• Thanks for stopping by. Logging in to a registered account will remove all generic ads. Please reach out with any questions or concerns.

Boeing/Bombardier Discussion

So here is the update from CNN.

http://money.cnn.com/2017/10/16/news/companies/airbus-buys-majority-stake-bombardier-cseries/index.html

Airbus denied that its goal was to circumvent any possible tariffs the U.S. Government may levy on the advanced new jet's importation, but with the Airbus acquisition public and assembly line plans unveiled, the C Series will now be "made in the U.S.A."
 
It makes you wonder why Boeing did not think to go to Bombardier with a bag of money, first.

Now, to stop C-Series sales in the US, they will have to convince someone in Congress/the White House to put a bunch of Trump voters in Alabama out of work.

The mind boggles.
 
SeaKingTacco said:
It makes you wonder why Boeing did not think to go to Bombardier with a bag of money, first.

Now, to stop C-Series sales in the US, they will have to convince someone in Congress/the White House to put a bunch of Trump voters in Alabama out of work.

The mind boggles.

Hubris?
 
AlexanderM said:
A shot across the bow of the good ship America First! I would imagine that JT knew about this prior to his meeting with Trump and perhaps gave the go ahead based on what happened in that meeting. I am of course just speculating. Now if America First messes with the C Series or does not relent the response will come from Canada, the UK and the EU.

Full respect to JT for this.
 
I am not a JT or a Bombardier fan particularly, but I do admire the shear Machivellian nature of this.

Credit where credit is due.
 
Extremely doubtful that JT would have had any foreknowledge. The Federal government has only ever given Bombardier either direct subsidies for specific programs in research and development or for employment development purposes or straight out commercial (even at incredibly low rates) loans. neither of these entitled them to any say or insight into the operation of the corporation. According to reports here in Montreal, there were rumours of these talks for months in the industry insiders world, so the discussions apparently pre-date the Boeing fracas (in fact, if the rumours came to the ears of Boeing, perhaps it explains why they did what they did: get your punches in while you still can, type of thing). However, the Federal civil service has problems collating, analyzing and briefing their political masters on actual facts that have occurred. To keep track and inform them of rumours even industry insiders couldn't confirm is well beyond their capacity.

The Quebec government, on the other hand, was invested into the C-Series for 49% and, as a result here, have been diluted to 19% (16%?), so they would have had to be informed and agree to the operation in advance in view of their dilution. They made, to my mind, the right call. Better 19% of a large pie than 49% of a small one.

If, as reported, the discussions pre-date Boeing's action, then I would agree that avoiding tariff was not Airbus' prime motivation in acquiring a stake in the C-Series. Again, to my mind, a greater motivation would have been to acquire the next level of product, just below the sizes made by Airbus, to have a more complete offering, while in the long term keeping any attempt (by Bombardier) to go into their actual size market. Building in the US (which Airbus already does because they know that it is always easier to sell to the Americans if you can claim that you make it there) and as result avoiding the import tariff is just a bonus resulting from the recent actions of Boeing.

Moreover, I don't think this will be a problem for Trump: He'll simply claim that making the plane in Alabama instead of Canada just proves that he cares for American work and that only when you build in America can you really be competitive on price, as American workers are just the best and most efficient in the world; then he will claim that if his administration had not imposed tariff on "cheating" Canadians, the work would not have come to the US, where it belong by birthright - and claim another win (you'll be sick of winning!).

 
The market has voted: Bombardier's stock is up 20% this morning.  Up 250% from its low in Feb 2016.
 
Oldgateboatdriver said:
.....

Moreover, I don't think this will be a problem for Trump: He'll simply claim that making the plane in Alabama instead of Canada just proves that he cares for American work and that only when you build in America can you really be competitive on price, as American workers are just the best and most efficient in the world; then he will claim that if his administration had not imposed tariff on "cheating" Canadians, the work would not have come to the US, where it belong by birthright - and claim another win (you'll be sick of winning!).

:cheers:

And in a "right to work" state.....
 
Oldgateboatdriver said:
Extremely doubtful that JT would have had any foreknowledge.

Extremely doubtful he wouldn't have got blamed if it all went sour.
 
Just announced on Global News BC that Canada and Mexico will jointly reject US NAFTA demands later today in joint press release.
 
dapaterson said:
The market has voted: Bombardier's stock is up 20% this morning.  Up 250% from its low in Feb 2016.

Finally, some benefit for me doggedly holding onto those few shares I bought almost a decade ago  >:D
 
Oldgateboatdriver said:
Extremely doubtful that JT would have had any foreknowledge. The Federal government has only ever given Bombardier either direct subsidies for specific programs in research and development or for employment development purposes or straight out commercial (even at incredibly low rates) loans. neither of these entitled them to any say or insight into the operation of the corporation. According to reports here in Montreal, there were rumours of these talks for months in the industry insiders world, so the discussions apparently pre-date the Boeing fracas (in fact, if the rumours came to the ears of Boeing, perhaps it explains why they did what they did: get your punches in while you still can, type of thing). However, the Federal civil service has problems collating, analyzing and briefing their political masters on actual facts that have occurred. To keep track and inform them of rumours even industry insiders couldn't confirm is well beyond their capacity.

