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IWASEYEWITNESS
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Bombardier To Get Financial Aid From Québec

Wed Oct 28, 2015 12:38 pm

Québec Premier Philippe Couillard is to announce tomorrow some form of goverment support to help Bombardier breathe easier with its CSeries program. No details have been given as of yet, but this aid could take the form of share capital, or simply loan guarantees. The public Caisse de dépot et placements du Québec is already one of the main shareholders of Bombardier.

(In French)
http://affaires.lapresse.ca/economie...bec-vient-en-aide-a-bombardier.php

I believe Bombardier also benefits heavily from tax credits. I was wondering how heavily supported the other western manufacturers are. Haven't there been hearings at the WTO concerning Bombardier and Embraer on unfair competition because of subsidies?

Insights?

[Edited 2015-10-28 05:57:31]
 
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Quantos
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RE: Bombardier To Get Financial Aid From Québec

Wed Oct 28, 2015 12:42 pm

Not really surprising; BBD is essentially Quebec's "too big to fail" company.
Quantos,

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qm001
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RE: Bombardier To Get Financial Aid From Québec

Wed Oct 28, 2015 12:59 pm

Frankly, everything in Quebec is too big to fail! I wondered how long it would take for the province to step in and help out.
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Amiga500
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RE: Bombardier To Get Financial Aid From Québec

Wed Oct 28, 2015 1:05 pm

As long as it (state + federal guarantees) isn't done half-assed so the airlines are in doubt about the viability of BBD.

That would be chucking money away in a long slow drawn out death spiral.

In for a penny, in for a pound - so make sure that the airlines know (or at least think) your willing to back them (BBD) to the hilt.
 
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Revelation
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RE: Bombardier To Get Financial Aid From Québec

Wed Oct 28, 2015 1:06 pm

Quoting Quantos (Reply 1):
BBD is essentially Quebec's "too big to fail" company.

Indeed its key product is vital to Quebec and to Canada. Of course I'm referring to the Ski-Doo.
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aircanadaa330
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RE: Bombardier To Get Financial Aid From Québec

Wed Oct 28, 2015 1:13 pm

Quoting IWASEYEWITNESS (Thread starter):
Haven't there been hearings at the WTO concerning Bombardier and Embraer on unfair competition because of subsidies?

I am pretty sure there have been several in the past, but I am sure that Embraer will be watching this very carefully, and will be quick to point out any issues they have. I am thinking the government will be buying shares in BBD.

I am very surprised it has taken this long for any government (Federal or Provincial) to step in and help BBD.
Cheers;
 
IWASEYEWITNESS
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RE: Bombardier To Get Financial Aid From Québec

Wed Oct 28, 2015 1:16 pm

Quoting Revelation (Reply 4):
Of course I'm referring to the Ski-Doo.


   An essential part of everyday life! But Bombardier Inc. sold its recreational product division (BRP) in 2003 to Bain Capital (50%), the Bombardier family (35%), and the Caisse de dépot et placement du Québec (15%)!
 
Aircellist
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RE: Bombardier To Get Financial Aid From Québec

Wed Oct 28, 2015 1:23 pm

Quoting Revelation (Reply 4):
Ski-Doo

has been branched out, now.

http://www.brp.com/en-ca
"When I find out I was wrong, I change my mind. What do you do?" -attributed to John Maynard Keynes
 
IWASEYEWITNESS
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RE: Bombardier To Get Financial Aid From Québec

Wed Oct 28, 2015 1:27 pm

Quoting aircanadaa330 (Reply 5):
I am very surprised it has taken this long for any government (Federal or Provincial) to step in and help BBD.

Especially when considering business relations "in the shadows". Former CEO of Bombardier Pierre Beaudoin is also a board member of Power Corporation of Canada, widely recognized as one of the most (if not the most) politically influential organizations in the country, which has very close (though informal) ties with Couillard's Liberal Party.

