This is an interesting hack. According to sources Airbus gets 50.1% of the Class C jet's "business", in exchange for building them in a pre-existing plant in Alabama so that they are immune to the 300% tariff that the US was planning to impose (considering to impose?) on them.<p>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.
I'll post what I did earlier:<p>This is a huge blow for the Canadian aerospace industry, but the best that BBD could do in a bad situation.<p>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.<p>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.
A good friend worked at Bombardier until recently and I got the full sales pitch and walkthrough of a model of one of these planes a couple of years ago at an overseas airshow. They were really nice and had some innovative features. Unfortunately, this was a big bet by Bombardier and it failed. "They are fucked" were his words, when I asked him about it today.<p>Not sure where people discussing this as a US vs CA or that this is somehow a win are getting those ideas from.
This is pretty big news for people living in Québec, as the Québec government invested heavily in the C-Series last year. At the time, the move was criticized as a big gamble and an irresponsible handling of taxpayer's funds because the C-Series' success was far from guaranteed and there were legitimate concerns about Bombardier's leadership.<p>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?
Bombardier is hugely popular in Québec. The press coverage here has been so anti-boeing they have launched a PR campaign. Any politician that signs any military contract with Boeing is going to pay a huge price in Québec; maybe high enough to lose an election.<p>Boeing likely mis-calculated the politeness of their neighbors.
And Boeing issuing statements like it's kindergarten.<p><a href="https://twitter.com/Boeing/status/920373843142864896" rel="nofollow">https://twitter.com/Boeing/status/920373843142864896</a>
"Buys" is a strong word for "gets for free". From the article:<p>Bombardier Inc. announced Monday it has sold a majority stake in its CSeries passenger jet business to European aerospace giant Airbus for no cost.
Quality journalism<p>"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."<p>A320neo (the "current Airbus A320") orders:<p><pre><code> 2015: 583
2016: 343
2017: 47
</code></pre>
~1000 orders in the last three years, with 5000 orders all in all.<p><a href="https://en.wikipedia.org/wiki/Airbus_A320neo_family" rel="nofollow">https://en.wikipedia.org/wiki/Airbus_A320neo_family</a>
Sounds like Airbus is getting parts of Bombardier for cheap and Bombardier is getting the clout to fight Boeing and the US's patently obvious, possibly illegal, trade protectionism.<p>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).<p>I am no expert but that's what it looks like to me. Nice move if so.
A shrewd move by Airbus. It's likely they could have gotten the EU to enact a large tariff against the CSeries in Europe too, but instead they're getting a 737 MAX 7 competitor for free and getting to avoid political fallout in the process.
Boeing is playing an extremely dangerous game here and they just keep on doubling down. They have an awful lot to lose if other countries, especially the EU, start to think they've crossed the line.<p>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.<p>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.<p>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:<p><a href="https://twitter.com/Boeing/status/920373843142864896" rel="nofollow">https://twitter.com/Boeing/status/920373843142864896</a><p>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.<p>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.<p>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.
This is fairly predictable. With a hostile Trump administration towards Canada, we're losing influence with Canadians so they will continue to cozy up with Europe.<p>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.