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Bombardier (BBD-B.TO) chief executive Eric Martel says U.S. president-elect Donald Trump's proposed tariffs would have an impact on the company's business, but stresses the planemaker has "diversified geographic portfolio."
On the campaign trail, Trump proposed 10 per cent to 20 per cent universal tariffs on imports. Bombardier produces its lineup of private jets at multiple manufacturing facilities, some of which are in the United States. For example, Bombardier's newer Global 8000 jet has key components produced at manufacturing facilities in Saint-Laurent, Que., Red Oak, Texas, and Querétaro in Mexico.
While Martel did not provide specifics in terms of how much of Bombardier's production could potentially be impacted by tariffs, he noted on a conference call with media on Thursday that "a lot of components" in Bombardier jets are produced in the United States.
"When you look at the percentage of our bill of material... from the U.S., it's quite significant," Martel said. For the Global 7500, he says, the engine and wing are produced in the U.S.
"Imposing tariffs would clearly have an impact... on both sides of the border. This is something we would put and take into consideration but I don't want to speculate on any impact today," Martel said.
"Yeah, you have to look at where the aircraft is assembled, but the biggest portion of this value-added on our product, most of the time comes from the U.S. So I guess it depends on how this is going to be looked at."
Martel also points to the company's diversified geographic portfolio serving customers across Europe, Asia-Pacific and the Middle East.
The Montreal-based private jet maker, which reported third-quarter earnings on Thursday, previously found itself locked in a trade war with rival aircraft manufacturer Boeing during Trump's last term in office. The U.S. Department of Commerce hit Bombardier with a nearly 300 per cent tariff in 2017, saying the company received illegal subsidies and dumped its CSeries aircraft into the U.S. market at low prices.
The tariff was eventually overturned by a U.S. court, but the decision came after the company sold a majority stake in the CSeries program to Airbus.
Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.
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