Boeing > Bombardier

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Re: Boeing > Bombardier

Postby Saz » Tue Oct 17, 2017 9:41 am

And this is lesson 101 in why duopolies are terrible for capitalism. Bombardier did build a decent product and if given a fair shake probably could build more excellent aircraft that could compete across much larger markets. But one player in the duopoly leveled them with a political tariff, and the other just swallowed their prized asset. Back to two players. This is why it's not a loss for Boeing, yes they compete with airbus but they don't really compete. Both are perfectly happy and profitable given the status quo and neither would know what to do without the other (as they absorb production slack and obscure the fact the industry is not competitive at all). Both get to be national champions and de facto monopolies without getting shit for it because there is always the "threat" of the other guy. Don't buy into it, we would have much better planes and the global airline industry would be much better off if we had multiple producers who actually had to compete for every market...rather than two producers who can barley produce their current order books and have no real incentive to push to hard and change the status quo. This is capitalism in 2017, just about every industry is consolidating it's way to this perfectly mediocre equilibrium, aided by governments of course.
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Re: Boeing > Bombardier

Postby Saz » Tue Oct 17, 2017 9:46 am

And I know you think I'm just being a dick to exploited but this really is a hard lesson in how much mid tier countries like Canada are going to struggle in the world moving forward. The truth is Bombardier never stood a chance because they are Canadian. As demonstrated, powerful government like the US and the EU will go to the wall for their national champions, and will break competitors from smaller nations and there isn't a damn thing they can do about it. When a third entrant to the market does come, it will come from China, precisely because the US and the EU cannot pull these sort of stunts with a Chinese producer due to the threat of retaliation by the Chinese government.
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Re: Boeing > Bombardier

Postby Kane » Tue Oct 17, 2017 9:54 am

Saz wrote:
Kane wrote:Bombardier has been in dire straits for a while though. Boeing thought they could kick them while they were down...and I do think that's backfired on them via Airbus.

But they did kick them while they were down. The goal here was to torpedo Bombardier, NOT the C series. Again, Boeing does not make a competitor to the C Series, so it was never going to compete for those orders in the first place. The goal here wasn't to get the plane out of the market...the only buyer is for a 100 orders, Boing and Airbus have backlogs in the thousands for much larger aircraft. Boeing wanted to f**k Bombardier out of their home market, and hopefully f**k them out of the Industry entirely. They seem to have accomplished that.

Airbus now has a product to offer in the US while building them in the US for the domestic market. And why would Airbus agree to that? It's definitely to challenge the 737.

Airbus doesn't make planes in this market either. It's a good asset, but Boeing severely impaired it by getting the tariff set against it. This allowed Airbus to get it at a firesale price (boeing would have done the same had they not pissed off the seller). The C series will not challenge the 737, different market. But yes, the development put into the C series could be applied to a competitor to the 737. The Issue is Airbus already dominates in the 737 market and they are limited by production capacity. So they can't really do much better in that market given the constraints of the duopoly. May help them protect the market going forward, as it will be more difficult or expensive for Boeing to develop a new 737 that can compete with the Airbus offerings...but that's a small price to pay to cripple a potential 3rd player in the Industry.

Airbus is playing the long game while Boeing makes stupid moves on already strained competitors.

They took their eye off the ball.

And Airbus won.


Disagree. Everyone played their hand about as well as they could have here. You ignore the consequences of Boeing doing nothing. Bombardier would then have a foot in the US market, and would be well on the way to being able to develop larger planes that would compete with Boeing. They needed to kill that in it's cradle and they have. I don't think anyone at Boeing is surprised by this in the least, they severely crippled an otherwise excellent asset, it was only a matter of time until the asset was so impaired that airbus would throw in an offer. You could argue Boeing should have gone for the buyout first but the price would have been much higher, Bombardier would not be in a forced sale position, and while they would claim the relatively small C series market, there is no guarantee that they would be able build a better 737 (or at least one that can compete with airbus) out of the platform.

Airbus did win but if Boeing did nothing they could end up losing BIGLY by allowing a third player in the market. Boeing didn't lose though, this only makes airbus stronger in a market they already dominate, Boeing will still collect a decent share by default.


