The radiating mischief of protectionism

Boeing, America’s 39th largest corporation by market capitalization (over $150 billion) and 24th by revenue ($94.6 billion) complains that it is being injured because the Canadian aircraft manufacturer Bombardier (market capitalization around $5 billion) was “dumping” its C Series passenger planes in the U.S. market. That is, selling them unfairly cheaply to U.S. buyers. The nature of Boeing’s injury is unclear because it does not make a plane that directly competes with the C Series. Boeing’s complaint came after Bombardier agreed to sell 75 planes to Delta Airlines for $5.6 billion, a contract for which Boeing did not bid. The C Series single-aisle planes, which seat 100 to 160 passengers, are smaller than Boeing’s 737.

All manufacturers of commercial aircraft, including Boeing, sell their products for amounts substantially below list prices. (Boeing’s 787 lost $29 billion over five years before becoming profitable last year.) Boeing, however, cheekily charges that Bombardier is able to be excessively nice to U.S purchasers because the C Series receives government subsidies, including equity investments, worth under $2.8 billion. This is, however, the Boeing pot calling the Bombardier kettle black.