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Multi-billion dollar race

Reuters
Tuesday, February 06, 2018

OTTAWA - Boeing Co must decide by the end of this week whether to take part in a multi-billion-dollar race to supply Canada with fighter jets, even as the US company's relationship with Ottawa has soured due to a trade dispute.

Although a US trade commission on Jan. 26 dismissed Boeing's complaint that Canadian plane maker Bombardier was dumping airliners on the American market, it is far from certain the ruling will be enough to placate Canada.

That could well influence the company's decision on bidding on a contract for 88 jets worth between C$15 billion ($F24.431b) and C$19b ($F30.946b), people familiar with the matter said.

Boeing chief executive Dennis Muilenburg said in a post earnings call last week the company will wait to see the commission's reasoning, coming later this month, "to make decisions on our path forward."

The company declined to comment further.

Boeing has until February 9 to express an interest in taking part in the Canadian jet competition, failing which it will be excluded from the bidding process.

At stake could be billions of dollars of defence procurement orders at a time when Canada is ramping up military spending over the next decade. Boeing says it supports some 17,000 jobs in Canada.

The dispute also has weighed on the crucial NAFTA modernisation talks, which have dragged on for months.

Although government officials say the competition will be open, they have privately made it clear that Boeing needs to drop the Bombardier challenge and talk of an appeal to stand a better chance of winning the jet contract, say sources familiar with the matter.

"A lot of things would be better if they did that," said one source who declined to be identified given the sensitivity of the situation.








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