MONTREAL _ Even as scores of Bombardier workers in Toronto rallied in support of the company’s battle with Boeing, the Montreal transportation company said it’s looking beyond next week’s U.S. Department of Commerce decision about preliminary duties against its CSeries aircraft.
Boeing has accused the Montreal-based aerospace firm (TSX:BBD.B) of selling its CSeries passenger jets to American-based Delta at an unfairly low price with help from government subsidies, but Bombardier spokesman Bryan Tucker said the United States still has to rule on the critical question of whether Boeing suffered any harm.
“Boeing acknowledges it did not compete in the Delta competition, and it abandoned this aircraft segment more than a decade ago, so it’s really hard to see how they are harmed,” he wrote in an email.
The U.S. Commerce Department confirmed Wednesday that its decision on Boeing’s request for preliminary countervailing duties will be announced Tuesday, a day later than it previously indicated.
A preliminary anti-dumping determination is currently scheduled to be announced Oct. 5, but can be extended. The department will make final determinations on duties before the U.S. International Trade Commission (ITC) issues its final injury determination.
Tucker said that the outcome from the preliminary findings are hard to predict because U.S. trade laws weren’t designed to address large, complex and highly engineered products such as aircraft.
“At the end of the process, and given that the CSeries will contribute billions of dollars to the U.S. economy and lower travel costs for the American public, we’re confident the ITC will reach the right conclusion.”
Bombardier received a show of support Wednesday morning as workers at its north Toronto plant left their posts. Many said the action came with company’s blessing, noting that CEO Alain Bellemare stood on the sidelines of the rally.
“I think they’re behind it, because I think they see what’s going on and they know the more weight, the more voices we have behind it, the more chance we have to put Boeing back in its place,” said Hugh Lynar, who has worked at the company 22 years.
Cheers erupted through the crowd as Unifor president Jerry Dias vowed to stand up to U.S. protectionism and fight for Canadian aerospace jobs.
Industry analysts expect preliminary countervailing duties will be unveiled, although they wouldn’t begin to be collected until the first Delta Air Lines planes are delivered next year.
Boeing has asked the U.S. government to impose preliminary countervailing duties of 79.41 per cent, followed later by anti-dumping duties of 79.82 per cent.
Analyst Seth Seifman of J.P. Morgan said he assumes some duties will be announced next week but a ruling on whether they will take effect isn’t expected until early 2018.
The Canadian government is putting pressure on Boeing to drop its complaint, threatening to cancel plans to buy 18 Boeing Super Hornet fighter jets.
Prime Minister Justin Trudeau has received support from his British counterpart, Theresa May, who wants to protect jobs in Northern Ireland, where the plane’s wings are assembled.
Seifman said Boeing was emphatic during an investor conference on Monday that it won’t back down despite the prospect of losing business with Canada and CSeries customer Delta.
Even though Boeing doesn’t have a direct competitor to the CS100, the company views the CSeries family as a competitor to its 737.
“Management has concluded that a subsidized Airbus was one reason why McDonnell Douglas’s commercial aircraft businesses died and it is determined to foreclose the possibility of a repeat with Bombardier,” Seifman wrote in a report.
Conservative Innovation, Science and Economic Development critic Maxime Bernier said Bombardier is facing a challenge from Boeing because the government subsidizes big corporations.
“My solution and our solution would be to stop giving subsidies to businesses and lower taxes to every single entrepreneur,” he said.
But department Minister Navdeep Bains noted that the former Conservative government gave Bombardier $350 million.
Bains said the Liberal government investment is designed to support thousands of quality jobs in the critical aerospace sector.
“The aerospace sector has a long-standing tradition and history around the world working with different governments,” he said.
“Boeing works with the U.S. government, Airbus works with its respective government and the same with Bombardier.”
_ With files from Paola Loriggio in Toronto