After winning Trump’s ear, Boeing achieves trade victory

Bloomberg

Boeing Co. is making the best of its unlikely rapport with President Donald Trump.
The planemaker’s latest victory came when the Trump administration slapped far larger duties on a competing Bombardier Inc. jet than Boeing had requested in a trade spat with its Canadian rival. There’s also been good news for the company’s defense division as the Pentagon acquired the next Air Force One fleet last month and named Boeing a finalist for a $62 billion missile-defense system.
It might have been hard to imagine that Boeing would enjoy such good fortune back on December 6, when President-elect Trump scolded the company in a Twitter broadside for “out of control” costs on the presidential plane. But the attack provided a path for Chief Executive Officer Dennis Muilenburg to establish a rare, direct channel with the commander-in-chief that continues to benefit the largest US exporter as it navigates a fiercely competitive market.
“It ended up opening up some communication lines,” Muilenburg recalled at a forum in Washington. “We took that seriously.”
It’s an example of how Boeing, under Muilenburg’s leadership, hasn’t hesitated to embrace unconventional tactics in its dealings with competitors, suppliers, customers —and even a US president. While there’s always the chance that the strategy could backfire, the approach has largely been successful. The Chicago-based company has been the best performer on the Dow Jones Industrial Average this year, with shares up 63 percent.
Boeing has stood out from other US companies in the way it has dealt with Trump. After the uproar over the president’s comments about protesters in Charlottesville, Virginia, CEOs from Merck & Co., Under Armour Inc. and other companies spoke out or resigned from Trump’s corporate advisory panels.
Both Boeing and Muilenburg made no comment.
The trade spat has thwarted the US expansion of Bombardier’s C Series, a technologically advanced aircraft that over the longer term poses a threat to the 737 jetliner, Boeing’s largest source of profit. While the case winds through a review process, no US carrier is likely to risk duties similar to the estimated penalty of about $3.4 billion assessed for the 75 Bombardier jets ordered last year by Delta Air Lines Inc., said aerospace analyst Seth Seifman of JPMorgan Chase & Co.
Other countries have protested Boeing’s strong stance. UK Prime Minister Theresa May lashed out at the planemaker after the U.S. import duties were announced this week. Her Canadian counterpart, Justin Trudeau, has threatened to scrap a multibillion fighter-jet deal.