Boeing questions potential U.S. CSeries plant: Report
Boeing Co. isn’t buying Bombardier Inc.’s assurances that it will build an assembly line in Alabama under a partnership with Airbus SE on the Canadian planemaker’s marquee jetliner.
“Bombardier and Airbus are extremely unlikely ever to actually establish a CSeries assembly line in Alabama,” Boeing said in a letter to U.S. Commerce Secretary Wilbur Ross. Plans for the new facility, which would probably be located next to an existing Airbus plant in Mobile, “would make no economic sense,” the Chicago-based company said.
The letter, dated Nov. 13, is part of Boeing’s case before U.S. authorities, which are investigating whether duties should be imposed on U.S. sales of the C Series. Boeing accused Bombardier of selling the jet to Delta Air Lines Inc. at “absurdly low prices.” The Commerce Department so far has sided with Boeing, recommending preliminary tariffs of about 300 percent on the narrow-body plane.
Airbus agreed last month to take a majority stake in the C Series project, offering the European planemaker’s marketing and manufacturing expertise in exchange. Executives of both companies have argued that the C Series shouldn’t face duties if it’s assembled in Alabama. U.S.-made parts and components on the C Series already exceed 50 percent, Bombardier Chief Executive Officer Alain Bellemare said Tuesday at an investor conference.
Building the C Series facility in Mobile could cost more than $300 million, Bombardier said in a Commerce Department filing dated Nov. 6.
Bombardier doesn’t “have enough orders for the C Series to sustain full production” at the company’s existing C Series assembly line in Mirabel, Quebec, “for any appreciable period of time,” Boeing said in its letter. “The only reason to conduct any C Series assembly activities in the United States would be to attempt to circumvent the antidumping and countervailing duties.”
Penalties should apply to C Series jets even if a second assembly line is established in the U.S., Boeing also said.
“Boeing is wrong,” Bombardier spokesman Mike Nadolski said Wednesday by email. “The partnership was motivated by the economic opportunities of collaborating on the C Series. An added benefit of the U.S. assembly facility is that, to the extent U.S trade laws were intended to promote U.S. manufacturing, it achieves that goal and means that U.S. airlines will get a U.S.-made C Series.”
Representative Bradley Byrne urged the Commerce secretary to support the Airbus-Bombardier venture. The new assembly line in Mobile “will result in hundreds more high-paying, high-skill American jobs,” the Alabama Republican said in a Nov. 13 letter addressed to Ross.
The U.S. International Trade Commission is expected to deliver a final ruling early next year on whether Boeing was harmed by the C Series program. If the Washington-based tribunal sides with Boeing, the duties will stay in place for imports of the jets. That would set up the next battle: Whether Airbus-built C Series in Alabama are “made in America.”