Business

Japan's Mitsubishi Aircraft accuses Bombardier of trying to limit competition for regional jets

Reuters

Mitsubishi Aircraft Corp. is accusing Bombardier Inc. of using “anti-competitive conduct” to limit competition for planes with less than 100 seats, as the Japanese company works to bring its long-delayed regional jet to the market.

In October, the Montreal-based maker of planes and trains sued the aircraft unit of Mitsubishi Heavy Industries Ltd., alleging that former Bombardier employees passed on trade secrets to help with the development and certification of the company’s new regional jet known as the MRJ, short for Mitsubishi Regional Jet.

The MRJ will compete with regional jets produced by Bombardier and Brazil’s Embraer SA.

Mitsubishi said in a counter-filing claim that Bombardier tried to coerce it and Seattle-based Aerospace Testing Engineering & Certification (AeroTEC) to sign no-poach agreements in 2016 that would stop them from hiring Bombardier’s employees.

Bombardier Chief Executive Alain Bellemare also implicitly threatened the continuation of its “supply relationship” with Mitsubishi Heavy in a 2016 letter to board Chairman Hideaki Omiya unless the Japanese company “ceased the solicitation of Bombardier employees,” Mitsubishi said in the claim.

“We believe that in response to the threat posed by the MRJ, Bombardier has chosen to engage in a pattern of anti-competitive conduct instead of competing on the merits of its product,” Mitsubishi said in a statement.

“Bombardier has threatened, pressured and sought to coerce Mitsubishi Aircraft, its U.S.-based partners, and individual employees working on the MRJ program.”

The MRJ, Japan’s first passenger plane since the 1960s, has been delayed by several years, with first customer ANA Holdings Inc. now expecting the 90-seat plane in 2020, rather than in 2013 as originally envisaged.

Bombardier has said it hopes to make a decision this year on the future of its money-losing CRJ regional jet as it “aggressively” pursues new orders to secure its industrial future.

In response to the latest filing, Bombardier repeated its view that its rival was illegally trying to obtain and use its trade secrets.

“Mitsubishi Aircraft Corp.’s attempt to recast the dispute as anything other than Bombardier’s justified protection of its intellectual property is misguided and disingenuous,” it said in a statement.

“Bombardier will vigorously enforce its rights and that includes holding (Mitsubishi Aircraft), AeroTEC and individual wrongdoers accountable.”

In the October lawsuit, Bombardier accused Mitsubishi Aircraft of violating the Defend Trade Secrets Act of 2016 by trying to use the confidential data and documents obtained from former employees to accelerate the “extremely complex and costly” process of getting its planes certified.

Mitsubishi Aircraft asked a U.S. court in December to dismiss Bombardier’s lawsuit, arguing that the allegations were baseless and designed to “disrupt development” of its rival jet.