As you may have heard, the government of Quebec a few weeks back announced that they were going to “invest” $1.3 billion into struggling aerospace and transportation company Bombardier in an attempt to rescue the company’s drastically over-budget and behind-schedule next-gen CSeries airplane.
The announcement came in the aftermath of an “earnings” report which was even more devastating for Bombardier than pessimistic financial analysts had projected.
At the time, Quebec’s government publicly called on the federal government to match their “investment”, openly stating that the fate of the CSeries program is in doubt without a further infusion of cash.
From the outside, Bombardier looks like a company in freefall, missing deadlines and running over-budget on even routine projects like Toronto’s long-delayed streetcar series. The delays and technical issues have been so numerous that the TTC’s CEO Andy Byford is now publicly musing about suing the company and permanently barring it from winning any future TTC contracts. (73 streetcars were originally projected to be in use by the end of 2015; currently the TTC has a mere 10 on the streets.)
The CSeries program that the Quebec government is desperately trying to save is producing a plane which is years behind schedule, and the company has only received firm orders for 243 units. One potential customer, Porter Airlines, looks less likely than ever to be a buyer after last night’s announcement by Transportation Minister Marc Garneau that the new Liberal government will not be granting the airline permission to fly jet planes out of Toronto’s island-based Billy Bishop Airport (and major kudos to NoJetsTO for a well-organized and victorious campaign!); Porter had previously put in an order for a dozen of the CSeries planes conditional on their Billy Bishop proposal’s approval.
Bombardier also announced that it was entirely cancelling its Learjet 85 program, a decision which contributed heavily to $4.9 billion USD loss posted in their third-quarter “earnings” report. And the fact that Quebec’s infusion of cash only covers about half the shortfall the CSeries program is projected to incur, Scotiabank is now projecting that Bombardier will need to go back to the government for more money within the next eighteen months.
All of which makes the Quebec government’s choice of the word “investment” smell kinda fishy. Continue Reading