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?Photo of Challenger 350 from BombardierBombardier has won a case against Honeywell after an eight-year-long dispute. A Quebec Superior Court Judge ruled that Honeywell is obligated to negotiate with Bombardier with the end goal of reducing the price of propulsion systems used in Challenger series jets.
The Canadian Press reported that the decision, handed down last month, has ended the eight-year-long dispute between the two companies. A judge ruled that U.S. manufacturer Honeywell must negotiate in good faith to reduce the price of its propulsion systems used on the Challenger bizjets. With the ruling, Honeywell is required to hand over sales records to an independent auditor to assess whether the company sold turbofan engines to rivals at lower rates, going against the contract with Bombardier. The Canadian Press reported that Honeywell has since filed a motion to appeal the decision and Bombardier is contesting.
The Claims Journal, reporting on a story from Bloomberg, said Bombardier is seeking hundreds of millions of dollars in the case, arguing that the company overpaid for the HFT7000 turbofan engines. The dispute allegedly traces back to the 1990s when Bombardier began manufacturing its super-midsize private jet, the Challenger series aircraft. The HTF7000 engines were initially manufactured solely for Bombardier and its Challenger family but were later sold to competitors like Gulfstream, Embraer and Textron. According to The Claims Journal, the contract says Honeywell must work to boost engine performance while reducing costs and that Bombardier should always get the best price.
"With the arrival of competitors Bombardier's relationship with Honeywell became strained," Justice David Collier said, according to The Canadian Press. "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 (original equipment manufacturers)."
According to The Canadian Press, Bombardier has argued that Honeywell has raised prices for the engines despite a contractual obligation to deliver the best prices while improving them over time. Honeywell has responded, saying that improving the engines while reducing cost was aspirational and denied the right to audit to confirm whether other companies were given better prices for the same engines. The company further argues that the HTF7000 engine models have adaptions specific to each company and the engine sold to Bombardier is not the same that is sold to competitors. The Canadian Press reported that the judge found the engines had considerable similarity and stated that the contract provision still applies.
Honeywell's HTF7000 turbofan engine family has over 1.7 million flight hours. The manufacturer reports that maintenance is simple, with the ability to replace key line-replaceable units in 20 minutes or less with few tools. The engine is used on the Bombardier Challenger 300 and other variants are used on different jets. The HTF7350B is used for the Challenger 350; the HTF7250G for the Gulfstream G280; the HTF7500E is used on the Embraer Legacy 450/500; the HTF7500E is used on the Praetor 600; and the HTF7700L is used on the Citation Longitude. The engine family is known for its availability, reliability and performance.
Bombardier is seeking $447 million ($331 million in USD) in damages from Honeywell over the claims that it overpaid between 2012 and 2017, according to The Canadian Press, but no ruling has been established on damages.