Picture: ISTOCK
Picture: ISTOCK

London — Boeing is the "king of corporate welfare", the UK’s main opposition Labour Party said on Wednesday, accusing the US aerospace company of "egregious hypocrisy" in pursuing an illegal-subsidies claim against Bombardier that threatens thousands of jobs in Northern Ireland.

The US slapped 300% of duties on Bombardier’s C Series aircraft after upholding Boeing’s contention that the Canadian company benefited from state support, allowing it to sell the model more cheaply.

Labour’s trade spokesman, Barry Gardiner, said on Wednesday that "no aircraft these days comes to market without support from government", including those produced by Boeing.

"Boeing has absolutely been sucking at the milk of corporate welfare in America for far too long," Gardiner said on Bloomberg TV.

"They need to understand that the way in which they are playing, this does not sit well with UK parliamentarians."

The dispute has caused a headache for UK Prime Minister Theresa May, who wants to strike a trade deal with the US as Britain leaves the EU. At the same time, she needs to protect more than 4,000 Bombardier jobs in Northern Ireland, where she depends on the support of 10 MPs from the Democratic Unionist Party to get legislation through parliament.

Hostile tactic

Gardiner did not mince his words on Boeing, suggesting that the company was itself a "subsidy junkie" and accusing it of bringing the Bombardier case to "crush a competitor" and get hold of "superior technology" — including wings that are made in Belfast — by driving down its share price "so that they can try to do a hostile takeover".

A spokesman for Boeing in the UK said the US action is about conforming with trade law and that "Boeing complies".

He declined to comment on whether the company was trying to hurt Montreal-based Bombardier’s share price in preparation for a takeover attempt.

Gardiner also said he planned to ask European authorities to investigate whether there is an anti-dumping case to be made against Boeing over its contract to sell 30 of the latest 737 Max 8 jetliners to Monarch Airlines, which filed for insolvency earlier this month.

The $3.1bn order, originally placed in 2014, was last year restructured as a sale and leaseback, in which planes are typically purchased from a carrier and then rented back. The nature of the deal, which paved the way for Monarch owner Greybull Capital to make a £165m ($220m) capital injection, suggests Boeing sold the 737s "at less than cost price into the European market", Gardiner said.

Boeing said it did not publicly comment on the financial arrangements of its customers.

Media campaign

The defence and aerospace giant is under pressure in the UK after May, Defence Secretary Michael Fallon and Business Secretary Greg Clark all said it was putting at risk chances of winning future contracts from Britain.

The Chicago-based company on Tuesday took out a wraparound advert in London’s Evening Standard newspaper featuring a picture of a Chinook helicopter hovering over Stonehenge, and has also erected a giant billboard in Westminster subway station, which many MPs pass through on their way into the Houses of Parliament.

"We are absolutely coming at Boeing," Gardiner said. "All the advertisements, all the front covers of the evening newspapers in London that they’ve put on are not persuading anybody other than that they’re playing dirty."

Bloomberg

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