A Quebec Superior Court judge says engine supplier Honeywell International Inc. must negotiate with Bombardier Inc. on the cost of the engines it manufacturers for the Montreal-based plane maker. A Bombardier Challenger 3500 aircraft is shown under construction at Bombardier's Challenger manufacturing plant in Montreal, Wednesday, April 5, 2023. THE CANADIAN PRESS/Graham Hughes
MONTREAL – A Quebec Superior Court judge says 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.
The decision from last month states that the U.S. manufacturer has an obligation to hold talks in good faith with Bombardier to try to reduce the price of the propulsion systems installed in its Challenger business jets.
The ruling also requires Honeywell to hand over a sheaf of sales records to an independent auditor to assess whether the company sold turbofan engines at a lower price to competitors.
Bombardier has argued that Honeywell hiked the price of engines despite a contractual obligation to lower it over time, while Honeywell has said it has not sold the same engine to competitors and denied Bombardier’s right to an audit.
The decision notes that starting in the 1990s the North Carolina-based aerospace giant began to design and manufacture an engine exclusively for Bombardier, but later began supplying similar systems to Bombardier rivals Gulfstream Aerospace Corp., Embraer S.A. and Textron Inc.
Bombardier is seeking $447 million in damages from Honeywell over claims it overpaid between 2012 and 2017. The court not handed down a ruling on damages.
This report by The Canadian Press was first published Jan. 19, 2024.
Companies in this story: (TSX:BBD.B)
