Bombardier Aircraft Delivery Delayed

Millionaire Michael Huffington, the former congressman backing Arnold Schwarzenegger's California gubernatorial campaign, has other things on his mind besides the Governator. He's now fully immersed in a legal fight with Bombardier over the long-delayed delivery of a brand new $30-million Global Express that was struck by lightning.

The Canadian Globe And Mail reports both Huffington and Montreal-based Bombardier have filed in court accusing each other of failing to bargain in good faith. At issue, the delivery date of Houghton's jet. The situation has dragged on for more than four years.

Huffington (right) says in a letter he wrote Bombardier that "substantial pain has occurred in [his] relationship" with the aerospace company.

John Lawson, the former head of Bombardier's business jet unit who ended up trying to mediate the dispute on Huffington's behalf, said in a July 16 e-mail to Bombardier, "Michael has reluctantly come to the conclusion that Bombardier does not want him as a customer, which causes him some personal hurt."

The Globe and Mail reports Huffington wrote to Peter Edwards, president of the Montreal-based company's business jet division, on June 15th. He reportedly said he would continue doing business with Bombardier "even in the light of Bombardier's severe financial difficulties." Those problems were, at the time, just becoming apparent to Bombardier's customers.

On The Other Hand...

Bombardier says it bent over backwards to accommodate Huffington. The Global Express's fuselage skin and structure were damaged during transportation, and that the aircraft subsequently suffered a lightning strike that did further damage.

The company accuses Huffington of making unreasonable demands and not responding in a timely fashion to its efforts to put his Global Express into service.

Huffington's purchasing agent and Bombardier first signed a purchase agreement in late 1995, with delivery of the jet scheduled for November of 1998, according to the allegations.

The millionaire also accuses Bombardier of trying to hide the damage to the aircraft and that he only learned of the damage from hired consultants.

Bombardier says in its court filing that lightning strikes are not unusual and that any damage to model 9125 was repaired and the jet met all airworthiness requirements.

Bombardier also says it offered Huffington a choice: Accept delivery of the original repaired model -- aircraft 9125 -- or get the next one, number 9126, instead.

Call the lawyers.

Each party separately told the other over the summer that the purchase agreement had been terminated, according to the US court filings.

A May, 2003, Bombardier invoice contained in supporting documentation to the Quebec Superior Court filings offers a rare glimpse into usually confidential details about the premium jet, which has a cruise speed just below the sound barrier and can reach altitudes of more than 50,000 feet.

The invoice is for $29.75-million, of which Huffington's agent had already put up $12.6-million in progress payments. Huffington got a discount of $6.8-million and had to pay withholding tax of $676,776. Total cost of the Global Express: $11.1-million.

FMI: www.aerospace.bombardier.com