Airbus-Bombardier deal ‘a positive step forward’ amid US exports tariff row
Bombardier employs more than 4,000 people at its Belfast factories.
Airbus has acquired a majority stake in Bombardier’s C Series aircraft programme, the companies have announced.
The move has been hailed as a “positive step forward” by Business Secretary Greg Clark and comes after the US government proposed a 300% duty on exports of the planes to the country amid an international trade dispute.
Production of the aircraft will be extended to the US state of Alabama, which bosses from European firm Airbus and Canada’s Bombardier believe will mean it avoids import tariffs.
Airbus chief executive Tom Enders said planes built in the US would not be subject to duties under the US investigation.
But US aerospace giant Boeing said in a statement: “This looks like a questionable deal between two heavily state-subsidised competitors to skirt the recent findings of the US government.
“Our position remains that everyone should play by the same rules for free and fair trade to work.”
Statement on Airbus/Bombardier: pic.twitter.com/y8rXIZK1NN— The Boeing Company (@Boeing) October 17, 2017
DUP leader Arlene Foster said it was “significant news” for Bombardier, which employs more than 4,000 people at its Belfast factories and is due to begin delivering a blockbuster order for up to 125 new C Series jets to Atlanta-based Delta Airlines next year.
Airbus obtained a 50.01% stake in the C Series Aircraft Limited Partnership and hopes the deal will improve sales.
Mr Enders said: “Not only will this partnership secure the C Series and its industrial operations in Canada, the UK and China, but we also bring new jobs to the US.”
Bombardier president Alain Bellemare said: “This partnership should more than double the value of the C Series programme and ensures our remarkable game-changing aircraft realises its full potential.”
"This is a win win win situation for everyone: our airline customers, the #CSeries, our industrial operations and Airbus" Tom Enders— Airbus (@Airbus) October 16, 2017
Last month, the US Department of Commerce announced it would impose an interim tariff of nearly 220% on the jets – with unions warning the move could cost jobs in Belfast.
A second preliminary levy of 80% has been loaded on sales of Bombardier aircraft.
Announcing the regulator’s preliminary finding, US secretary of commerce Wilbur Ross said the subsidisation of goods by foreign governments was something that President Donald Trump’s administration “takes very seriously”.
Bombardier labelled the determination “absurd”, while in its response the UK Government said the statement was “disappointing” and pledged to defend British interests “at the very highest levels”.
The magnitude of the proposed duty is absurd and divorced from reality. https://t.co/yVJvnmAw1J?— Bombardier Inc. (@Bombardier) September 26, 2017
Speaking about the Airbus-Bombardier deal, Mr Clark said: “Since Boeing initiated action against Bombardier, we have been active alongside our Canadian counterparts to work to secure the future of the C Series and safeguard jobs and manufacturing at Bombardier Shorts in Belfast, and the supply chain across the UK.
“We will continue to work closely with the companies to protect UK interests and with the Canadian government to ensure the unjustified case brought by Boeing is brought to a swift resolution.
“There is some way to go before the deal is completed and our number one priority throughout will be the workforce in Northern Ireland.”
Davy Thompson, regional officer of the Unite union, welcomed the news.
He said: “Unite will continue our efforts to ensure the withdrawal of the US tariffs on the C Series but this is a welcome development – one that gives breathing space to the C Series itself and which we anticipate should safeguard the future of C Series production jobs in Belfast for the foreseeable future.”
Ross Murdoch, GMB national officer, said: “This sounds like potentially good news for our members in Belfast.
“But, as always, the devil will be in the detail.
“This deal is liable to further scrutiny from the US administration that may see it as an attempt to dodge their trade tariffs.
“GMB hopes both Bombardier and Airbus have taken cast iron legal advice to ensure they don’t get rid of one legal challenge only to open themselves up to another.”