Pontifications: Boeing-Bombardier complaint revisited - Leeham News
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July 31, 2017, © Leeham Co.:
It's been in a quiet period in the trade complaint between Boeing and Bombardier.
The issue moved over to the US Department of Commerce (DOC) after the US International Trade Commission (ITC) concluded there were grounds to continue the probe. Then Boeing moved for a two-month delay, to September. There it sits. But as July moves into August and with the September decision date around the corner, it's time to revisit the issue.
Why is this happening?
Nobody in the know that I know of believes Boeing's claim that Bombardier, if left unpunished, will put Boeing out of business and with it the US aerospace industry.
So why is Boeing doing this?
Boeing may well be standing on principal about government support to Bombardier. But, then, where is the stand on principal when it comes to government support to COMAC and its C919 and to Russia and its Irkut MC-21? Both are building aircraft that are directly competitive to the "heart of the market" Boeing includes in its complaint against Bombardier, and the Chinese and Russian governments are funding these competitors.
The answer, of course, is that China is Boeing's largest customer and Boeing isn't going to do anything to piss off China.
Boeing has a Russian engineering center and buys titanium from there, so a complaint there is unlikely.
Bombardier, meanwhile, is one-sixth the size of Boeing in revenue and its balance sheet is not just weak from its own troubles but can't begin to compare with Boeing's, its cash flow and other strengths. In other words, Bombardier is the proverbial 98-pound weakling and easy to pick on.
Bombardier doesn't even have a competitor in the heart of the market (the CS500), and may or may not in the future, but this is the airplane Boeing seems to fear most.
Boeing claimed in its complaint that the non-existent CS500 will kill the 737-800, but this is silly. The -800 is going away due to the MAX 8. The last -800 is scheduled to be delivered in 2021, according to the Airfinance Journal Fleet Tracker. The "conceptual" CS500 has nothing to do with this.