you think that Europe will developed this superior product to steal market from the Airbus 320? – and if it does will they do it in Canada? – No more Electrical, Hydraulics, Flight Controls, Flight Science, Engine Performace Engineers, etc. that now will work on Japan or China. Socialism in Canada is making a country of Expensive Milk, Commercial Centers and Ignorance. Who says the end wont be funny.

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