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| Version 0 | Version 1 |
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| Bully Boeing shows Donald Trump's 'America first' policy in action | Bully Boeing shows Donald Trump's 'America first' policy in action |
| (4 months later) | |
| Brexit brigade should tell us why they think Britain will have any clout in US-UK trade negotiations | |
| Wed 27 Sep 2017 19.15 BST | |
| Last modified on Mon 27 Nov 2017 16.19 GMT | |
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| If the Bombardier affair wasn’t so serious for the company’s workers in Belfast and Canada, Boeing’s hypocrisy would be a bad joke. The US company is a $150bn (£112bn) titan whose business is underpinned by a cosy relationship with the country’s Department of Defense and a near-duopoly with Airbus in the market for large commercial aircraft. It is grumbling about state-aid for a firm a fraction of its size. It is behaving like a bully. | If the Bombardier affair wasn’t so serious for the company’s workers in Belfast and Canada, Boeing’s hypocrisy would be a bad joke. The US company is a $150bn (£112bn) titan whose business is underpinned by a cosy relationship with the country’s Department of Defense and a near-duopoly with Airbus in the market for large commercial aircraft. It is grumbling about state-aid for a firm a fraction of its size. It is behaving like a bully. |
| As Delta Air Lines, the US customer for the order at the centre of the dispute, has argued, Boeing these days doesn’t make commercial aircraft as small as the 100-seaters it wants. In theory, an invigorated Bombardier, if it was able to extend its C-series planes, might mount a challenge to the US firm’s 737s one day. But that prospect is distant. | As Delta Air Lines, the US customer for the order at the centre of the dispute, has argued, Boeing these days doesn’t make commercial aircraft as small as the 100-seaters it wants. In theory, an invigorated Bombardier, if it was able to extend its C-series planes, might mount a challenge to the US firm’s 737s one day. But that prospect is distant. |
| Boeing’s motivation in pursuing this case is probably twofold. First, causing serious financial damage to Bombardier may discourage more dangerous up-starts, such as Chinese and Russian firms who can summon larger sums than the $1bn the Canadian company secured from the provincial Quebec government in 2015. | Boeing’s motivation in pursuing this case is probably twofold. First, causing serious financial damage to Bombardier may discourage more dangerous up-starts, such as Chinese and Russian firms who can summon larger sums than the $1bn the Canadian company secured from the provincial Quebec government in 2015. |
| Second – and more significantly – Boeing’s lawyers will have been encouraged by President Trump’s protectionist rhetoric. It is useful for them to know what the language means in practice. A lot, it turns out: the 219% tariff slapped on Bombardier’s planes for Delta after the ruling by the US Commerce Department is far stiffer than expected. | Second – and more significantly – Boeing’s lawyers will have been encouraged by President Trump’s protectionist rhetoric. It is useful for them to know what the language means in practice. A lot, it turns out: the 219% tariff slapped on Bombardier’s planes for Delta after the ruling by the US Commerce Department is far stiffer than expected. |
| This dispute has a long way to run, of course. In the second stage, Boeing must demonstrate it has suffered material harm. That, in theory, ought to be difficult for the reason Bombardier and Delta state – the C-series is in a different market. Yet politics always percolates this industry. The US International Trade Commission’s view is impossible to read. | This dispute has a long way to run, of course. In the second stage, Boeing must demonstrate it has suffered material harm. That, in theory, ought to be difficult for the reason Bombardier and Delta state – the C-series is in a different market. Yet politics always percolates this industry. The US International Trade Commission’s view is impossible to read. |
| What should the UK government do? Lobbying Trump has achieved nothing so far, as Theresa May, and also Canadian prime minister Justin Trudeau, have discovered. Threatening Boeing with loss of UK defence contracts has merit but, as the US firm is always quick to point out, it employs 12,000 people in the UK. It is hard to see what other tactics UK and Canadian politicians can deploy. Delta could encourage other US airlines to shout support for Bombardier, but has presumably done so already. | What should the UK government do? Lobbying Trump has achieved nothing so far, as Theresa May, and also Canadian prime minister Justin Trudeau, have discovered. Threatening Boeing with loss of UK defence contracts has merit but, as the US firm is always quick to point out, it employs 12,000 people in the UK. It is hard to see what other tactics UK and Canadian politicians can deploy. Delta could encourage other US airlines to shout support for Bombardier, but has presumably done so already. |
