The U.S. Commerce Department’s decision to attach Bombardier Inc.’s C Series aircraft with a retaliatory tariff of 219.3%, is an obvious abuse of power.
Writing about Bombardier has been a pet project of mine ever since I watched their early innovational business jets fly from the Cartierville airfield, in Montreal, many years ago.
The trials and tribulations of the C Series aircraft have been a source of serious comment (good and bad) since before the first flight in 2013, and I am annoyed that the bad comments have become very political.
The history of self-important U.S. aerospace manufacturing companies contains a number of unfortunate examples where pressure is placed on foreign competition to lose market share. There are many obvious cases (and some shrouded in mystery). For example; The superior Canadian Avro Arrow (with design features from the British Avro 730 and the BAC TSR-2) that was discontinued by P.M. John Diefenbaker following U.S. lobbying. The English Electric Canberra (that gained an altitude record of 70,310 ft.) that was licensed to the U.S. (and is still flying with NASA for high altitude research) with its’ remarkably similar design characteristics to Lockheed’s high altitude U-2 spy aircraft. Was the Concorde a failure because it hit a piece of metal on the runway, causing an explosion, or was it inviable financially due to a U.S. ban on supersonic overflights?. Finally, the enormous success of the Hawker Harrier V/STOL fighter that became the McDonell Douglas AV-8 (now, sharing its’ engine thrust-vectoring technology with the Lockheed/Martin F-35 which will not be 'war-ready' before 2020, according to the US Pentagon).
The innovative design of the C Series aircraft is not obvious when observed from a distance but it is using manufacturing technology, designed from the ground up, that is not comparable to the competition, i.e., Boeing B-737, COMAC C-919, Embraer E170, and Mitsubishi MRJ-90. In detail, the B-737 and C-919 are much bigger, and the MRJ-90 is smaller. The Embraer series of aircraft are competitive in size but are less technologically advanced.
So there you have it.
The U.S. tariff of 219.3% should also be looked at and compared with Boeing’s B-787 ‘Dreamliner’ sales. The B-787 programme is not expected to be profitable until after 1,100 aircraft have been sold. As of April 2015, the production rate is 10 per month; Boeing lost $30 million per aircraft delivered in the first quarter of 2015. JPMorgan Chase has estimated the programme's cash loss to be $45 million per airplane, decreasing as the programme moves forward. The actual cash flow reflects Boeing collecting most of the purchase price upon delivery; Boeing expects deferred costs to total $25 billion (Yes, billion) before the company begins to break even on production. It should also be noted that Boeing is the recipient of massive amounts of government aid; US$14.4 billion in federal and state subsidies and US$73.7 billion in loans over the past 17 years.
Finally, PM Justin Trudeau has stated, referring to the Boeing Super Hornet F-18 replacement, that Canada will not deal with a company that is suing us. In my view, this wonderful statement shows that European companies have remarkably perfect aircraft available. If DND wants more F-18’s, they should talk to Australia. In the meantime, our future should be with a European deal. The Typhoon, Griffin, and Rafale are all capable of the software upgrades that is plaguing the F-35 at the moment (just to mention one problem). Let the Pentagon and Lockheed stew in their own corruption.
Some may say that we should ‘pull the plug’, but what will we produce then, premium wine from Niagara and B.C.? Now, there’s an interesting U.S. tariff story … for some other time.
ReplyDeleteIn other words, how can we have a successful NAFTA policy when we don't even have a successful CAFTA (Canadian ....) policy. Referring to Inter-provincial wine trade.
It’s easy to get angry about the tariff assessed on the CS 100 aircraft but as Bernie has shown it is typical of the way American organization, both corporate and government, treat aliens, as they call anything other the US. The US doesn’t have friends, it has interests. Trump has identified his most important interest, to “Make America “Great” Again”. America was “great” at one time and became not “great” but intends to become “great” again. Who did America lose ‘greatness’ too.
ReplyDeleteMany countries and empires have been “great” through the ages. None ever become “great” again. Maybe America is still “great” and doesn’t need to become “great” again. America has shown symptoms of ‘greatness’ since WW 2 in terms of generosity and leadership in important issues but these have been offset by bad things particularly foreign wars and subversive activities. Mostly, America does good and bad to enhance its wealth and take advantage of other people. All “great” empires did the same thing.
So, a high tariff on the CS 100 is something a “great” nation would naturally do to enhance the wealth of its own corporations. On the same basis NAFTA does not fit the image of a “great” nation. It did until it enhanced the wealth of Mexico so it is time to scrap NAFTA before Mexico becomes “great”.