Fair enough, you seem to have a firmer grasp on this than I do. It's pretty f**k up though. Bombardier never stood a chance.
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Re: Boeing > Bombardier

Postby exploited » Tue Oct 17, 2017 11:13 am

Saz wrote:
exploited wrote:Not sure what these posts are in response too. You quote me twice but then proceed to talk about points never made.


Boeing did not get f**k hard, Bombardier did. Boeing didn't win though, Airbus did.

The deal is only "Brilliant" for Airbus and Trump.


Oh, Boeing got f**k hard. Airbus is gonna push up on their shit from above and below, and now Bombardier has Airbus logistics, resources, sales and marketing. What was a minor push into that market is now a major push. A company that could never compete will now be able to compete. Watch for Boeing to link up with the Brazilians.

Bombardier was always f**k. It has never been competitive. This isn't a win, but it is a brilliant deal. Not sure how you extrapolated the idea that I view Bombardier selling off 50% of their major product line as a win.
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Re: Boeing > Bombardier

Postby Saz » Tue Oct 17, 2017 11:33 am

exploited wrote:Oh, Boeing got f**k hard. Airbus is gonna push up on their shit from above and below, and now Bombardier has Airbus logistics, resources, sales and marketing. What was a minor push into that market is now a major push. A company that could never compete will now be able to compete. Watch for Boeing to link up with the Brazilians.


You have no idea what you are talking about. Airbus has already come out saying the plan is to buy out the rest of the stake. In any case, they already own a majority stake. This isn't Bombardiers asset anymore, it belongs to Airbus. This isn't a company gaining competitiveness, this is a company who made a good product getting laid low by one competitor, only for another to come in and steal their prized asset at a rock bottom price.

Again, Boeing wasn't trying to keep this plane out of the market, they don't care, they don't compete in this market and as far as single asiles go airbus is well ahead anyway. people only buy boeing in this range because they can ship quicker and the parts are more interchangable with other boeing aircraft. Boing was trying to stop Bombardier from getting on it's feet and potentially building other aircraft which they have to compete with, and Boeing has done that. Boeing will never do shit with Embraer either, unless they do something similar and literally buy the good assets from the company to keep them out of the Industry, as Airbus has just done with Bombardier. No one is making planes the size of Boeing and Airbus markets, and the next will come from china but even that will be non-competitive on the global market and will be sustained soley by domestic sales.

There is also no distinction between the minor/major push into the market, the C series is the only aircraft in this market, and neither Airbus or Boeing have a competitor because frankly the market really isn't big enough to bother. There can be no major push into the market because C series already has orders from everyone who wants to buy in this market, IE only delta. Airbus bought this asset to essentially capture the lowest end of the market, and then strip down and incorporate the good parts into the next gen A320.

Bombardier was always f**k. It has never been competitive. This isn't a win, but it is a brilliant deal. Not sure how you extrapolated the idea that I view Bombardier selling off 50% of their major product line as a win.
It's only a brilliant deal for Airbus. Even then, it's not a master stroke or anything clever, it's just the case of a good asset falling in price until it was worth buying. Again, everyone at boeing expected this once the actual tariff rates were announced. Either Bombardier takes a big fat zero or they sell, and they aren't going to sell to Boeing which leaves really on one option. There is literally nothing surprising about this entire saga except the willingness of the commerce department to impose such a punitive tariff for such a silly claim...and even that makes sense given Trump and they DID move production to America.
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Re: Boeing > Bombardier

Postby Saz » Tue Oct 17, 2017 11:35 am

Kane wrote:Fair enough, you seem to have a firmer grasp on this than I do. It's pretty f**k up though. Bombardier never stood a chance.


I love planes. But yes it is quite f**k up and not good for capitalism. This is why foreigners get pissed when the US says other countries don't play fair. They don't, but neither do we. All is fair in love and war and trade. The fact is a company like Bombardier cannot survive because the canadian domestic market isn't big enough to support them and the Canadian government doesn't have the political clout to push back on unfair practices like this. Boring/Airbus and the US/EU do.
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