Bombardier Just Got Some Really Bad News

The Background 

The legal drama between Bombardier and Boeing took a turn yesterday when the U.S. Department of Commerce ruled in favour of Boeing (surprise, surprise) and slapped Bombardier with a 220% duty on their CSeries commercial planes. Boeing’s been complaining for months that their Canadian competitor was selling jets at below-market pricing, making it impossible for the two companies to compete. The department believes that Bombardier is benefitting from “improper government subsidies” which gives them an unfair advantage over their American rivals. CBC

What Else You Need to Know

The good news is that Bombardier won’t have to cough up the dough until they deliver the CSeries commercial jets they sold to Delta (which is expected to be sometime in the spring). The bad news is they sold 125 of them, so the duty is going to be pretty hefty. This is just the latest development in an ongoing dispute between the two companies that could really impact Bombardier’s future, depending on which way it goes. A final ruling is expected in March. Until then, U.S. officials at the Trade Commission will continue to pour over documents and details to determine whether the deal between Bombardier and Delta actually had a negative impact on Boeing’s bottom line. Oh, and if all that wasn’t bad enough, two of Bombardier’s European railway competitors announced a mega merger.

What’s Next?

The U.S. Department of Commerce is expected to make another ruling on October 4, deciding whether Bombardier “‘dumped’ its CS100s into the U.S. market by selling them below cost.”