Yahoo Finance Fears for thousands of British jobs as US court prepares to rule on Bombardier subsidy row
A court decision in America that could threaten thousands of British jobs is expected as early as today.
The US trade court is due to give its initial ruling on a claim by aerospace giant Boeing that Canadian rival Bombardier sold its C-Series airliners at knock-down prices – a practice known as “trade dumping”.
Boeing is arguing that the only reason Bombardier was able to agree to sell up to 125 of the aircraft to US carrier Delta at bargain rates was that the company received state subsidies.
The wings for Bombardier’s C-Series airliners are built in Belfast, where the company is the region’s biggest private employer with almost 5,000 staff. Bombardier has said the aircraft’s success is “critical” to the future of its Northern Ireland operations.
Unions say about 25pc of Bombardier’s staff in Belfast are employed working on C-Series production but this is expected to rise to about 60pc in four years’ time.
Boeing claims that government support for Bombardier – which included about £75m from the UK to help the C-Series and $1bn (£0.74bn) of financial aid from the Quebec government – was illegal.
The US company alleged Bombardier agreed to sell the C-Series jets for about $20m each to Delta but claimed the planes cost about $33m to produce, and it was the state subsidies that allowed it to offer them at what Boeing called “absurdly low” prices.
Boeing has taken its fight to the US International Trade Commission in the hope of sanctions that could block the sale, casting doubts over the future of the C-Series programme and putting thousands of jobs in the UK at risk.
In a statement, Boeing said: “This is a classic case of dumping, and it was made possible by a major injection of public funds. This violation of global trade law is the only issue at stake at the US International Trade Commission – one sale in the US at a price millions lower than Bombardier is charging in the Canadian market.”
Brazilian company Embraer – which produces aircraft of a similar size to Bombardier – has launched a similar case against the Canadian company at the World Trade Organisation.
Commentators have pointed out that Boeing does not build a plane that the C-Series competes with, meaning that it did not lose out on sales because of the Delta deal. Instead, Boeing is seen as trying to stop Bombardier from becoming a direct competitor in the future, one that has been able to grow because of state subsidies. It fears that Bombardier could build a full range of airliners that compete with Boeing products, as Airbus does now.
Airbus and Boeing now have a 50:50 market share producing large airliners, and the US company is determined not to see the past repeat itself, further eroding its customer base. Both Airbus and Boeing are locked in a huge legal battle at the WTO over state subsidies, each claiming that the other received illegal backing.
A spokesman for Bombardier said: “We will not speculate on the impact on our Belfast site should the Boeing petition be successful. However, the C-Series programme is critical to the long-term future of our Northern Ireland operations.”
