DN - Defence Notes

Boeing dismisses accusations of fallout with UK

23rd October 2017 - 03:10 GMT | by Tim Martin in London

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US aerospace giant Boeing has reaffirmed its commitment to the UK, despite souring relations with the UK government following the US Department of Commerce’s decision to place a preliminary 219% trade tariff on Bombardier.

Centered on Bombardier’s 2016 deal with Delta Air Lines, Boeing’s complaint alleged such a deal was improper and made possible by virtue of Canadian government subsidies.

Since the original ruling last month, the UK government has criticised Boeing for its role in the affair, holding the company accountable for instigating proceedings in order to push construction costs of C-series aircraft to $61 million per aircraft, a figure three times higher than Delta received them for.

Adding to the UK government's opposition is the fact that 1,000 jobs at Bombardier’s Belfast base would be jeopardised in the event that the tariff was imposed long-term.

Speaking at the end of September, Defence Secretary Michael Fallon said that while Boeing stood to gain from future UK defence spending, 'this kind of behaviour could jeopardise our future relationship' with the firm.

'We don't want to do that. Boeing is an important investor in the United Kingdom; an important employer in the United Kingdom,' Fallon said on a visit to Belfast.

'But we would prefer this kind of dispute to be settled on a negotiated basis and we will be redoubling our efforts with the Canadian government to bring about a negotiated settlement.'

Raising the stakes higher, Liberal Democrat leader, Vince Cable MP went beyond chastising Boeing by suggesting the government should stop US firms from taking on multimillion pound military helicopter contracts and instead have them built in the UK.

However, speaking to Shephard, a Boeing spokesperson sought to downplay any tension between the two parties. 

‘We maintain an open and constructive dialogue with the UK government on both defence business and commercial issues, including our growing partnership with the UK supply chain,' the spokesperson insisted.

Only last year the UK completed a $2.9 billion deal for the manufacturer to deliver 50 Boeing AH-64E Apache attack helicopters to bolster UK defence capabilities.

Among other key financial figures to support the evidence that Boeing may require appeasement rather than a cold shoulder is the amount of money they spent with UK suppliers in 2016 – £2.1 billion.

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