The Future of Bombardier

[Admiral Beez]

But the real loser here is Boeing. By attempting to bully the CSeries into submission they pushed it into the arms of its biggest competitor and made it a much bigger threat than it was before. Now instead of subsidies from Canada, they face subsidies from Canada and all of western Europe.

Very true. And with Airbus' factory in the USA there can be no anti-dumping claims. I would love to be a fly on wall at Boeing HQ today - there must be a lot of forehead slapping going on.

From Boeing's POV, I can see why they thought stopping Bombardier was important.

http://www.businessinsider.com/boeing-bombardier-complaint-canada-airbus-2017-5

Two words underpin Boeing's decision to launch a U.S. trade complaint against Bombardier, which plunged it into a row with Canada last week: "Never again".

U.S. industry experts say Boeing and other jetmakers at the time did not take the European consortium seriously enough and allowed their future nemesis to poach U.S. airlines from 1978. Again after the September 2001 attacks in the United States, when Boeing slashed production, Airbus filled the vacuum, building up market share and never looking back.

 

[dowlingm]

Airbus don’t want Q400 because they already own 50pc of its biggest rival ATR.

Does anyone want CRJ? If so, why? It is being killed by Embraer.

There is also the biz jet divisions but again there is only so much potential there.

At the end of the day Canada has more than enough financial firepower to maintain Bombardier, but nobody wanted to put up the money because while C Series has been sucking up investment $ it left platforms like CRJ needed huge cash spend (or to come up with a new design as Embraer did), and that’s before the well known issues about the family controlling shareholdings. If Airbus is serious about Canada being a “home country” then we might see a continuing future for aerospace, just not under a Canadian brand.

 

[dowlingm]

I'd have to think the Q400 unit will be sold off, along with the Downsview plant.

If Downsview plant is closed, what does that mean for the airfield and the lands nearby?

 

[Admiral Beez]

If Downsview plant is closed, what does that mean for the airfield and the lands nearby?

More condo towers, parkettes and public housing projects.

 

[rbt]

Okay, just how many ways can the Bombardier company be carved about? So, Airbus can buy a controlling share of just one program, but not of BBR Aerospace as a whole? What are they running a half dozen listed shadow companies so that whenever they need some cash they just sell another sliver?

C-Series was separated from Bombardier Aerospace when Quebec bought their share of the program.

And now Quebec and Canadian taxpayers are funding Airbus?

Not quite. This is how Quebec sells their share of the C-Series program. They're out of it in 5 years when Airbus takes the rest, likely with guarantees that Airbus cannot move manufacturing. Perhaps Quebec will begin manufacturing other Airbus aircraft too.

 

[rbt]

Very true. And with Airbus' factory in the USA there can be no anti-dumping claims. I would love to be a fly on wall at Boeing HQ today - there must be a lot of forehead slapping going on.

Indeed. They've accidentally made Airbus a very very strong competitor by pushing Bombardier into a corner. A CS-500, which I'm sure design teams will be put on immediately, will probably eliminate the 319/320 lines and hammer 737-800 sales. The CS-500 will likely cost less to manufacture and operate than the 737 while simultaneously offering more comfort for passengers (space per seat); and Airbus got it cheap.

 

[cplchanb]

C-Series was separated from Bombardier Aerospace when Quebec bought their share of the program.



Not quite. This is how Quebec sells their share of the C-Series program. They're out of it in 5 years when Airbus takes the rest, likely with guarantees that Airbus cannot move manufacturing. Perhaps Quebec will begin manufacturing other Airbus aircraft too.

not sure airbus would venture to quebec to build their aircraft. there simply is no market for airbus here. AC and WJ have both gone to the Boeing lapdog and the 737

 

[Amare]

Not to be rude, but there's no chance Airbus will be getting rid of their A320 line of products. Simply put, that is their bread and butter and they have improved the economics by offering the A320neo line.

