{"id":1228,"date":"2017-10-17T14:53:45","date_gmt":"2017-10-17T13:53:45","guid":{"rendered":"http:\/\/blogs.sussex.ac.uk\/uktpo\/?p=1228"},"modified":"2017-12-12T16:48:35","modified_gmt":"2017-12-12T16:48:35","slug":"boeing-bombardier-and-brexit-ii","status":"publish","type":"post","link":"https:\/\/blogs.sussex.ac.uk\/uktpo\/2017\/10\/17\/boeing-bombardier-and-brexit-ii\/","title":{"rendered":"Boeing – Bombardier and Brexit II"},"content":{"rendered":"Share this article: <\/em> \"Facebook\"<\/a>\"twitter\"<\/a>\"reddit\"<\/a>\"pinterest\"<\/a>\"linkedin\"<\/a>\"mail\"<\/a>

\"\"17 October 2017<\/span><\/em><\/p>\n

Steve McGuire is Professor of Business and Public Policy and\u00a0Head of the School of Business, Management and Economics at the University of Sussex. He is a Fellow of the UKTPO.<\/em><\/span><\/p>\n

Bombardier has found an elegant solution to its trade problems with the United States: sell a controlling stake in the programme to a company with deeper pockets to defend itself – and with a US production base immune, by definition, from US tariffs.<\/span><\/p>\n

The agreement between Bombardier and Airbus Industrie will see the Canadian company cede control of the C-Series programme to the European company.\u00a0 Airbus takes 50.1% of the programme, while Bombardier owns 30%.\u00a0 Finally, the Quebec provincial government retains an interest of 19.9% and a way to ensure that Quebec taxpayers interests are better defended.\u00a0 That Airbus seemed to put up no cash for its stake says a lot about the urgent need of Bombardier to put some boundaries around its exposure to the programme and the trade dispute.<\/span><\/p>\n

From the UK’s perspective, the deal provides some assurance of the 4,000 jobs in Northern Ireland that, directly or indirectly, depend on wing-making work for the C-Series.\u00a0 Airbus will provide marketing and financing heft, as well as a US base for final assembly.\u00a0 Airbus’ facility in Mobile Alabama has been operating for two years\u00a0and is a boon to employment in that southern US state.\u00a0 Though a second final assembly plant in Quebec will still operate, it would seem likely that the Mobile facility will come to be the favoured location; it effectively jumps any tariff wall the Trump Administration might raise.\u00a0 Mobile already makes the smallest member of Airbus’ aircraft family, the single-aisle A320, so presumably, the re-tooling required would be minimal.<\/span><\/p>\n

Questions will undoubtedly be asked about Airbus’ potential capture of the value of this project, given that the Canadian government offered significant financial support to Bombardier.\u00a0 If the C-series does recover in the marketplace, the principal beneficiary will be Airbus.\u00a0 Similar observations can be made about Northern Ireland.\u00a0 British government support has been key to retaining jobs in Belfast, but for how long?\u00a0 It won’t go unnoticed that the UK’s civilian aircraft industry is now largely owned by a company that, post-Brexit, will be a foreign company.\u00a0Airbus’ commitment to UK production and Research and development (R&D) work was questioned\u00a0after the referendum and the company has made it clear that it wants as frictionless as possible trade with the EU.\u00a0<\/span><\/p>\n

In its recent White Paper, the Government promised a tight integration of its industrial strategy with its trade strategy.\u00a0 Canada wanted to do the same thing with Bombardier: give special support to a company employing lots of skilled workers as a demonstration of the ability of Canada to do more than trade commodities.\u00a0 The UK isn’t Canada but, post-Brexit, it will face the challenges of all smaller, open economies, namely how to reconcile government support for industry with advocacy and acceptance of open international markets.<\/span><\/p>\n

See also:\u00a0Bombardier turns to Europe in turbulent US trade row<\/a>, BBC<\/p>\n

Disclaimer:<\/em><\/p>\n

The opinions expressed in this blog are those of the author alone and do not necessarily represent the opinions of the University of Sussex or UK Trade Policy Observatory.\u00a0<\/em><\/p>\n

Republishing guidelines<\/p>\n

The UK Trade Policy Observatory\u00a0believes in the free flow of information and encourages readers to cite our materials, providing due acknowledgement.\u00a0For online use, this should be a link to he original resource on the our website. We do not however, publish under a Creative Commons\u00a0license. This means you CANNOT republish our articles online or in print for free.<\/p>\n","protected":false},"excerpt":{"rendered":"

Share this article: 17 October 2017 Steve McGuire is Professor of Business and Public Policy and\u00a0Head of the School of Business, Management and Economics at the University of Sussex. He is a Fellow of the UKTPO. Bombardier has found an elegant solution to its trade problems with the United States: sell a controlling stake in the programme to a company with deeper pockets to defend itself – and with a US production base immune, by definition, from US tariffs.<\/p>\n","protected":false},"author":213,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[129970,130195],"tags":[123631,123638,123628,123629,147852,123591,123581,123630],"_links":{"self":[{"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/posts\/1228"}],"collection":[{"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/users\/213"}],"replies":[{"embeddable":true,"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/comments?post=1228"}],"version-history":[{"count":5,"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/posts\/1228\/revisions"}],"predecessor-version":[{"id":1349,"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/posts\/1228\/revisions\/1349"}],"wp:attachment":[{"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/media?parent=1228"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/categories?post=1228"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blogs.sussex.ac.uk\/uktpo\/wp-json\/wp\/v2\/tags?post=1228"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}