by protomok on 10/17/17, 1:34 AM with 123 comments
by ChuckMcM on 10/17/17, 9:10 PM
The hack allows Bombardier to recoupe its design costs by selling planes. They will no doubt get less margin selling them through Airbus but it is better that having to flush that investment down the tubes.
by allengeorge on 10/18/17, 2:26 AM
This is a huge blow for the Canadian aerospace industry, but the best that BBD could do in a bad situation.
The plane itself is great, but management incompetence and customer worries about the company's long-term prospects made it a hard sell. Then, when BBD did make a sale to Delta, Boeing's naked politicking and the current administration's unreasonable duty made the situation untenable. BBD is essentially handing over the keys to the kingdom here: Airbus gets control of the program for nothing (they only have to allow the C series to be manufactured at an existing plant in Mobile) and if the program is successful they have the right to buy out the entire partnership; if it's unsuccessful they can walk away. Plus, it's unclear to me whether it's a way to actually push the C-series or a way to start conversations around it and then upsell customers to one of Airbus' existing narrowbodies. Again, not a good situation for BBD.
Airplane manufacturing is a heavily political, heavily subsidized business, and since Canada is much smaller than the other players on the stage (US, EU, China, Russia) with a non-existent defence program it doesn't have the money or the weight to effectively compete.
by strictnein on 10/17/17, 8:47 PM
Not sure where people discussing this as a US vs CA or that this is somehow a win are getting those ideas from.
by pmilot on 10/17/17, 7:58 PM
With this move by Airbus, the government's stake in the project was reduced from 49% to 19%. I'm no economist, but it seems that the crisis was avoided?
by moeadham on 10/18/17, 1:31 AM
Boeing likely mis-calculated the politeness of their neighbors.
by chinathrow on 10/17/17, 8:14 PM
by Zarathust on 10/17/17, 8:35 PM
Bombardier Inc. announced Monday it has sold a majority stake in its CSeries passenger jet business to European aerospace giant Airbus for no cost.
by _Codemonkeyism on 10/18/17, 5:39 AM
"The current Airbus A320, a rival for the CSeries, is for 180 passengers or more and Airbus hasn't sold an A320 in three years."
A320neo (the "current Airbus A320") orders:
2015: 583
2016: 343
2017: 47
by addicted on 10/17/17, 8:21 PM
And this should further endear Canada to the EU over the US, and probably make the Brits also happier about the EU (The British jobs were most at risk).
I am no expert but that's what it looks like to me. Nice move if so.
by gok on 10/17/17, 10:51 PM
by slavik81 on 10/17/17, 8:08 PM
by sho on 10/18/17, 5:49 AM
A lot of people think their management decline started when they moved their HQ to Chicago, away from their R&D and manufacturing. But prior to this incident they demonstrated not only how much influence they can wield in the US Govt, but their willingness to use it whatever the appearance, with the KC-46A contract - the US Military had already decided to buy Airbus's a330-derivative tanker aircraft, but Boeing managed to get the decision overturned and their objectively inferior tender accepted instead. From the press coverage at the time the unfairness, and near-corruptness, of this manoeuvre was not lost on other governments.
And now this - again they have demonstrated their hooks into government at the highest levels and willingness to use them for dirty tricks, in this case an outrageous 300% tariff on a tiny non-competitor based on absurd arguments about healthcare costs. Literally no-one in the aviation community thought it was even slightly reasonable.
So now they've driven that tiny company and its airline program (and to be fair, they made a lot of their own mistakes) into the arms of their biggest competitor and by extension the EU. The biggest strategic blunder imaginable. Now the C300 is an EU program. And yet they just keep upping the ante:
https://twitter.com/Boeing/status/920373843142864896
Last week they were trying to dare the governments of Canada and Ireland to start a trade war. Now it's the governments of France and Germany as well. And yet they continue to just hold down that accelerator. It's not lost on anyone that their theme of "america first no matter what" and hardball negotiations/threats by twitter seems eerily reminiscent of the current government in DC.
So yeah. Boeing, and by direct extension the US Government, seems intent on playing an ever more dangerous game of Trade War Chicken with an ever increasing list of opponents. If they win the battle but lose the war, like they did with BBD, the solution is to start a bigger war. It's shocking, it's arrogant, and America's biggest exporter has a lot to lose should anyone decide to call their bluff.
The geopolitical implications of this are interesting too. Just like there's no way Boeing is acting like this without assurances from the government that it's got their back, there's no way Airbus would have moved without assurances from its own member governments. The speed of the action was breathtaking - negotiations only started in August. This can only mean that the EU feels it has the upper hand should any real dispute arise. It's pushed Canada closer to the EU too. I wonder what's next.
by drzaiusapelord on 10/17/17, 8:53 PM
Not sure what Trump's endgame here is other than alienating once allies and economic partners. Trump went instantly to nuclear and Trudeau was forced to respond in kind. This is what happens when diplomacy is little more than namecalling and 'my way or the highway.' The USA isn't this unstoppable juggernaut everyone must bow down to and accept being bullied from. Europe, China, Japan, Russia, Brazil, Turkey, etc are all vying for influence and will take advantage of our every misstep. Europe certainly did today.
by bookbinder on 10/17/17, 7:47 PM