It is very entertaining to see how Boeing has potentially crippled themselves in this market segment yet again, they deserve it. And if the genius Wilbur Ross of the U.S Commerce Department even tries to foolishly place duties on Airbus, they would be launching a full scale trade war which the WTO would never allow. I wouldnt put it past him to do it however, since his boss above him is incompetent.

 

[kEiThZ]

As an aerospace engineer, mixed feelings. The deal proved how great Bombardier's engineers are, while simultaneously proving how terrible Bombardier's management and how incapable Canadian companies are at scaling to a global size.

As per the deal, Airbus gets to buy out the whole CSeries program in 2023. That's a really sad factoid. Canada, a country of 35 million people, made an airplane that was better than the number one player Airbus from Europe (popn 500 mil), the number two player USA (pop 350 mil), the number 4 player China (1.4 billion), and number 5 player Brazil (~200 million). To know that as soon as Bombardier started delivering a fantastic airplane, the program gets sold off to foreigners for a song. The story of this country. We seem to have no interest or ability in protecting our national champions.

In the long run, this basically portends Bombardier leaving Commercial Aviation completely. They'll go back to making bizjets.

As a BBD shareholder, I can't complain. They've delivered. And a 31% stake in this program for a few years will deliver a lot more than 100% under BBD ownership ever would have.

Airbus made a fantastic deal. Nobody on here seems to get how strategic it is. The real flaw with the A320 is that it carries 180 pax in an LCC config. Given that you need a flight attendant for every 50 pax, that's not maximizing. The Boeing 737-800/737-8 come in closer to 200. So now, Airbus can fund the CS500 for the 150-170 seat count and then launch a development program to extend the 320 by 3 rows and the 321 by several rows. Toss in a new carbon fibre wing, landing gear and engines. And they'll do that for maybe $2 billion and use the 322 and 323 and the CS500 to attack Boeing at every single segment from 100 to 250 passengers.

 

[kEiThZ]

Not to be rude, but there's no chance Airbus will be getting rid of their A320 line of products. Simply put, that is their bread and butter and they have improved the economics by offering the A320neo line.

Get rid off? No. Heavily modify? Most likely. They've already announced, with this deal, they are dropping the 319NEO. The next obvious move is to launch a development program for a two aircraft family that's larger than the 320 and 321.

 

[jje1000]

This move feels very much one driven out of desperation for Bombardier.

Good for Airbus (they just got a new plane on the cheap), good for the US (they get the jobs anyways), and not that great for us (Canada potentially loses the manufacturing and the IP in the long term).

Ultimately Canada should have invested in the program, but Bombardier with their ridiculous share structure killed that.

 

[DopeyFish]

This move feels very much one driven out of desperation for Bombardier.

Good for Airbus (they just got a new plane on the cheap), good for the US (they get the jobs anyways), and not that great for us (Canada potentially loses the manufacturing and the IP in the long term).

Ultimately Canada should have invested in the program, but Bombardier with their ridiculous share structure killed that.

Canada couldn't have as they were trying to get around the tariffs. They needed someone to take sole ownership. Airbus did it because eh, free embarrassment of Boeing.

You see it as not great, but I see it was a golden goose. Sure we are not getting the same percentage... but now you have Airbus effectively making it their top single lane airliner. They are now able to sell in the US without issue. The industry suggests the design is even better than expectations in field. This means there is potential for a jumbo variant to compete head on with Boeing and the sales are likely going to increase dramatically in a market where there's little competition.

This has good potential to be a big windfall for both Bombardier and Canada, even though we look a bit like losers at first.

 

[TOareaFan]

Ultimately Canada should have invested in the program, but Bombardier with their ridiculous share structure killed that.

This is such a Canadian "thing" (and not aimed at you....but in general).