[Edited 2015-10-28 06:28:55]
 
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KarelXWB
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RE: Bombardier To Get Financial Aid From Québec

Wed Oct 28, 2015 3:29 pm

Story is now available in English:

http://www.reuters.com/article/2015/...a-bombardier-idUSKCN0SM1UP20151028

Quote:
Canada's Bombardier (BBDb.TO) is set to book a writedown on its CSeries program and announce that the government of Quebec will be investing in the narrowbody jet program, according to several sources familiar with the matter.
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queb
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RE: Bombardier To Get Financial Aid From Québec

Wed Oct 28, 2015 8:42 pm

To be confirmed tomorrow:

- Bombardier will form a joint venture with the Quebec government on the CSeries jet program
- Bombardier will write down billions of dollars it has already sunk into the CSeries
- the government would be on the hook to fund half the final development costs (estimated to $2B including first 3 years ramp-up investment)

http://business.financialpost.com/ne...nd-announce-quebec-aid-sources-say
 
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thekorean
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RE: Bombardier To Get Financial Aid From Québec

Wed Oct 28, 2015 8:56 pm

Good news... Thank you Quebecers for keeping airplane industry more competitve.

Boeing and Airbus got government support for years no?
 
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KarelXWB
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RE: Bombardier To Get Financial Aid From Québec

Thu Oct 29, 2015 11:05 am

And confirmed:

http://www.bombardier.com/en/media/n...lts-for-the-thi.bombardiercom.html

Quote:
Bombardier has entered into a memorandum of understanding which contemplates a $1.0 billion investment by the Ministère de l’Économie, de l’Innovation et des Exportations du Québec (through Investissement Québec) (the Government) for a 49.5% equity stake in a newly-created limited partnership (the Investment) to which would be transferred the assets, liabilities and obligations of the C Series aircraft program.
What we leave behind is not as important as how we've lived.
 
BHXLOVER
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RE: Bombardier To Get Financial Aid From Québec

Thu Oct 29, 2015 11:11 am

Good luck to all involved.

I really hope the CSeries will be a success.....but I still have my doubts.
 
SpaceshipDC10
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RE: Bombardier To Get Financial Aid From Québec

Thu Oct 29, 2015 11:15 am

That 1 billion US$ is great, but when you think of the 4.9 billion US$ loses for this year's 3Q that I just heard on air, will it be enough?
 
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Faro
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RE: Bombardier To Get Financial Aid From Québec

Thu Oct 29, 2015 12:07 pm

Quoting SpaceshipDC10 (Reply 14):

That 1 billion US$ is great, but when you think of the 4.9 billion US$ loses for this year's 3Q that I just heard on air, will it be enough?

Having a bad feeling about this...remember that's USD 1 billion cash, it's the cash effect that's important. It may just be enough to enable certification and entry into service at which point cashflow starts to become positive with in-service deliveries. Assuming of course production costs aren't out of control à la 787...


Faro
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KarelXWB
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RE: Bombardier To Get Financial Aid From Québec

Thu Oct 29, 2015 12:22 pm

Certification and production ramp up will cost more than $1 billion; an analyst believes it would $2 billion or so. But the government is taking only 49.5% stake therefore the bills must be split:

http://www.reuters.com/article/2015/...a-bombardier-idUSKCN0SM1UP20151029

Quote:
In a note to clients on Tuesday, Sterne Agee analyst Peter Arment wrote that CSeries program development costs have already topped $5 billion and he expects another $2 billion in cash will be required to finish certification and absorb the ramp-up in production in the first three years.

That would mean Quebec would potentially front $1 billion or more in order to fulfill its side of the deal.

So the other $1 billion would have to come form Bombardier itself.
What we leave behind is not as important as how we've lived.
 
