Days after throwing a $1 billion lifeline to struggling aircraft manufacturer Bombardier, the Quebec government is now asking the newly elected Justin Trudeau federal government to match the investment in one of the province’s biggest employers. The new government, which swept to power two weeks ago, will decide Wednesday whether to give the company money to help it weather a looming financial crisis. The cash crunch was alleviated by the investment by the Quebec pension plan but might not be enough to solve the long-term issues created by its over-budget development of the CSeries airliner and a falloff in business jet and railway revenues. “I will continue to look at strategic options across the board. We will continue to look and they need to make good business sense and create value for customers and for shareholders,” CEO Alain Bellemare told the Montreal Gazette. That could include selling off minority stakes in its airplane and railway businesses.
The $1 billion from Quebec is enough to finish the CSeries certification program. Bombardier is within weeks of certifying the smallest of the single-aisle airliner models, the 100-seat CS100. But the 160-seat CS300 has more orders and there wasn’t enough cash to finish its certification, according to some reports. Even after the airliners are certified, Bombardier will continue to burn cash as it sends the first ones out the factory door at Mirabel, near Montreal. Bombardier even offered to sell the program to Airbus but negotiations broke off when Canadian media got wind of the story.
By Russ Niles | November 1, 2015