October 17, 2017 by Allen George
Bombardier and Airbus
Yesterday’s sale by Bombardier of a controlling interest in C-series production to Airbus is huge blow for the Canadian aerospace industry, but the best that it could do in a bad situation.
The C series itself is great, but management incompetence and customer worries about the company’s long-term prospects made it a hard sell. Then, when Bombardier finally made a sale to Delta, Boeing’s naked politicking and the US administration’s unreasonable duty made the future of the series – indeed the company – untenable. Management had to do something.
Bombardier is essentially handing over the keys to the kingdom here: Airbus gets control of the program for nothing (they only have to allow the C series to be manufactured at an existing plant in Mobile) and if the program is successful they have the right to buy out the entire partnership; if it’s unsuccessful they can walk away. Plus, it’s highly likely that Airbus views this not as a way to actually push the C-series; instead: a way to start conversations and then upsell customers to one of Airbus’ existing narrowbodies. Again, not a good situation for Bombardier, its employees, or Canada.
Airplane manufacturing is a heavily political, heavily subsidized business, and since Canada is much smaller than the other players on the stage (US, EU, China, Russia) with a non-existent defence program it doesn’t have the money or the weight to effectively compete.