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WHY BOEING IS LAYING WASTE TO CANADA’S AEROSPACE INDUSTRY

WHY BOEING IS LAYING WASTE TO CANADA’S AEROSPACE INDUSTRY

Canada could easily negotiate a deal to buy the Saab Gripen fighter jet and have it built in Canada by Bombardier

Make no mistake about it, Canada’s aerospace industry is under serious attack. One of the very first companies that Donald J. Trump visited after being elected president was Boeing and of course it was that same Boeing company that cried foul and went running to daddy (ie. complained to the Trump administration) after Bombardier won a $6 billion contract with Delta Airlines for its new C Series aircraft.

Subsequent to the Boeing complaint, the Trump administration imposed a crushing countervailing duty of 220% on any Bombardier C Series aircraft sold in the US, something that, if it stands, will surely kill the Delta deal and prohibit the company from selling any of its planes in the US. On top of that, the U.S. Commerce Department has also imposed an 80% anti-dumping duty, which combined represents a potential 300% in tariffs that could potentially be levied against the C Series.

The fact is that the Delta contract is crucial to the survival of Bombardier as a builder of airplanes and of course both Boeing and Trump are well aware of this and would like nothing better than to see Canada’s biggest aircraft manufacturer go out of business.

But, the thousands of aerospace workers and engineers at Bombardier who would be affected, needless to say, are not so sanguine about the prospect of being unemployed. In fact, as we are writing this – literally – Bombardier has announced that it is giving more than 50% of its C Series business to Airbus in an attempt to stave off the attack from Boeing.

Bombardier, has put a brave face on the deal with Airbus, and its public affairs rep told CDR, “With regard to the future of the C Series program, the recent announcement of a partnership between the C Series and Airbus brings new assurance for the success of this state-of-the-art aircraft. The agreement brings together Airbus’ global reach and scale with Bombardier’s newest jet aircraft family, and positions both partners to fully unlock the value of the C Series platform including on the US market.”

And, that’s the key – the US market. While Boeing probably sells almost 50% of its product outside of the US, its avaricious demand that Bombardier be prohibited from doing business there, indicates a level of hubris and hypocrisy, heretofore unseen in Canada’s aerospace industry. The company would have the Canadian public believe that it is doing great things in Canada through its single manufacturing plant in Winnipeg and it has launched what it calls an “intensive multimedia campaign” to win over the Canadian public.

But, that makes us wonder why we received no response from our invitation to Boeing’s Chairman, President and CEO, Dennis Muilenberg, to talk to us about his intentions in Canada and to explain why the company has closed many more plants in this country than it has opened. We also wanted to know why Boeing does not build complete aircraft in this country the same way it does in multiple cities in the US and the same way Bombardier does.

The Canadian government should be extremely concerned about the slow train wreck that is Bombardier right now because this country is on the verge of losing a strategic asset and Canada’s biggest airframe manufacturer in the bargain.

The Airbus deal may avoid the loss of jobs for now, but don’t be surprised if down the road C Series production is moved to the Airbus operation in Mobile, Alabama in an attempt to gain access to the US market. It is truly a shame that a once innovative company with an entrepreneurial flair has had to give a chunk of itself away just to stay in business.

As we’ve said before in this space, the government should make every effort to ensure that Canada retains a legitimate aircraft manufacturing industry, especially because of the potential disappearance of a strategic capability. Remember the Avro Arrow?

 

BUILD FIGHTER AIRCRAFT IN CANADA

 

It may very well be too late now but, we think Canada should seriously consider mandating that any new fighter jet that it acquires, be manufactured in this country. It would involve pumping some military spending into a Canadian company like Bombardier, the very same way DoD doles out fat defence contracts to support companies like Boeing.

That’s right, why not insist that Canada’s next fighter jet be built right here in Canada under license by Bombardier rather than at a plant in St Louis, Missouri (where Super Hornet is constructed)? Yes, we know it’s all about America first Mr. Trump but, as we’ve said in this space before, Canada should no longer settle for the pathetic crumbs that come its way as part of the usual IB package, value proposition or no value proposition. After all, this is Canada not America, so perhaps it should be Canada first?

Believe it or not, it’s not a farfetched idea. When Brazil agreed to buy the Swedish-made Gripen fighter jet from Saab, part of the deal was that the aircraft would be constructed right there in Brazil by erstwhile Bombardier competitor, Embraer. By the way, in winning that contract Saab beat out Super Hornet despite loud protestations and political manoeuvring by Boeing. And, who knows, considering Bombardier and Airbus’ new partnership, Eurofighter could be convinced to build its Typhoon fighter jet in Canada.

It’s really quite simple, we are saying that, if for no other reason, it is important that Canada ensures that an aircraft manufacturing capability is retained in this country as a matter of national security. There are other fighter jet options out there (besides Super Hornet) and it’s time the government started thinking outside the box a little. Despite its big media outreach campaign it is now quite apparent that Boeing is NOT the friend to Canada that it pretends to be, having just laid waste to Canada’s aerospace industry.

There is no question that Boeing has done very well in Canada over the years. The company has sold five C-17 heavy lift aircraft at an average price tag of over $250 million per copy. And, there is talk that Canada’s military would like to add to its fleet of Chinook helicopters that were furnished by Boeing at a cost of $2.3 billion. But, the undisputed capabilities offered by these Boeing aircraft notwithstanding, the Trudeau government must now eschew all Boeing offerings until such time as that company starts acting like the “trusted partner” it claims to be. 

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