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Growth in Aerospace

Industrial Demand Runs High in Montreal

Roughly 100,000 jobs were created in Quebec in the first half of 2000, one-fourth of Canada's job increase, reports CB Richard Ellis. Montreal, in particular, has been a major recipient of that growth, and with the construction of the Multimedia and E-Commerce cities, more jobs are expected to come online. So many companies have located or expanded in Montreal that the city's industrial vacancy rate dropped to 2.4 percent in Q2 2000 -- the lowest in Canada. For corporate users that means a hike in rental rates. CB Richard Ellis reports that net rental rates for quality space ranges between $4 and $5 per square foot. However, spec space under way is expected to relieve some of the demand and perhaps lower or at least maintain the prices. In 2000, Montreal's 300 million-sq.-ft. (27.9 million-sq.-m.) industrial market is expected to remain strong in terms of activity and growth, according to CB Richard Ellis. "Some speculative construction is expected primarily in the Saint-Laurent and West Islands markets," CB Richard Ellis explains in its Q2 2000 Industrial Market Index Brief for Montreal. "However, this space should quickly be leased, as new quality space is in short supply. With this low inventory level and limited construction, the build-to-suit projects will be expanding rapidly." Despite its tight industrial market, Montreal remains a very attractive environment as compared to other North American locations. This is in part due to the city's appeal to national and international companies, reports CB Richard Ellis, and it maintains "a relatively low cost for operations when considering all factors, including basic cost of facilities, quality of life for employees and access to a skilled work force at competitive costs."

The Quebec aerospace sector has also seen spectacular growth in recent years, with sales increasing by 66 percent over the last five years. Technology is one thing, but when you blend it with management and marketing savvy, you get Bombardier Aerospace (www.bombardier.com), the third-largest aircraft manufacturer in the world.

When Bombardier, then a rail car and snowmobile manufacturer, bought Canadair from the Government of Canada in 1986, there were many who thought the new administration would not pull it off. "We were producing three models at the time and some 30 aircraft a year," recalls Catherine Chase, vice president of public relations and communication at Bombardier Aerospace. In roughly the same space, Bombardier is now producing one aircraft every two days and has a line of 15 aircraft, including business jets, regional jets, turboprops and water bombers. In 1999, the company delivered a record 292 aircraft.

Over the next four to five years, Bombardier is set to hire some 4,000 new employees, having already increased its ranks by 3,000 over the last 18 months. It announced in August that it would build a $114 million plant in the Foreign Trade Zone (www.mirabel.org) in Mirabel just north of Montreal -- an area set aside for aeronautics, logistics and light manufacturing, where tenants benefit from financial assistance and refundable tax credits.

The company went against the grain when it launched the Regional Jet in 1992 and continues to do so, this time with a new turboprop model. The same could be said of its foray into business jets. Yet the Teal Group, an aerospace consulting firm based in Fairfax, Va., noted that in 1999 the value of the business jet market had exceeded that of combat aircraft for the first time in aviation history. "With increasingly crowded airports, business jets are just one more efficiency tool. Lower speeds at take-off and landing make it possible to land the Global Express in smaller airfields, closer to the final destination," notes Chase.

The Dorval plant is more than 1,000 ft. (305 m.) long and 180 ft. (55 m.) wide (there are two parallel assembly lines) and 45 ft. (14 m.) high. "It will produce 100 50-seat regional jets this year, bumping it up to 135 next year and 150 the year after," explains Richard Faucher, retired Bombardier building supervisor. Assemblers work on two levels, three in certain areas for work on the tail assembly.

As part of the facility, the Global Express finishing center can house up to 12 aircraft at a time in a spit-spot hangar. It can take up to six months to finish the interior of this US$40 million aircraft, right down to the cutlery and the glassware, indicates Faucher.