G

iven the new interest in incentives demonstrated by the Canadian and Ontario governments when it came to huge automotive projects in recent months, Québec might have been pardoned for feeling a bit ignored.
      But Bombardier,

Bombardier will assemble its new line of passenger jets at sites in Québec and Northern Ireland.

which makes its home in Montréal, wasn't about to ignore the province when it came to deciding where to site assembly for its CSeries mid-sized jets, even with a game competing offer from Northern Ireland.
      Aided by newly promised funds, Bombardier announced on Friday, May 13, that Montréal would indeed be the home of its $2.1-billion assembly site, which brings with it the promise of 5,000 jobs. The cost of development is expected to be shared equally with suppliers and governments, and Canada, the U.K. and Québec have taken out the checkbook accordingly, expecting repayment on a royalty basis, based on aircraft deliveries. A total of US$263 million from Canada and $88 million from Québec will be forthcoming. But WTO challenges to that financial support from Bombardier's Brazilian competitor Embraer and from U.S. trade officials may be in the offing.
      "The province of Québec was selected as the final assembly site location because of the Canadian and Québec governments' competitive partnership offers, as well as the overall favorable economic and manufacturing context," Bombardier said in a statement. Montréal is also the site of the company's newly integrated manufacturing center, which combines final assembly activities with interior completion and painting for business jets.
      Bombardier's Belfast, Northern Ireland, location isn't losing out. The company has pledged to construct the aircraft's wings, engine housings and tail assemblies — provided the $340 million promised by the U.K. comes through. Various accounts have pegged the seat count at anywhere between 100 and 135 seats.
      But all of those transatlantic investments are contingent on one more thing: orders placed for the product. The count so far? Zero.

      Besides the threats from Embraer and the U.S., the good news was somewhat dampened one week after the announcement, when it was announced that Bombardier had not managed to negotiate an engine contract for the new plane with either of the chief aerospace engine consortia: International Aero Engines (Rolls-Royce PLC and Pratt & Whitney Co. Inc., among others) and CFM International (General Electric Co. and Snecma Group of France). But that may just be a hiccup, as the company seeks now to negotiate with those companies on an individual basis. If a new engine is sought, development costs could add another $1 billion to the tab.
      The CSeries — for "Competitive Continental Connector," — was announced in summer 2004 at the Farnborough Air Show. Targeting a 100- to 150-passenger aircraft market that Bombardier New Commercial Aircraft Program President Gary Scott valued at "$250 billion U.S., or roughly 6,000 aircraft over the next 20 years," the series would consist of one variant in the 110-to-115-seat range and the other in the 130-to-150 range. Each could be configured for short-haul or transcontinental flight. The rising tide of low-cost carriers is the primary target market for the CSeries, as it is for Embraer's entry in the niche.
      Bombardier's June 1 financials for the quarter ended April 30 showed regional jet orders to be behind last year's pace by one jet, with 43 orders, while business jet orders were about to catch up, at 39, vs. last year's number of 30.
      The original competition for CSeries assembly included Bombardier plants in Toronto and in New Mexico. But some speculated that if Ontario got another major corporate investment just after its huge successes with GM and Ford ($1.9 billion and $818 million, respectively), well, there might just be enfer to pay.
      Meanwhile, New Mexico officials grew frustrated by continual delays in the final selection process, suspected being used as leverage and withdrew from the competition in early March.
      But the biggest lever was union labor, which reached a key agreement with the company on March 6, 2005. As reported in our May issue, the Montréal plant's 6,300 workers themselves sent a powerful message by voting for a wage freeze in the first year of a six-year contract. The agreement would also reduce overtime and employee absenteeism. Bombardier spokesperson Sylvie Gauthier said the vote was of great interest to the company, and was "something we will consider seriously" in the final recommendation.
      Now all Bombardier needs is some serious vendor and customer consideration.