Bombardier raises hopes Airbus deal could save 1,000 jobs in Belfast

European group challenges US rival Boeing by taking stake in Canadian group’s C-Series programme to help it avoid tariffs

Bombardier has raised hopes of safeguarding 1,000 jobs in Belfast, saying it was confident a deal for Airbus to take a majority stake in the C-Series jet programme would help it avoid punishing US import tariffs.

The two companies hope to circumvent the 300% import tariff by assembling the C-Series passenger jets destined for US customers at Airbus’s factory in Alabama.

Should the deal proceed, the manufacture of wings for the C-Series is expected to remain in Belfast, where 1,000 people are employed on the programme. Bombardier employs a further 3,000 people in Belfast on other projects.

“Bombardier remains committed to our Northern Ireland operations,” a spokesperson for the company said. “This deal allows us to continue to support the jobs associated with the C-Series in Belfast and gives us more stability.”

The Canadian company’s share price was up by nearly 20% in early trading on the Toronto stock exchange on Tuesday after the announcement of the Airbus deal.

It is the latest twist in a bitter trade row between Bombardier and Boeing, the American aircraft maker which complained that aid from the Canadian and UK governments amounted to illegal subsidy, allowing Bombardier to sell its C-Series jets at “absurdly low” prices in the US.

The complaint was upheld by the US Department of Commerce, which slapped the huge tariff on the Montreal-based company, putting a contract with US airline Delta and the whole C-Series programme at risk.

“Assembly in the US can resolve the issue,” said Alain Bellemare, the chief executive of Bombardier, of the steep import levy in the US, adding that the two companies hoped to finalise the deal within six to 12 months.

However, Boeing warned that its two rivals should “think again” if they believed the deal would allow them to avoid the levy.

Phil Musser, Boeing’s senior vice-president of communications, tweeted:

If @Airbus and @Bombardier think this deal will get them around the rules....#thinkagain

— Phil Musser (@pmusser) October 17, 2017

Boeing added in a separate statement: “This looks like a questionable deal between two heavily state-subsidised competitors to skirt the US government findings. Everyone should play by the same rules for free and fair trade to work.”

Unite, the UK’s largest union, welcomed the partnership between Bombardier and Airbus but cautioned it was not 100% satisfied that jobs in Northern Ireland were secure.

“This news gives us cause to have some hope, but we are far from out of the woods and there is still much work to do to secure Bombardier jobs in Northern Ireland and the rest of the UK,” said Steve Turner, assistant general secretary at Unite with responsibility for aerospace.

“The deal could take a year or so to get through the relevant competition authorities while Boeing in the US is unlikely to sit idly by. During this period there is a danger that tariffs will be imposed and the C-Series will be effectively locked out of aviation’s largest market.”

The business secretary, Greg Clark, said the partnership was “a very big step forward” in safeguarding Bombardier jobs in Belfast.

“Not only has Airbus committed to Belfast being the home of the wing manufacturer for the C-Series, but they are pointing to the possibility of expanding the output and the order book,” he said.

Clark added that he would continue to work with the Canadian government to fight the Boeing complaint.

Under the terms of the new partnership, Airbus would take a 50.1% stake in the C-Series programme. It would leave Bombardier with about 31%, while the financier Investissement Québec would own about 19%.

Boeing complained to US authorities in April that aid received by Bombardier from the Canadian and UK governments amounted to illegal subsidies, allowing it to sell its C-Series jets to the US airline Delta at below cost price.

Delta has placed a $5.6bn (£4.2bn) order for up to 125 of the new aircraft, with delivery due to begin next year.


Angela Monaghan

The GuardianTramp

Related Content

Article image
Saving Bombardier jobs needs more than fluffy words, union tells May
Government under fire as workers from Belfast aircraft plant prepare to hold protest at Houses of Parliament

Rupert Neate

10, Oct, 2017 @5:28 PM

Article image
Airbus takes majority stake in Bombardier jet project
European group joins Canadian multinational’s C-series programme, with ‘win-win’ deal potentially saving 1,000 jobs in Belfast

Nicola Slawson and Angela Monaghan

17, Oct, 2017 @8:54 AM

Article image
Bombardier puts Belfast wing-making plant up for sale
MPs and unions demand assurances as 4,000 skilled jobs put at risk in Northern Ireland

Rob Davies

02, May, 2019 @1:12 PM

Article image
Airbus to look at buying Bombardier Belfast plant
Wing production operation could be run by a third-party supplier, says Airbus CEO

Jasper Jolly

16, May, 2019 @1:01 PM

Article image
Belfast workers 'holding their breath' for verdict in Bombardier trade dispute
Thousands of jobs in Northern Ireland at risk if US authorities side with rival plane maker Boeing over state subsidies

Angela Monaghan

26, Sep, 2017 @11:19 AM

Article image
Bombardier to cut 7,500 jobs, raising fears for British workforce
Canadian manufacturer’s operations in Belfast and Derby could be vulnerable as it announces second wave of job cuts in year

Gwyn Topham Transport correspondent

21, Oct, 2016 @3:35 PM

Article image
Bombardier: 1,400 Derby jobs are gone four months after PM's pledge to help
Last remaining train maker in UK halves its workforce and calls on government for rethink after losing £3bn contract

Dan Milmo, industrial editor

05, Jul, 2011 @6:28 PM

Article image
US escalates trade dispute with UK and Canada over Bombardier
Plans for further 80% duty on export of aircraft built by company that employs more than 4,000 people in Belfast

Julia Gregory and agencies

06, Oct, 2017 @9:05 PM

Article image
UK government and aerospace firms join forces after £28bn deal collapse

Strategic response to BAE-EADS merger failure follows fears UK will miss out on multibillion-pound manufacturing windfall

Dan Milmo, industrial editor

13, Jan, 2013 @8:00 PM

Article image
Crossrail £1bn contest must be fair or UK risks consequences, says Siemens
German contender for deal vital to survival of Bombardier plant in Derby warns of threat to investment in Britain

Dan Milmo, industrial editor

26, Feb, 2012 @4:45 PM