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Dismayed Britain chides Boeing over Bombardier ruling

[September 27, 2017] By Estelle Shirbon and Guy Faulconbridge

LONDON (Reuters) - Britain is bitterly disappointed by a U.S. decision to slap duties on a Boeing competitor's jets, Prime Minister Theresa May said on Wednesday, promising to fight for thousands of jobs in Northern Ireland that the ruling puts at risk.

The consequence of a dispute between the U.S. planemaker and its smaller Canadian rival Bombardier <BBDb.TO>, the ruling is a political headache for May, whose minority Conservative government relies on support from a Northern Irish party to stay in power.

The dispute also undermines the British government's assurances that free trade and London's close ties with Washington will be pillars of Britain's prosperity and global influence after it leaves the European Union in 2019.

"Bitterly disappointed by initial Bombardier ruling," May said on Twitter. "The government will continue to work with the company to protect vital jobs for Northern Ireland."

The penalty, which threatens 4,200 jobs at a Bombardier plant in the UK province that makes parts for its new CSeries 110-to-130 seat jets, will only take effect if the U.S. International Trade Commission (ITC) rules in Boeing's favor.

That final decision is expected early in 2018.

Boeing accuses Canada of unfairly subsidizing Bombardier, which Ottawa and Bombardier deny.

May had personally asked U.S. President Donald Trump to help find a solution to the dispute, but the U.S. Commerce Department on Tuesday imposed a 219.63-percent duty on the CSeries jets.

Bombardier is the largest manufacturing employer in Northern Ireland, which is the poorest of the United Kingdom's four parts and is mired in political difficulties after emerging from decades of armed sectarian conflict.

Given the importance of the province's Democratic Unionist Party (DUP) to May's own position as prime minister, mass job losses at the Belfast factory would be particularly sensitive.

The setback has come at a bad time for May, who was severely weakened by her party's poor showing in an election in June and who has been struggling to contain infighting within her top team over Brexit.

The British government said Boeing's stance was unjustified and not the sort of position it would expect of a long-term partner.

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A model of Bombardier C Series aeroplane is seen in the Bombardier offices in Belfast, Northern Ireland September 26, 2017. REUTERS/Clodagh Kilcoyne

"SABRE-RATTLING"

Arlene Foster, the DUP leader, quickly signaled she would put pressure on May to act.

"Everyone realizes how important Bombardier is to Northern Ireland and we will use our influence with our government to make sure that continues," she said on Sky News.

"What we must do now is to continue to work with our own government, with the American government, with the Canadian government, in trying to get Boeing to see sense."

However, London's options in fighting Bombardier's corner may be limited.

Boeing says it employs 2,200 people in the United Kingdom, its third largest supply base after the United States and Japan.

Britain recently ordered the Boeing P-8 maritime surveillance plane and a new fleet of Apache attack helicopters made by the U.S. giant. Its armed forces have deployed Chinook helicopters, the C-17 transport plane and the E-3 Sentry airborne early warning and command post.

British defense analyst Howard Wheeldon said it was unlikely that Britain would pursue any reprisals against Boeing.

"I think there is a lot of saber-rattling, but in practical terms it is not on," he said when asked whether Britain could cancel or reduce Boeing defense orders.

"They can play politics, but can't actually walk away from what they need and have committed to buying from Boeing."

The row comes weeks after Boeing began construction of its first European parts manufacturing site in Sheffield, northern England.

(Additional reporting by Kate Holton, Michael Holden and Tim Hepher; editing by John Stonestreet)

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