Bombardier Inc. is escalating the war of words in a dispute about the financing of sales of its new C Series jet, alleging that Boeing and Airbus and their respective national export agencies are threatening to use anti-competitive practices to harm sales of the plane.
"Bombardier believes there should be a level playing field with respect to financing policy," Bombardier spokesman Marc Duchesne said yesterday.
Mr. Duchesne confirmed that Bombardier president and chief executive officer Pierre Beaudoin last week expressed concern over the so-called "gentlemen's agreement" between Boeing Co. of Chicago and European consortium Airbus SAS of Europe.
Under terms of the informal pact, the Export-Import Bank of the United States refrains from providing a backstop to the financing of sales of Boeing aircraft to European customers. European export credit institutions, in turn, hold back from providing guarantees to financing of Airbus sales to U.S. buyers.
Mr. Beaudoin said sales of the C Series - a 110- to 130-seat jetliner - could be harmed if Montreal's Bombardier had to bend to this so-called "home market rule" and not be allowed to resort to Export Development Canada for financial guarantees to U.S. and European buyers of the C Series aircraft.
The rule would also apply to other new entrants from Brazil, Russia, Japan and China, who will be going up against Airbus and Boeing with their own mid-size aircraft.
The issue is being discussed at OECD talks now taking place in Paris and aimed at finding a compromise agreement on global export financing of jetliners.
Ottawa has also run into opposition from the U.S. and European Union at the Organization for Economic Co-operation and Development over its plans to provide export financing to foreign buyers of the C Series under terms that put the jet in a smaller plane category.
The U.S. and EU, backed by Boeing and Airbus, have been challenging Canada's proposal that the C Series be classified as a smaller plane that would make it eligible in some cases for better export credit financing terms under a 2007 OECD agreement.
The talks are trying to strike a deal that would impose a new set of rules in which there is no longer a distinction made between larger and smaller planes. A spokeswoman at the Department of Finance in Ottawa said yesterday that no comment will be made on the issue of home market rule at this time. Last week, the department said in a statement that OECD member countries have agreed to revisit the issue of having two sets of financing conditions for large and regional aircraft.
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