For years (decades?) all we read is "Bombardier = Welfare Corporation" "Bombardier = too much government subsidy" "Bombardier = sucking at the taxpayer teat" .....then a large foreign company buys the division/product and an early reaction is "Canada should have invested" (BTW the share structure does not prevent investment....both Quebec and Airbus bought into a separate LP which is unaffected by the bbd share structure).

It is like the reaction when the Bay was bought by Americans (or when just about any Canadian retailer that went out of business)...."we are losing a bit of ourselves" "there is no Canadian shops to buy from anymore" "etc etc".

The time for economic nationalism is in advance.....not retroactively.

(again...not a "shot" at jje1000....just that post brought this very Canadian way of looking at things to light).

 

[kEiThZ]

@TOareaFan

Absolutely. How many Torontonians said, "Screw Bombardier. My streetcars are late..." And how many Albertans said, "Screw Bombardier. Quebec won't approve our pipelines."

This country. Like crabs in a bucket.

People don't realize how valuable our aerospace sector is. Even here in Toronto, how many on this board would be happy to Downsview filled with condos instead? Cause who needs strong industry and a high technology export oriented sector right?

Bombardier is the anchor for a sector that has the largest simulator maker in the world (CAE), the third largest aeroengine sector in the world (Pratt&Whitney Canada, Rolls Royce Aero Canada), third largest landing gear maker in the world (Safran, formerly Messier-Dowty) and one of the top 5 avionics makers (CMC Esterline, formerly Canadian Marconi). That industry breeds engineering talent which feeds into so many other sectors. And it's incredible that Canada has thing despite being a rather small population. No other country of our size, has been able to do this.

To top it off, this is one of the few high tech export sectors we have. Very few people realize how valuable that is. Aeroengines for example, are literally worth their weight in gold. It's why governments work super hard to protect Bombardier.

But today, I'm stuck wondering if this is the start of the slide in our aerospace sector. Bombardier has proven it can't scale. It will have to exit commercial aviation in a few years. How long before some of those supporting companies really consider decamping to the US or EU?

 

[TOareaFan]

@TOareaFan

Absolutely. How many Torontonians said, "Screw Bombardier. My streetcars are late..." And how many Albertans said, "Screw Bombardier. Quebec won't approve our pipelines."

This country. Like crabs in a bucket.

People don't realize how valuable our aerospace sector is. Even here in Toronto, how many on this board would be happy to Downsview filled with condos instead? Cause who needs strong industry and a high technology export oriented sector right?

Bombardier is the anchor for a sector that has the largest simulator maker in the world (CAE), the third largest aeroengine sector in the world (Pratt&Whitney Canada, Rolls Royce Aero Canada), third largest landing gear maker in the world (Safran, formerly Messier-Dowty) and one of the top 5 avionics makers (CMC Esterline, formerly Canadian Marconi). That industry breeds engineering talent which feeds into so many other sectors. And it's incredible that Canada has thing despite being a rather small population. No other country of our size, has been able to do this.

To top it off, this is one of the few high tech export sectors we have. Very few people realize how valuable that is. Aeroengines for example, are literally worth their weight in gold. It's why governments work super hard to protect Bombardier.

But today, I'm stuck wondering if this is the start of the slide in our aerospace sector. Bombardier has proven it can't scale. It will have to exit commercial aviation in a few years. How long before some of those supporting companies really consider decamping to the US or EU?

I am regularly mocked by friends about my car buying choice(s).

I have put a very arbitrary limiter on my own choices.....I will only purchase a car if the company has an assembly plant in Canada where finished cars actually roll off a line. The car I buy does not have to be built here.....but the company has to build here.

I, nor any relatives, don't work in the car industry but there are certain high value engineering/manufacturing jobs that I would just prefer to see supported in this country/region.

I wish I flew more, I really do, because then maybe my pronouncement to not book any more flights on routes scheduled to be flown by Boeing planes would have a bit more impact.

We far too easily (IMO) sit back with this "nothing I can do about it but complain" attitude about things.