Time for Boeing to Let Bombardier’s C Series Fly
Like the song says, “You gotta know when to fold ‘em.” For Boeing, that time is now, a little more than a week after the U.S. International Trade Commission rejected 4-0 its petition asserting Bombardier, a much smaller Canadian firm, had engaged in unfair trade practices.
Back in May, the U.S. aerospace giant alleged the smaller Canadian firm sold 75 of a new line of passenger planes to Delta at a price so low the Canadian government must have been providing subsidies far exceeding accepted industry practices. Boeing, urging the imposition of retaliatory import tariffs on these C Series jets, also urged the US ITC to investigate.
The ITC, a quasi-judicial independent agency made up of veteran trade practitioners of both major parties, listened, combed through volumes of data, and eventually concluded Boeing and American jobs faced no threat from Bombardier.
In retrospect, it was audacious of Boeing to even initiate the case. To be injured by unfair competition, Boeing first had to be in the game, but the company is not a serious contender in the market for smaller-sized passenger planes like the C Series. The Boeing planes that come closest, the 737s, are too big for many carriers’ regional operations. These airlines must try to fill every seat on every flight to remain profitable. The C Series fit the bill. Knowing this, Boeing did not even vie for Delta’s business. In fact, a few years back, Boeing executives were quite candid in announcing the company would concentrate on dominating the market for jumbo passenger planes in the growing and lucrative international market.
That goal notwithstanding, business is still booming for the smaller 737 class planes, some 5,000 of which are reportedly on back order. This makes the assertion Boeing would be harmed by Bombardier’s sale to Delta even more baffling.
Regarding U.S. jobs, the ITC is always attentive. The commissioners are there to make sure Americans are not put out of work because of unfair trade practices. In this case, Bombardier announced it was going to team up with Airbus, Europe’s aerospace giant, to make the C Series in Alabama, making it “Made in America” and employing as many as 2,000 workers.
Boeing lost fair and square purely on the merits. It wasn’t hurt by unfair competition, and the C Series manufacture does not threaten U.S. jobs. On top of that, however, the investigation revealed Boeing was in secret talks to acquire Embraer, a Brazilian plane manufacturer that could give Boeing the opportunity to play in the market for smaller planes like the C Series. The way trade politics play out, it is not a stretch to consider Boeing might have been manipulating the trade remedy process long enough to come up with its own product for a targeted future market. The unusual 4-0 vote probably in part signals the ITC’s displeasure with Boeing’s attempted manipulation of the market.
This case draws a lot of attention as President Trump works to keep his promise to restore more balance and fairness in U.S. trade policy. Internationalists fret Trump is an extreme protectionist who will spark trade wars that will hurt U.S. businesses and workers as much, if not more than, foreigners. But after the ITC’s decision, Commerce Secretary Wilbur Ross, himself a long-time defender of U.S. manufacturing interests, simply said, “…it shows how robust of system of checks and balances is.” What more needs to be said?
It’s time for Boeing to fold, to accept the ITC’s decision and abandon notions of making another attempt to thwart Bombardier’s success with the C Series. The plane has been well received as an innovative, fuel efficient, roomy and comparatively quiet plane. Let it fly. Airlines and their passengers benefit when companies like Bombardier can bring new designs to the market, provided it is done within the rules of the game. Though government help is common, even essential, in the aircraft industry (as Boeing executives know all too well), the ITC apparently saw no evidence Bombardier crossed the line.
America’s trading partners are on notice that bending and breaking trade rules will no longer be tolerated. The ITC will hand President Trump many opportunities to demonstrate this in the coming months and years. But in the Boeing-Bombardier dispute: case closed.
Peter Roff is a former senior political writer for United Press International and a commentator who appears regularly on the One America News network.
The views and opinions expressed in this commentary are those of the author and do not reflect the official position of The Daily Caller.