Honeywell must negotiate with Bombardier

Engine supplier Honeywell International Inc. must negotiate with Bombardier Inc. on the cost of the jet engines it rolls out for the Montreal-based plane maker, a Quebec Superior Court judge has ruled. This decision marks the latest development in an eight-year dispute between the partners. The judge found that Honeywell has an obligation to negotiate in good faith with Bombardier with the goal of reducing the price tag on propulsion systems installed in its Challenger business jets.

The ruling also requires the U.S. manufacturer to hand over a sheaf of sales records to an independent auditor, who will assess whether the company sold turbofan engines to rivals at lower rates, which the contract with Bombardier prohibits.

Honeywell has filed a motion to appeal the decision, a move Bombardier is contesting.
Bombardier first sued Honeywell in 2016, soon after competitors began looking to get in on the market for a long-range “super mid-size” business jet that Bombardier had carved out.

“With the arrival of competitors Bombardier’s relationship with Honeywell became strained,” Justice David Collier wrote. “Bombardier’s market share for super mid-size jets fell as competitors entered the market, while Honeywell became the sole engine manufacturer for all four competing OEMs.”

Bombardier is seeking $447 million in damages from Honeywell over claims it overpaid between 2012 and 2017. It is also seeking to slash the price in future years. The court has not handed down a ruling on damages.