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Bombardier has lost US$1.6 billion according to a report of 2019. The Quebec-based aerospace company announced on Thursday that it will be leaving the commercial aviation business.
This comes after years of government subsidies in the hundreds of millions of dollars, and the blocking of disclosure of how much they’re actually receiving in taxpayer money, as reported by Blacklock’s Reporter.
Bombardier is attempting to pay back a multi-billion dollar debt by reorganizing its business. One such change was to sell its remaining stake in the A220 program (formally known as the C series) to Airbus. The commercial jet program is now 75 percent owned by Airbus with the Quebec owning the other 25 percent, although they won’t be putting any new money into the program, according to CBC.
Airbus will pay $591 million to Bombardier to acquire the work package production capabilities for the A220 and A330 projects. This will relinquish Bombardier from having to make the $700 million investment into the commercial jet program.
Airbus claims the new deal will secure a total of 3,300 jobs in Quebec, including a three-year guarantee of employment for the 360 people who currently work at Bombardier’s plant in Ville Saint-Laurent. Those employees are responsible for constructing the plant’s cockpits and will be transferred to Mirabel, Quebec, after said time period.
Quebec’s $1.3 billion investment in the project back in 2016 wasn’t enough to save them, as planes sales were initially slow, forcing Bombardier to sell a controlling stake of the program to Airbus in 2018 for $1.
“They have cashed out of the C series,” analyst Alexander Robert Medd of Bucephalus Research said of the company, “and now it appears the train business is up for sale. Alstom may be the only bidder.”
French multinational rail transportation company, Alstom, announced they are preparing to make an offer to acquire Bombardier Transportation, which includes their business of making rail and subway cars according to French TV station BFM.
Alstom is rumoured to value the deal around $7.6 billion, however Alstom has yet to confirm this figure.