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Airbus and Bombardier just delivered a huge slap in the face to Boeing and the US government by joining forces over the Canadian manufactures newest plane, the C-Series. Airbus has taken a majority share in Bombardiers struggling C-Series project in a move to protect jobs worldwide and provide the Canadian company with Airbuses Global firepower.
The move comes just weeks after Boeing persuaded the Trump Administration to put huge import taxes on the Canadian regional jet. It was a move which was supported by the US commerce, who in turn put a 300% import duty tax on the Canadian plane.
The deal that was announced on Tuesday by Airbus and Bombardier will see Airbus take a 50.1% share in the C-Series project meaning the Canadian manufacturer can bypass the tough US trade penalties that were put in place. It will also give Airbus a new ally in its battle with rival Boeing over global aircraft sales.
The deal between the two aircraft manufactures has been completed with Airbus taking over a majority stake in the C-Series project for nothing. It’s now expected that Airbus can use its global influence to help boost sales and marketing for the new regional jet which has been struggling to find airlines to buy it.
Unite the Union, based in the UK has welcomed the news of this deal. Unite has up to 1000 of its members based in a factory in Belfast, Northern Ireland where Bombardier manufacture the wings for the C-Series. They had been worried about the future of the project and what it meant for jobs at the Belfast facility. Davey Thompson, regional officer of Unite said: “We have received assurances that this will mean that employment associated with the manufacture of C-Series wings will remain in Belfast”.
He went on to say “Unite will continue our efforts to ensure the withdrawal of the US tariffs on the C-Series but this is a welcome development…”
This deal will leave Bombardier with only around 31% of the shares in the regional jet while the remaining 19% is owned by a Canadian financier.
Airbus is hoping to bypass the new US tariffs by assembling some of the C-Series jets at its Alabama factory. This is good news for US airline, Delta who have a $5.6bn order for around 125 jets, which Bombardier are due to start delivering next year. The whole deal was thrown into turmoil by Boeing when they said that the aid received by Bombardier from the UK and Canadian governments was ‘Illegal’ and Boeing believed it meant the regional jets could be sold for less than cost price.
Bombardier employs around 4000 people at its Belfast factory but only around 1000 work on the C-Series project and while this deal between the two companies is good news, it still leaves the other 3000 workers wondering what the future holds for them. As senior figures at Bombardier work hard to try and secure its future.
Airbus CEO, Tom Enders said “This is a win-win for everybody” he also said “I have no doubt that our partnership with Bombardier will boost sales and the value of this programme tremendously” The decision to manufacture the regional jet in Alabama is set to create new jobs for the US but is also likely to come under scrutiny from the US authorities and indeed Boeing!
For now, Airbus and Bombardier seem to have got ‘one up’ on Boeing but the devil is always in the details and I’m sure all the l’s will need to be dotted and T’s crossed before all parties are satisfied. However, the future should now look bright for Bombardiers new and innovative Regional jet!