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CSeries will avoid 300% duties with US assembly: executives

Bombardier and Airbus executives confirm that plans to open a CSeries final assembly line in the USA would enable the companies to avoid a potentially disastrous 300% tariff on imports of CS100s.

"When you produce an aircraft in the US, it is not subject to an import duty under US rules," Bombardier chief executive Alain Bellemare says during a conference call with reporters on 16 October. "We are not circumventing anything."

"We think that aircraft produced at Airbus' US facility would not be subject" to the tariff, adds Airbus chief executive Tom Enders.

Enders and Bellemare made their comments about one hour after Airbus and Bombardier jointly announced that Airbus intends to acquire a majority ownership in Bombardier's CSeries, an aircraft beset by delays and, more recently, threatened by sharp US tariffs.

In recent weeks, the US Department of Commerce ruled preliminarily to impose 300% duties on CS100s imported into the USA.

The tariffs came in response to a petition from Boeing in which the US airframer claimed Bombardier received billions of dollars in subsidies and then sold CS100s to Delta Air Lines at a significant loss.

Though the tariffs remain subject to a ruling by the US International Trade Commission, Enders and Bellemare say the companies found a workaround via the planned Airbus acquisition.

Delta did not immediately respond to a request for comment.

Airbus will acquire a 50.01% stake in the CSeries Aircraft Limited Partnership, a joint venture between the government of Quebec and Bombardier, the companies announced today.

Airbus also intends to build a CSeries final assembly plant in Mobile, Alabama, where they will produce CSeries aircraft for US customers. Airbus already has an A320 assembly site in Mobile.

Enders declines to specify a firm timeline for establishing the Mobile CSeries line, but says Airbus intends to move quickly.

"We need to go through various approvals in the coming months… it's not like we can jump right into the joint venture," he says. "But, we have a lot of experience setting up a final assembly line in Mobile. It can be done in a relatively short time."

The companies say they will maintain the final assembly line in Canada, and Bellemare insists the programme's Canadian workforce will not shrink as a result of Airbus' investment and the US assembly line.

Bombardier will "sustain employment" in the short term, and grow employment in Canada, even beyond previously-expected levels, thanks to support from Airbus, says Bellemare.

He expects support from Airbus will help Bombardier secure additional customers, particularly those in the USA.

"We are highly confident we will be able to secure more orders under the Airbus umbrella," he says.

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