219%. That the duty that Bombardier now has to pay in a recent (non binding?) decision in the ongoing war between Boeing and them.
According to Hoyle, the story reads that Bombardier nabbed a nice contract to supply Delta with shiny new CS100 planes. Delta having chosen them over Boeing or any other company. So what’s Boeing’s beef other than sour grapes?
Subsidies. It’s all about that.
See, Bombardier keeps getting millions and billions funneled to it on the backs of the Quebec government as well as John and Jane Canadian Taxpayer. They claimed that without this cash, they’d be squeezed out of the market and the job losses would be immeasurable and devastating to the Canadian economy.
So they got their handout.
And then promptly laid off thousands while cutting themselves nice fat bonus cheques.
Cry poor then spend the handouts on yourselves? So did the average Canadian really win anything with the handout provided?
Nope.
We’re as Canadian as the next guy and we love our country (most days), but like another expressed in his article, we’re hard pressed to rally behind Bombardier on this one. Really hard pressed. We wouldn’t back them if we had a gun to our heads, to be honest.
Yet they, like the banks, must have obviously been declared “too big to fail”. Hence the generous allowance given them by our ruling government.
They’ve been throttled in the media and in social circles mercilessly since the announcement of the layoffs and almost every day since. These bad optics are of their own design and by their own hands. Hard to feel sorry for folks too stupid to know what kind of shitstorm they’d set off with the actions they took immediately following the handout.
And then the Delta deal happened…
With Boeing crying foul, alleging that Bombardier is more or less “dumping” their planes on the US market at well below cost, thanks entirely to the subsidies provided them. We can’t argue against that either, because there’s nothing to argue with. They were given billions and squandered it, and seem to have used it to get the sweet deal at pretty much cost to Delta.
Much like the US accusing Canada over softwood and the hefty countervailing duties imposed, same too now with this. At a mind numbing 219%, this means the planes will clock in now at almost triple the initial cost. Feasibly, there’s no realistic way Bombardier can afford the duties and thus the contract and thus would need to withdraw (and likely face some penalty for doing so).
The one thing that bothers us the most is the US decision and verbiage by Boeing about “market rate”. Who determines that fabled market rate anyway? And further, since Boeing doesn’t even have a comparable plane in their fleet, how would they know what market value would be for such a plane?
That part bothers us immensely.
But still not enough for us to stand behind Bombardier.
Speculation is that Boeing challenged this deal not because they simply got squeezed, but to make a play to hedge themselves against a future for those planes that they don’t even have. To provide a cushion to themselves against such planes taking a chunk of their contracts (because they don’t make them), instead relying on older and more expensive models they DO build.
Smart play really.
Bombardier already has a well established history of fuck ups and delays. The train debacle in Toronto being a notable one. They keep kicking the can further down the road and nothing has materialized on the contract they agreed to with Toronto to provide them said trains. In the meantime, with all the delays and time wasted, Toronto could’ve went with a different provider, told Bombardier to go fuck themselves, and they’d probably have them by now. In fleet and fully functional.
But hey, we need to support Canadian companies, right?
Hell, even the UK is all up in brow over this fiasco and they weighed in suggesting that deals with the US may be strained as a result unless they more or less “come to their senses” and back off the outrageous duties.
Look, we’re all for patriotism and making sure that Canadians have jobs and juicy deals to look forward to, but the bottom line is – when a company this size and this scope can’t get their house in order…let them fucking fail. All Canada managed to do was to throw good money after bad. Now with the 219% duty imposition, and the deal all but scuttled, how soon will we see Bombardier lining up once again, hat in hand looking for more free money from the taxpayer?
Oh don’t kid yourselves – it’ll happen. As sure as sunrise and sunset it’ll happen.
They’ll play the patriotism card and the money will flow. More layoffs will happen, more deals will get challenged, and more bonus cheques will be cut.
That’s the pitiful thing about Canada and being Canadian. We’re too nice, too gullible, and too laid back to know when we’ve fucked ourselves and everyone around us. Exponentially worsened the further up the flagpole we go, all the way to the top – being the Government itself.
We wanna root for a Bombardier victory but we know too well we’d be setting ourselves up as hypocrites. Our hypocrisy knows some bounds. This would cross them.
Right now, all we wanna see is Bombardier shed the contract they never should’ve been awarded, take any penalties that may be awarded as per the contract agreement signed, and to have the Government look at them with their hat in hand, and close the doors on their faces.
It’s rough to say that you WANT a company to fail, but this is the best solution for everyone concerned. Like they say, the popular decision is not always the right one, and the right decision is not always the popular one.
Allowing them to reap what they sow and to watch them fail is the right choice for all Canadians, and the taxpayers especially.
But it won’t be a popular choice.
Free your 8
~ SC
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