Commerce Department to Launch Probe into Boeing, Bombardier Dispute

A Bombardier CS300 is shown during a ceremony to mark the first delivery of the commercial jetliner to Air Baltic in Mirabel Que. Monday

Commerce Department to Launch Probe into Boeing, Bombardier Dispute

The Commerce Department investigation followed a complaint in April from Boeing alleging Bombardier was "dumping" its new CSeries jet with customers including Delta Air Lines Inc.in an effort to win market share, harming the USA company and domestic workers.

The next potential Canada-U.S. trade dispute was unfolding in a Washington courtroom Thursday as aerospace actors clashed over details that could hold implications for the global trade in mid-sized airplanes.

Bombardier representatives countered that their planes never competed with Boeing in a sale to Delta airlines - which the American rival describes as a seminal moment.

"Boeing admits it does not compete with exports of the CS100 aircraft, so it is all the more hard to see these allegations as legitimate, particularly with the dominance of the Boeing 737 family in the US market", according to Freeland's statement.

The probe could lead to USA taxes on Bombardier's new jetliner, while also pitting Boeing against Delta Air Lines (DAL) , a Bombardier customer.

Boeing didn't comment on the status of the sales talks with Canada, but said it values the country as a "customer and supplier-partner". "If you don't fix it now, it will be too late to do anything about it later".

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Canada's government is warning it could cancel a planned purchase of 18 Super Hornet fighter jets from Boeing Co. because of U.S. Department of Commerce anti-dumping investigations against Canadian plane maker Bombardier.

Boeing has petitioned the U.S. Commerce Department and the U.S. International Trade Commission to investigate subsidies of Bombardier's CSeries aircraft.

The preliminary ruling on the 100- to 150-seat planes is due by June 12. The company also shored up its finances by selling a 30 per cent stake in its railway division to pension fund manager Caisse de depot for US$1.5 billion.

It complains that Bombardier has received more than US$3 billion in government subsidies so far that have allowed it to engage in "predatory pricing". If Bombardier reaches its stated goal, he said, it would squeeze Boeing from that market and cost the company US$330 million a year in annual sales. Boeing lawyers argued Thursday that Bombardier's own words prove it was rescued financially by multibillion-dollar assistance from the Quebec government.

Boeing's annual sales were US$94.6 billion previous year. Bombardier revenues previous year were $16.3 billion.

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