Belfast Telegraph

Bombardier ruling: Boeing actions could jeopardise its UK defence contracts - Fallon

By Brett Campbell and Jonathan Bell

Defence Secretary Sir Michael Fallon has said Boeing's actions in taking a complaint against Bombardier, could jeopardise its future defence contracts.

Mr Fallon was in Belfast to unveil a new warship is to be named after the city.

The UK government has contracts with the American aerospace firm in the hundreds of millions of pounds.

"Boeing was the big winner in the last defence review," Sir Michael said, "this is not the behaviour we expect from a long term partner."

The firm has deals in place for maritime patrol aircraft and apache helicopters worth over £400million.

Sir Michael added: "Boeing stands to gain a lot more from British defence projects. Taking action like this is likely to jeopardise our future relationship."

The minister said his government would re-double efforts with its Canadian counterparts to help bring about a settlement to the bitter dispute.

"Boeing wants a long term partnership and so does the UK government," Sir Michael added.

"But that has to work both ways."

It comes after the American government announced a 220% tariff on Bombardier in a preliminary ruling over the dispute with Boeing. It has argued the company has been able to sell aircraft in the US at less than cost price because of government subsidies.

Bombardier is supplying 125 of its new C-Series aircraft to Atlanta-based Delta Airlines ( Nick Potts/PA)
Bombardier is supplying 125 of its new C-Series aircraft to Atlanta-based Delta Airlines ( Nick Potts/PA)
Worried: Gavin Robinson

Theresa May has twice lobbied US President Donald Trump on the matter and met with Canadian Prime Minister Justin Trudeau ahead of the ruling.

Number 10 said the Prime Minister was "bitterly disappointed" over the ruling. However, unions accused the Tory leader of being asleep at the wheel and not fighting hard enough for the jobs.

Secretary of State James Brokenshire said the decision was "very disappointing".

"Boeing’s position in this case is unjustified and not what would be expected of a long-term partner to the UK.

"As the Prime Minister has made clear, we will continue to defend UK interests and work with Bombardier to protect vital jobs and livelihoods among the 4,200 skilled workers and their families in Belfast and across Northern Ireland.

"We will also continue to work closely with the Canadian government to encourage all parties to reach a credible resolution as quickly as possible."

'Restore government'

The CBI in Northern Ireland has called for the restoration of the Northern Ireland government in order to protect those jobs under threat by the Bombardier ruling in the US.

It represents thousands of businesses and said the ruling would have an impact across Northern Ireland and put economic growth at risk.

“This just reinforces the need for the swift return of an inclusive devolved government," said CBI NI director Angela McGowan.

"Government and business must work in partnership to deliver a new far-reaching industrial strategy to improve regional resilience, economic competitiveness and facilitate growth.

“With jobs and future prosperity in the region being put at risk by decisions made far away from Belfast, we need a devolved government that can speak up for and champion the needs of the local workers and businesses most affected.” 

The ruling was made in a finding released in the early hours of Wednesday morning. A second ruling will be held in October and needs to be ratified at a hearing scheduled for February next year.

Bombardier has said the C-Series jet is "critical to our future in Belfast". 

It described the ruling as "absurd and divorced from the reality about the financing of multibillion-dollar aircraft programs".

The DUP has said it will "do everything we can" to keep the Belfast plant open, with Arlene Foster saying it was not the end of the process. Sinn Fein said the livelihoods of Bombardier workers must be prioritised with Michelle O'Neill saying she would continue to lobby key players in the matter.

The trade dispute came after rival Boeing claimed the Canadian company received unfair state subsidies from both its government and the UK, allowing the sale of airliners at below cost prices in the US. Bombardier is due to begin delivering a blockbuster order for up to 125 new jets to Atlanta-based Delta Airlines next year.

Delivering the ruling US Department of Commerce, secretary of commerce Wilbur Ross said: "The US values its relationships with Canada, but even our closest allies must play by the rules.

"The subsidisation of goods by foreign governments is something that the Trump Administration takes very seriously, and we will continue to evaluate and verify the accuracy of this preliminary determination."

In a statement, Bombardier said it strongly disagreed with the preliminary decision.

"The magnitude of the proposed duty is absurd and divorced from the reality about the financing of multibillion-dollar aircraft programs," it said.

"This result underscores what we have been saying for months: the US trade laws were never intended to be used in this manner, and Boeing is seeking to use a skewed process to stifle competition and prevent US airlines and their passengers from benefiting from the C Series."

The firm added: "The US government should reject Boeing's attempt to unfairly tilt the playing field in its favour and to impose an indirect tax on the flying public through unjustified import tariffs."

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