Boeing > Bombardier

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Re: Boeing > Bombardier

Postby Kane » Mon Oct 16, 2017 11:25 pm

And now Trump can say he brought jobs to ‘bama.
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Re: Boeing > Bombardier

Postby exploited » Mon Oct 16, 2017 11:26 pm

It'll work for his supporters, but everybody else realizes Boeing just got f**k hard. This market is essentially closed to them now, as there is no way they can get something together before the CSeries becomes dominant.
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Re: Boeing > Bombardier

Postby Kane » Mon Oct 16, 2017 11:39 pm

f**k ‘em. They lacked the foresight and we subsidize their asses enough. Imagine if they hadn’t done this? Maybe their number one competitor wouldn’t then own this series and a competitor could’ve been allowed to grow up North which could also challenge your rival?

They deserved this.
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Re: Boeing > Bombardier

Postby Saz » Tue Oct 17, 2017 4:25 am

exploited wrote::))

Airbus just bought 50.01% the CSeries line, and will assemble them in Alabama, thus eliminating the tariffs.

Brilliant deal. They are going to grab the entire market for this size of aircraft.


Not sure what you are talking about, Bombardier got f**k destroyed here. They will grab HALF the market for an airline of those size, Airbus now has majority stake even though Bombardier built the whole plane, and production is now partially shifted out of the Canadian province bombardier was subsidizing and into the US (particularly when you look at the trade rules which generally prevent this kind of circumvention...expect 50%+ of inputs to be required to come from US). Trump punked them, Airbus got a decent asset and Bombardier just lost it's flagship simply because it comes from a country that got pushed around by the US.

This was never a market Boeing was competing in. Boeing won, they essentially got away with their bully tactic. It was never about keeping the C series out of the US, again Boeing doesn't even make a plane and isn't developing a plane for this market. It was about setting a precedent, which they did, and punishing a potential interloper into the nice little duopoly they have with airbus, which they did. Now in the long term this might be a loss for Boeing, as they have driven a decent asset right into the arms of their only serious competitor. Boeing doesn't compete in this market but with Airbus backing, the plane could be transformed into a serious competitor for the 737. Ultimately it's devastating for Canada, it's shown they simply can't compete. However in the Long run, driving the Canadians into the Airbus conglomerate can only pose long term issues for Boeing...but it's not clear if this will pose a bigger issue than having a 3rd competitor. I think Boeing still comes off as the winner here given the precedent they were able to set. It's not something they can leverage aginst their two biggest rivals in Europe and China, given their market size, but it's a tool that can be used to effectively protect their home turf from third party competitors (particularly from Brazil and Russia).

Bombardier is suffering. This was their flagship into the market and is by all accounts a decent plane, which is now an airbus plane. Combine this with their utter failure to sell off their train business to Siemens and the writing on the wall is clear. An industrial conglomerate will struggle to survive when their home market is as small as Canada's. Not only is the domestic market not large enough to support the business, but they can easily be pushed around by larger trade blocks in terms of tariffs and subsidies.
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Re: Boeing > Bombardier

Postby Saz » Tue Oct 17, 2017 4:57 am

exploited wrote:It'll work for his supporters, but everybody else realizes Boeing just got f**k hard. This market is essentially closed to them now, as there is no way they can get something together before the CSeries becomes dominant.


Boeing was never in this market. The threat from the C series is that they could scale it up to compete with the 737. Boeing has no interest in making planes the size of the C series, the issue is that if Bombardier made a bigger plane, it would compete with the 737 which already loses out to Airbus 320/330. They did not want a third competitor in the 737 market and now they don't have one. Airbus will end up buying the C series out completely and Bombardier will have essentially no viable aircraft...which get's Boeing right back to the status quo - one serious competitor in the single aisle market instead of two.

You have no clue how the market for these aircraft work. One company inevitable makes a better plane but that will be limited by production capacity. The other company get's the rest of the market by default. For 727 size aircraft, Airbus has the better plane, but boeing collects the rest by default. If bombardier got off the ground with the C series, then come 2023/2024, when a new 737 and A320 are expected, boeing would need to create 737 better than the new A320 AND whatever Bombardier engineers, and if it doesnt, then it will have to compete for the remainder of the market. Boeing got what they wanted here, come 2023/2024, there will be no Bombardier competitor to the 737, and boeing will only need to beat the new A320 to to claim top of the market, and if they don't they still get the rest by default.

Now claiming the C series gives Airbus a nice head start and advantage in terms of creating the better A320/737 come 2023/2024, but this is already a market where boeing is second to airbus. If they lose again it just keeps the status quo, which they are fine with.It's about protecting the duopoly and the home market, not about selling 100 planes or petty shit like that.
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Re: Boeing > Bombardier

Postby exploited » Tue Oct 17, 2017 8:13 am

Not sure what these posts are in response too. You quote me twice but then proceed to talk about points never made.
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Re: Boeing > Bombardier

Postby Kane » Tue Oct 17, 2017 9:04 am

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

They took their eye off the ball.

And Airbus won.

https://www.bloomberg.com/quote/AIR:FP
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Re: Boeing > Bombardier

Postby Saz » Tue Oct 17, 2017 9:17 am

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.
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Re: Boeing > Bombardier

Postby Kane » Tue Oct 17, 2017 9:21 am

Agree.
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Re: Boeing > Bombardier

Postby Saz » Tue Oct 17, 2017 9:31 am

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.
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