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Bombardier: The law of unintended consequence Part 5,000...

So a few weeks ago the American government, at the behest of Boeing Aircraft decided that Bombardier was a worthwhile target, filling a complaint that led to the imposition of 300% tariff on Bombardier  C- Series aircraft.

Now for a start you've got to understand the tariff thing, the initial complaint was drafted by Boeing with a very clear intent -- to kill a non-competitor.  Not entirely clear what their idea was, it maybe that Boeing is thinking of getting in bed with Embraer and getting rid of the Canadian would be a good deal for them...I just don't know. You see Boeing complained that Bombardier was using unfair advantage in the 90 to 150 seat category of aircraft (this is important).  You see the C-Series aircraft is a 125 seat aircraft (trust me its a big big difference) and therefore is not competing with ANY Boeing aircraft product.  The smallest Boeing aircraft (737NG) is 150 seats (and its a pig).

So the complaint will eventually (this is the key here) be thrown out by the authorities (it could take years -- but the damage would be done).  And so a non-competitor would be eliminated (that operates in a segment that Boeing hates!  It inherited the MD-90 a REAL competitor in the C Serie segment and discontinued the type as soon as it could).

So now we have Bombardier that is pissed, we have the UK government that is pissed (they make the wings (I think) in Northern Ireland -- huge job issue in the region, and the Canadian government is pissed too -- just as Trump is trying to strong arm the Mexicans and Canadians to make NAFTA the all American song.

A few days ago, Airbus announced that it was acquiring a majority stake in the C Series from Bombardier (Quebec government 20% and Bombardier 30%), and that the aircraft would be partly build in the US.

The result (Unintended consequence):

  • Boeing's biggest competitor (for no money) just "fuc&ed" Boeing's plan to replace the 737NG
  • The C Serie will be marketed and supported by Airbus in Asia and Africa -- killing the prospect of a Chinese 125 seat aircraft (they will instead focus on the B737 segment...I kid you not)
  • Bombardier was in real trouble -- gave up a chunk of the profit for certainty if increased sales..its got to be a winner
  • Trump & NAFTA are in trouble and have created additional difficulty with the only Prime Minister that actually likes trump (Theresa May the PM of the United Kingdom)
This is a massive massive loss for Boeing and Trump's administration.  The duty will fall of quickly (now that final assembly will be in the USA), the members of congress are certain to push for that -- even if they are GOP members they are after all politicians.  Boeing created an enemy out of Canada -- for while a good chunk of Canada dislikes Bombardier -- the slap in the face is just another proof that the Americans are two faced Basta... [you know the word].

Trump's administration's first 10 months in power have an overwhelming message -- destruction is our only tool, we will use it in all sauces.  Boeing just killed the demand for its products in Canada and the UK (possibly too for Europe -- they can see where these guys are going).  There has not been a single positive note in the American administration since January, every move every comment is either negative or destructive (or both).  Trump the consummate "deal maker" (He he "wrote" a book with that title..its go to be true) is unable to get anything done despite his party controlling Congress -- probably the first President in America's history who controls both chambers and is completely unable to achieve any legislative success.

For the first time, in a very long time, America is not know as open and smart, but mean and bitchy.  




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