The recent anti-dumping duty handed down by the U.S Department of Commerce on Bombardier, Inc.’s (TSX:BBD.B) CSeries planes last week has resulted in continued dismay from regional and Federal governments in both Canada and the U.K.
Bombardier continues to be one of the most highly-touted and important employers in Quebec and Northern Ireland, two regions which have traditionally felt a greater need to keep large employers such as Bombardier in their back yard.
The 80% anti-dumping duty handed down by the U.S. regulator is on top of a 219% countervailing duty which has already been handed down, a series of devastating duties for the CSeries manufacturer – amounts which will all but certainly disallow Bombardier’s airplanes into the U.S. market.
Allegations that the Canadian, Quebec, and British governments subsidized Bombardier’s production of the CSeries are hard to question, with large investments in the company’s CSeries plane being the only reason Bombardier has been able to continue with this project – a project which has gone billions over budget and experienced years of delays, and one which has seen only a few planes shipped to customers amid an order base which has disappointed many analysts given the technological superiority of the CSeries plane.
The CSeries plane truly is one of the best planes in its class in the world; that said, with the U.S. market (the easiest and most profitable market to be in) out of the question, Bombardier will be competing for contracts in countries where it will be clear that Bombardier is desperate for orders, leading to a situation where rival Embraer SA is likely to be able to pick up contracts for the orders Bombardier is unwilling or unable to meet at the prices demanded by airlines which will now have additional bargaining power.
Invest wisely, my friends.
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