Canada, Quebec And United Kingdom Ante Up
Bombardier announced
Friday that it has signed letters of intent with the governments of
Canada, Quebec and the United Kingdom for development of the new
CSeries family of aircraft. The company also announced site
selection for the production of the 110-130 seat airframes. Not
everyone is happy with the announcement.
Bombardier kept the work close to home, with the selection of
Montreal in Quebec, Canada for the final assembly location of the
CSeries. Bombardier's Belfast plant in Northern Ireland is the
preferred site for the development of the wings, engine nacelles
and composite empennage structures.
Bombardier Aerospace reviewed proposals from over a dozen sites
in Canada, the United States and Europe, and eventually cut it down
to a short list of offers from Quebec, Ontario, New Mexico and
Northern Ireland.
"This is a very significant milestone as we progress in our
discussions with customers and risk-sharing partners before our
Board considers a launch decision," said Pierre Beaudoin, President
and Chief Operating Officer, Bombardier Aerospace in a statement.
"We would like to thank all the governments who took part in this
selection process. Their interest clearly demonstrates their
support of the CSeries aircraft program and the substantial
economic benefits it will generate for the chosen locations."
The company says that Montreal was selected as the final
assembly site location because of the governments' competitive
partnership offers, and the favorable economic and manufacturing
context. A labor agreement reached last March with Bombardier
Aerospace employees in Quebec was also a key factor in the
decision.
Bombardier estimates CSeries development costs will reach $2.1
billion US, which it will share with suppliers and partner
governments, each for one-third of the total amount.
The governments of Canada, Quebec and the U.K. will together
invest a total of approximately $700 million US. Canada is throwing
in $262.5 million, while Quebec's contributions will be $87.5
million.
The U.K. is contributing $340 million to the effort in launch
investment and financial assistance. These investments to support
the research and development for the CSeries will be repayable by
royalties on aircraft sold. Prior to the official launch of the
program, Bombardier seeks firm commitments from potential customers
and suppliers.
Embraer Executives and US Trade officials seemed perturbed by
the announcement.
"Our position on this issue is clear. We are opposed to
subsidies for the development and production of large civil
aircraft," said Richard Mills, a spokesman for U.S. Trade
representative Robert Portman.
He said that the World Trade Organization had found that
Canadian financing of Bombardier violated trade rules in the past
and that the United States will closely study the latest funding
and "continue to follow the matter as it develops." according to
The Globe and Mail.
Canadian Industry Minister David Emerson acknowledged that
giving money to Bombardier could make Canada vulnerable to a
possible challenge from the WTO.
"My own feeling is it's time Canada toughened up," Mr. Emerson
said. "There's no doubt that there are trade risks out there," he
told reporters outside the House of Commons.