The Quebec government, on the other hand, was invested into the C-Series for 49% and, as a result here, have been diluted to 19% (16%?), so they would have had to be informed and agree to the operation in advance in view of their dilution. They made, to my mind, the right call. Better 19% of a large pie than 49% of a small one.

If, as reported, the discussions pre-date Boeing's action, then I would agree that avoiding tariff was not Airbus' prime motivation in acquiring a stake in the C-Series. Again, to my mind, a greater motivation would have been to acquire the next level of product, just below the sizes made by Airbus, to have a more complete offering, while in the long term keeping any attempt (by Bombardier) to go into their actual size market. Building in the US (which Airbus already does because they know that it is always easier to sell to the Americans if you can claim that you make it there) and as result avoiding the import tariff is just a bonus resulting from the recent actions of Boeing.

Moreover, I don't think this will be a problem for Trump: He'll simply claim that making the plane in Alabama instead of Canada just proves that he cares for American work and that only when you build in America can you really be competitive on price, as American workers are just the best and most efficient in the world; then he will claim that if his administration had not imposed tariff on "cheating" Canadians, the work would not have come to the US, where it belong by birthright - and claim another win (you'll be sick of winning!).
This is one of the cases where things accidentally fall into place, but Bombardier and JT come up roses, Trump can claim a victory, and Boeing gets egg on its face.
 
Some might be inclined to say that Adam Smith is vindicated, accidentally.
 
Altair said:
This is one of the cases where things accidentally fall into place, but Bombardier and JT come up roses, Trump can claim a victory, and Boeing gets egg on its face.

I don't think JT is going to come up roses.  The opposition is going to go all out on this to paint the loss of Canadian manufacturing and Canadian ingenuity to a US corporate giant... again... because of his incompetence.  What it does do is screws Boeing over big time, gives Bombardier and big ally in their fight with Brazil and access to much larger corporate pockets to sell the plane pretty much anywhere.  This plane is revolutionary in many ways and will take over the industry in about 15 years.

OGBD's post earlier hit the nail on the head in every way.
 
Underway said:
I don't think JT is going to come up roses.  The opposition is going to go all out on this to paint the loss of Canadian manufacturing and Canadian ingenuity to a US corporate giant... again... because of his incompetence.  What it does do is screws Boeing over big time, gives Bombardier and big ally in their fight with Brazil and access to much larger corporate pockets to sell the plane pretty much anywhere.  This plane is revolutionary in many ways and will take over the industry in about 15 years.

OGBD's post earlier hit the nail on the head in every way.
The main manufacturing line will still be in Quebec even with the planes for the US carriers manufactured in Alabama, or is that incorrect?

Also, how does Canada lose manufacturing and canadian ingenuity to a US corporate giant? Airbus is French.
 
All I can find on NAFTA that matches what I saw on the news this morning.

https://theconservativetreehouse.com/2017/10/17/nafta-update-likely-loggerheads-to-be-announced-at-300pm/

So the update is that they have decided to keep talking. On the news this morning they had this breaking news story with a clip of our Trade Minister looking like, where do we go from here, and the report that we and Mexico were going to tell the US no deal, then they went to commercial and there was nothing more on the story, anywhere. Now the update is they will add an extra session in 2018 and keep talking, but we have told the US, no way to their demands.
 
Altair said:
The main manufacturing line will still be in Quebec even with the planes for the US carriers manufactured in Alabama, or is that incorrect?

Also, how does Canada lose manufacturing and canadian ingenuity to a US corporate giant? Airbus is French.
Yes, I believe it's only the aircraft sold within the US that will be manufactured in the US.
 
And the winner is: AIRBUS.  They get what is a totally new aircraft that fits in well with their current product line, poke a stick in Boeing's eye and will end up owning the C series in about 8 years.  They were looking at losing a lot of European customers who didn't really want an aircraft the size of the A320 but were stuck with it simply because there wasn't anything smaller available without going below 100 passengers.  Now they can order Airbus in all sizes.
 
YZT580 said:
And the winner is: AIRBUS.  They get what is a totally new aircraft that fits in well with their current product line, poke a stick in Boeing's eye and will end up owning the C series in about 8 years.  They were looking at losing a lot of European customers who didn't really want an aircraft the size of the A320 but were stuck with it simply because there wasn't anything smaller available without going below 100 passengers.  Now they can order Airbus in all sizes.
Bombardier will still make more partnered with Airbus than they would have going it alone, especially in the face of US tariffs.

Considering the alternative, they have to be considered winners here as well.
 
Back
Top