MONTREAL — The CEO of Bombardier Inc. and the premier of Quebec jointly called for more government investment in the aerospace industry Monday, with Premier Philippe Couillard again urging the federal government to pony up US$1 billion for the CSeries.
Speaking at the Aerospace Innovation Forum in Montreal, Couillard touted his government’s “essential” US$1 billion investment in Bombardier’s CSeries jetliner, for which it received a 49.5 per cent stake in the program.
“We have decided to invest in the CSeries. Why? Because this is by far the largest and most important innovation project in Canada today,” Couillard said.
“Our government decided to partner with the CSeries to unlock the full potential of this aircraft. This partnership was completed for our industry as a whole.”
Bombardier Inc downgraded at TDKevin Libin: We’ll beg Bombardier to take our handouts if we have toBombardier Inc rejects aid proposal from Canadian government: sources
Although the troubled program has gained some momentum in recent months, with a letter of intent to sell 45 CS300 jets to Air Canada and reports of a pending deal with Delta Air Lines Inc., Bombardier and the Quebec government have asked Ottawa to pitch in another US$1 billion to boost its likelihood of success.
The two sides are still in negotiations, and federal Innovation Minister Navdeep Bains told reporters in Ottawa last week that the government is seeking assurances on jobs, research and development spending and the company’s Montreal head office.
Couillard again appealed to the federal government to step up, saying there’s no time to waste.
“For Quebec, the aerospace industry — and I say this in a very friendly way — the aerospace industry is as important to us as the automobile industry is for Ontario, that’s the reality,” he said.
“This is why the federal government should also partner with us on the CSeries, by far the most important innovation project in Canada,” he added, to a standing ovation.
Bombardier CEO Alain Bellemare, who introduced Couillard, told attendees that innovation will stall without public investment.
“The investments needed to develop new technologies today in our industry are very large, very complex, and therefore public-private partnerships are essential for Canada to remain a leader in aerospace,” Bellemare said.
“The partnership that we have with the Quebec government for the CSeries is a great example. Quebec’s investment has played a critical role in re-energizing this program.”
Bombardier has yet to see any money from the Quebec government, which announced the investment last October. The two sides say they are working towards an agreement by June 30.
The company also recently received US$1.5 billion from Quebec’s pension fund for 30 per cent of its train-making business.
Bombardier has indicated that additional support from the federal government would be nice to have, rather than a must-have.
In a recent interview with the Financial Post, Rob Dewar, vice-president of the CSeries program, said he views any federal support as “just an extra bonus that would be helpful but is very clearly not required.”
If Bombardier does manage to clinch a CSeries order from Delta, that could reduce its need for federal support even further.
Several reports have said the two companies are close to reaching an agreement, and may even announce a deal when Bombardier releases earnings and holds its annual shareholder meeting this Friday.
Colin Bole, head of sales for Bombardier Commercial Aircraft, didn’t deny that an order is pending when asked about it during a question-and-answer session at the Aerospace Innovation Forum.
He said the success of the CSeries depends on marquee customers like Air Canada and Delta.
“We continue to have numerous discussions with those highest-quality airlines around the world,” Bole said.
“We are hopeful of being successful with a number of those and I would say Delta certainly qualifies extremely well in that category of trend-setters in the industry.”