Bombardier Aerospace has warned that its C Series aircraft programme is "critical to the long term future" of its Northern Ireland operations as fears escalate that an acrimonious row with rival Boeing over government subsidies could jeopardise jobs in the North.
The UK prime minister Theresa May has personally intervened to call US president Donald Trump to highlight how investment and jobs in Northern Ireland could be impacted as a result of allegations made by Boeing about the sale price of Bombardier's C Series aircraft in the US.
Bombardier s Northern Ireland operations, which employ approximately 4,500 people, produces the wings for the C Series aircraft.
The wings production line is vitally important for Bombardier’s Northern Ireland operations which have suffered a series of major redundancies as part of Bombardier’s global restructuring programme.
The Canadian group has axed around 20 per cent of its workforce – 1,080 jobs in the North in recent years.
Jobs
Bombardier had previously said that it hoped the C-Series could generate more than 800 jobs for Northern Ireland once the aircraft programme went into peak production.
But the C Series aircraft, with its Belfast-designed and produced wings, was plagued with budget over-runs and delays before its launch.
Now there are growing concerns that a United States Department of Commerce investigation could potentially divert the CSeries aircraft programme again in Belfast.
The US department is investigating allegations made by Boeing that Bombardier is selling its C Series aircraft in the US with a price tag that is lower than the cost of production of the planes.
Boeing claims “substantial government subsidies have enabled Bombardier’s predatory pricing of the C Series which competes directly with American made 737-700and 737 Max 7 airplanes.
“The C Series has received extensive government support totalling more than $3 billion so far”.
Boeing said the government of Canada, Quebec and the UK government were among Bombardier’s chief supporters.
There is no doubt that Bombardier has received significant international government support for the C Series which it asserts is entirely above board and lawful.
Bailout
Last year Bombardier got a $1 billion bailout from the Quebec Government specifically for its C-Series aircraft programme.
The aerospace group has also previously received up to $1 billion in financial support from Ottawa, Quebec and the UK - including £52 million from the UK to develop the C Series.
Between 2002 and 2015 Invest Northern Ireland also offered £75million of financial assistance to Bombardier, including £21 million for the C Series.
Invest NI said it intends to continue to work closely with Bombardier to “defend” the interests of the Northern Ireland economy.
The agency added: “Invest NI encourages Boeing to withdraw its petition. We are co-operating with the UK Government’s response to the US commerce department’s investigation”. the interests of the Northern Ireland economy.”
Boeing’s key allegations mainly revolve around an order that Bombardier won from Delta for 125 C Series aircraft.
Boeing claims that Bombardier agreed to sell the C Series aircraft for around $20 million to Delta Airlines but it alleges that the planes cost in the region of $33 million to produce.
Based on Boeings allegations the US Department of Commerce is investigating if the US industry is “threatened with material injury by reason of imports of 100-150 large civil aircraft from Canada that are allegedly subsidised and sold in the US at less than fair value”.
The department is expected to publish its preliminary findings on September 25 and its “antidumping duty” ruling on October 4.
Investment
But union leaders in Northern Ireland said if the US Department of Commerce rules in favour of Boeing’s allegations the consequences for Bombardier’s Belfast facility could be disastrous.
Davy Thompson, Unite regional coordinating officer said: “At present one thousand workers, or about 25 percent, are employed on C Series production here but in four years’ time that number is expected to rise to 60 per cent of jobs onsite.
“Bombardier is the largest private sector employer in Northern Ireland; these jobs are vital to our economy and sustain many times more in the wider supply chain in the UK and Ireland.”
He said while Bombardier may have benefitted from state investment by the UK and Canada it was “entirely lawful” and he is appealing to the UK to use its influence to end what he has described as “corporate bullying” by Boeing.
“The UK government is the second largest purchaser of Boeing products. These present ample leverage to end this damaging course of action,” Mr Thompson added.
A UK government spokesman has said it was “working tirelessly to safeguard Bombardier’s operations and its highly skilled workers in Belfast.”
The spokesman also confirmed that the UK’s business secretary Greg Clark met with Boeing’s chairman in Chicago Dennis Muilenburg to discuss the issues.
Bombardier has stressed that it strongly disagrees with the allegations made by Boeing.
But it has also emphasised how important the C Series aircraft programme is to Northern Ireland.
In a statement the group said: “We are responding to the petition proceedings, and will not speculate on the impact on our Belfast site should the Boeing petition be successful.
‘However, as Bombardier Belfast is responsible for the design, manufacture and assembly of the advanced composite wings for the C Series aircraft, the C Series programme is critical to the long-term future of our Northern Ireland operations.’
Bombardier: the NI operation
Bombardier’s Northern Ireland operations are intrinsically linked to the C Series family of aircraft because it represents the future for the east Belfast site which has been involved in aircraft manufacturing for more than 81 years.
When Bombardier first unveiled the role Belfast would play in its new C Series aircraft back in 2008 at the Farnborough Air Show it pledged to invest £520 million in the North - the largest single investment made by a company in Northern Ireland, it was an important vote of confidence in its Northern Ireland operations.
Bombardier invested in a new 600,000-square-foot facility to support the design, manufacture and assembly of the C Series aircraft wings in Belfast.
The wings are manufactured using a pioneering carbon-fibre composite which was developed by engineers in the North.
One of the reasons, according to Bombardier, why this is genuine ground breaking technology is because it enables both material and aircraft weight savings.
This not only helps to reduce manufacturing cycle times but also helps to reduces fuel burn which is all important factor for commercial airlines.
Bombardier has had unwavering belief in the C Series aircraft programme and its Belfast workforce despite facing a number of headwinds in its development of the aircraft since 2008.
It has frequently highlighted how Belfast’s advanced composites process have helped transformed the way aircraft wings are now manufactured.
According to Bombardier the composite wings not only bring weight reduction benefits but they also require less inspection and maintenance activities for airlines.
There are currently 1,000 people – 25 per cent of the work force – involved in the CSeries production in Belfast but in four years time that could ramp up to 60 per cent of the workforce if the CSeries aircraft sales take off.
But Boeing’s accusations that Bombardier is “dumping” (ie: selling below cost) the C Series in the US market could effectively ground Belfast’s hopes for job security in the future.
Bombardier has said that it views Boeing’s accusations as a “direct attack on innovation, competition, development and jobs”.
For Bombardier’s Belfast workers it might just also turn out to be an attack on their livelihoods if the US Department of Commerce decides to side with Boeing and impose fines or tariffs on Bombardier.
