Bombardier's Painful Double Whammy

Issue 10-02-17   |   Reviewer:   Duane Helleloid, Ph.D.
Sectors:


Abstract

Canada-based Bombardier has spent billions developing a new airplane that can be configured for 100 to 160 seats, offering direct competition to Boeing and Airbus in selling to the world's airlines. One of the largest orders so far is from Delta, which ordered at least 75 Bombardier planes in April 2016.

U.S.-based Boeing has asked the U.S. government to impose counterveiling and anti-dumping duties on the new Bombardier planes sold into the U.S. market, arguing that Canada and Quebec provided government financing that constitutes unfair competition. Such duties could make it impractical for U.S. airlines to purchase the aircraft and, until the legal tangles are straightened out, could dampen any interest by U.S. airlines in purchasing the Bombardier planes. In a counter move, the Canadian government has indicated that it may stop purchasing Boeing's military aircraft.

Another of Bombardier's business units makes railcars, and there were negotiations to merge this business with that of Germany's Siemens. Instead, Siemens and Frances's Alstom announced a merger, which effectively makes Bombardier a relatively small player in the worldwide rail business.





Forgot your username?

Forgot your password?


Feedback