| If a fair negotiated settlement proves impossible, everybody will have learned a useful lesson about “America first.” Boeing didn’t need to pick this fight, and the US administration could stop it. It would be useful if the free-market wing of the Brexit brigade could tell us why, exactly, they think the UK would have any clout in a US-UK trade negotiation. | If a fair negotiated settlement proves impossible, everybody will have learned a useful lesson about “America first.” Boeing didn’t need to pick this fight, and the US administration could stop it. It would be useful if the free-market wing of the Brexit brigade could tell us why, exactly, they think the UK would have any clout in a US-UK trade negotiation. |
| What to make of Labour plans for City | What to make of Labour plans for City |
| Business leaders may never take up the Jeremy Corbyn chant but, like everyone, they can see that the possibility of the Labour leader becoming prime minister is real. So, while there was predictable hostility to passages in Corbyn’s speech in Brighton, reactions from business lobby groups carried a strong strain of “let’s talk”. | Business leaders may never take up the Jeremy Corbyn chant but, like everyone, they can see that the possibility of the Labour leader becoming prime minister is real. So, while there was predictable hostility to passages in Corbyn’s speech in Brighton, reactions from business lobby groups carried a strong strain of “let’s talk”. |
| Try this from Carolyn Fairbairn, director general of the CBI: “Where Labour has sought insight from business, such as on its policy for Brexit and investment in infrastructure, we have seen sensible proposals that support jobs and living standards.” | Try this from Carolyn Fairbairn, director general of the CBI: “Where Labour has sought insight from business, such as on its policy for Brexit and investment in infrastructure, we have seen sensible proposals that support jobs and living standards.” |
| Specifically, the CBI would like to talk about nationalisation and business taxes. Good idea – a conversation might suit both sides, if only so that we can all have a better idea of what is being contemplated. | Specifically, the CBI would like to talk about nationalisation and business taxes. Good idea – a conversation might suit both sides, if only so that we can all have a better idea of what is being contemplated. |
| On nationalisation, Labour has sown confusion this week with its stance on private finance initiative contracts. Shadow chancellor John McDonnell said they would be brought “back in-house” and seemed to mean all 700-plus contracts. Labour’s briefing notes said the contracts would be taken over “if necessary”, which is a different proposition, possibly to the tune of several tens of billions of pounds in up-front costs. What’s the policy? | On nationalisation, Labour has sown confusion this week with its stance on private finance initiative contracts. Shadow chancellor John McDonnell said they would be brought “back in-house” and seemed to mean all 700-plus contracts. Labour’s briefing notes said the contracts would be taken over “if necessary”, which is a different proposition, possibly to the tune of several tens of billions of pounds in up-front costs. What’s the policy? |
| On utilities, we’ve heard little beyond the fact that Labour is in favour of public ownership “to put them at the service of our people and our economy and stop the public being ripped off”. That there are scandalous examples of rip-offs hardly requires debate. The water industry, which Corbyn highlighted, has seen egregious examples of off-shore owners collecting big dividends for little risk while executives are paid life-changing sums. | On utilities, we’ve heard little beyond the fact that Labour is in favour of public ownership “to put them at the service of our people and our economy and stop the public being ripped off”. That there are scandalous examples of rip-offs hardly requires debate. The water industry, which Corbyn highlighted, has seen egregious examples of off-shore owners collecting big dividends for little risk while executives are paid life-changing sums. |
| Why, though, has the option of installing better regulators under a tougher regulatory system been rejected? It would be cheaper to execute and the gains for consumers might be more certain and arrive more quickly, as even an unfriendly business voice might be able to demonstrate. | Why, though, has the option of installing better regulators under a tougher regulatory system been rejected? It would be cheaper to execute and the gains for consumers might be more certain and arrive more quickly, as even an unfriendly business voice might be able to demonstrate. |
| There is also a question of priorities. Nationalising the railways, the water companies, the energy companies and the Royal Mail would be a huge undertaking. A business manager might advise picking one and demonstrating success before attempting a second. That would be dull – but pragmatic. | There is also a question of priorities. Nationalising the railways, the water companies, the energy companies and the Royal Mail would be a huge undertaking. A business manager might advise picking one and demonstrating success before attempting a second. That would be dull – but pragmatic. |
| Bombardier | |
| Nils Pratley on finance | |
| Boeing | |
| Airline industry | |
| Manufacturing sector | |
| Trump administration | |
| Jeremy Corbyn | |
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