Asks U.S. Department Of Commerce To Investigate

Boeing is alleging that Bombardier is offering unfair subsidies and pricing on its CSeries airliners, and has asked the U.S. Department of Commerce to investigate.

In a petition, Boeing says that Bombardier offered "absurdly low" prices on the CSeries aircraft to wind a key order from Delta Airlines. The deal priced the aircraft at $19.6 million each, rather than the stated production cost of $33.2 million, according to a report from Reuters.

Boeing's 737-700 model, which is a direct competitor, is prices at $83.4 million. The new 737 MAX-7 will come in at about $92.2 million. Sales discounts of 40 to 50 percent are not uncommon in the industry, however.

Bombardier won the order from Delta for 75 CS100 jets in April of last year. In its complaint, Boeing asserts that the CSeries program has benefitted from hundreds of millions of dollars in government subsidies from Quebec, the Canadian federal government and Britain. 

The Government of Canada responded with a prepared released to the media:

"The Government of Canada objects to the allegations made by Boeing. We are confident that our programs are consistent with Canada's international obligations.       

"The aerospace industries of Canada and the United States are highly integrated and companies on both sides of the border benefit from this close partnership. For example, many C Series suppliers are based in the United States and it is projected that more than 50 percent of the components for the C Series, including the engine, will be supplied by American firms directly contributing to high quality jobs in that country. The C Series is a great example of how the North American industrial base can develop and produce a globally competitive product with industry-leading clean technologies.

Bombardier also has a significant presence in the U.S. across its aerospace and transportation divisions, directly employing more than 7,000 workers. In addition, the company works with more than 2,000 suppliers headquartered in states across the country thereby generating thousands of well-paid, high-tech American jobs.

"The Government of Canada will mount a vigorous defence against these allegations and stand up for aerospace jobs on both sides of the border."

(Image from file)

FMI: www.bombardier.com, www.boeing.com, www.ic.gc.ca/eic/site/icgc.nsf/eng/home