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Boeing says it won’t adjust strategy because of Airbus C Series deal

It's increasing the number of 737 Max planes it will produce monthly to supply the record backlog.


MONTREAL — Boeing says it doesn’t need to adjust its narrowbody aircraft strategy in light of the C Series partnership between Airbus and Bombardier Inc.

The Chicago-based manufacturer is increasing the number of 737 Max planes it will produce monthly to supply the record backlog of orders for its re-engined planes.

Boeing chairman, president and CEO Dennis Muilenburg says its family of 737 planes is winning, including the smaller Max 7s.

However, demand is focused on the larger Max 8 and 9 planes with 162 to 220 seats. It foresees demand for 41,000 aircraft over the next 20 years, including 29,000 narrowbodies.

Bombardier has said it expects to capture half of the 6,000 orders for 100- to 150-seat aircraft it forecasts over the next two decades.

Muilenburg says Boeing isn’t surprised by the partnership announced last week that will see its large European rival take a majority stake in the C Series for no financial payment.

While Boeing (NYSE:BA) welcomes competition, he repeatedly said during a quarterly conference call Wednesday that all players need to play by the same rules.

Boeing filed a trade complaint with the U.S. Department of Commerce in April against the C Series, arguing the plane was heavily subsidized by the Canadian and Quebec governments that allowed Bombardier to sell the planes to Delta Air Lines at deep discount prices.

The planes were levied preliminary countervailing and anti-dumping duties that would quadruple the price of planes sold in the U.S.

A final rate is slated to be announced in December. The U.S. International Trade Commission will decide in February if Boeing was harmed by the C Series.

Bombardier and Airbus believe the C Series will avoid duties because the planes sold to U.S. customers will be supplied by Airbus’ plant in Mobile, Ala. Boeing says that won’t let it escape duties.

Boeing says it always evaluates its strategic options and the C Series deal doesn’t change that. Muilenburg didn’t directly respond to a question about whether it would enter into a joint venture of its own to compete with the C Series, but said mergers and acquisitions are generally part of its available options.

Muilenburg acknowledged that Boeing’s trade complaint will have ripple effects with customers and countries but believes the relationship with Delta, Canada and Britain will outlast any current threats of retaliation.

INDEX: TRANSPORT TRADE NATIONAL BUSINESS POLITICS


Received Id 20171025B5987B on Oct 25 2017 12:03

News from © Canadian Press Enterprises Inc. 2016

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