SpaceshipDC10
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RE: Bombardier To Get Financial Aid From Québec

Thu Oct 29, 2015 1:03 pm

So Québec government is investing 1.3 billion US$ in the new corporation (or whatever it's name is) dedicated for the CSeries.
 
bmacleod
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RE: Bombardier To Get Financial Aid From Québec

Thu Oct 29, 2015 1:19 pm

This will continue to be a sinking ship unless a big order arrives hopefully from AC or some mystery order. (we've seen them before).
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SpaceshipDC10
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RE: Bombardier To Get Financial Aid From Québec

Thu Oct 29, 2015 3:49 pm

Quoting bmacleod (Reply 18):
This will continue to be a sinking ship unless a big order arrives hopefully from AC or some mystery order. (we've seen them before).

the problem with such financial problems is the fear the manufacturer won't be able to deliver in the end. They already have two years of delay.
 
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Quantos
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RE: Bombardier To Get Financial Aid From Québec

Thu Oct 29, 2015 3:53 pm

I think the whole point of the government investing (read bailing out) BBD on this is to increase customer confidence in BBD. Perhaps down the line with an IPO for BBD Transport they could have raised the money anyway, but the fact that this is government money and not private funds is probably regarded well by potential customers. Now, I won't go as far as Sylvain Faust who's essentially claiming that orders were depending on this money and that they will appear in the next few weeks, but I still think that this could boost confidence in BBD as they get the plane certified and EIS under way. Then again, perhaps it would be wise not to put against AC or other customers to demand a stable source of funding before signing anything.

[Edited 2015-10-29 08:55:21]
Quantos,

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Amiga500
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RE: Bombardier To Get Financial Aid From Québec

Thu Oct 29, 2015 4:18 pm

Quoting Quantos (Reply 20):
I think the whole point of the government investing (read bailing out) BBD on this is to increase customer confidence in BBD.

+1

If the federal govt were to come out now and say "we are willing to lend BBD a long term loan at our central bank interest rates with no repayments till they are cash positive on program" (or similar to get around the WTO rules that seemingly don't really apply elsewhere) - then customers would know that the CS100 AND CS300 will make market, there will be support and there will be development.
 
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ssteve
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RE: Bombardier To Get Financial Aid From Québec

Thu Oct 29, 2015 5:51 pm

Quoting SpaceshipDC10 (Reply 19):

the problem with such financial problems is the fear the manufacturer won't be able to deliver in the end. They already have two years of delay.

With this, *those* fears should go away.

It is still difficult to size up the risk that there will be teething or in-service issues, and any risk-averse purchaser will figure, "I'll just get more A or B or Embraer planes"
 
marktci
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RE: Bombardier To Get Financial Aid From Québec

Thu Oct 29, 2015 6:37 pm

Quoting SpaceshipDC10 (Reply 14):

That 1 billion US$ is great, but when you think of the 4.9 billion US$ loses for this year's 3Q that I just heard on air, will it be enough?

The thing is, the US$4.9 billion is already spent. It was hanging around on the balance sheet as deferred development cost or some such thing and would have to be amortized as the units were sold (or, inevitably written down at some point if there were no units to sell). The cash is already spent and now, with this writedown, the accounting loss is also in the rearview mirror. That's US$3.2 million (specifically related to the C-Series program) that they don't have to recoup through sales price. This move should, in theory, allow BBD to achieve profitable plane sales more quickly and at a lower selling price.
 
rbrunner
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RE: Bombardier To Get Financial Aid From Québec

Thu Oct 29, 2015 6:44 pm

Quoting bmacleod (Reply 18):
This will continue to be a sinking ship unless a big order arrives hopefully from AC or some mystery order. (we've seen them before).

But once CSeries deliveries start to happen, cash flow will improve considerably. Of course it will take a significant number of deliveries until the project is cash positive, but so far it has been eating cash.
 
spartanmjf
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RE: Bombardier To Get Financial Aid From Québec

Thu Oct 29, 2015 7:26 pm

Quoting thekorean (Reply 11):
Good news... Thank you Quebecers for keeping airplane industry more competitve.

Let the debate begin. "Launch Assistance." Cough. Cough.
"Nuts to the man in 21D!"
 
AirbusCanada
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RE: Bombardier To Get Financial Aid From Québec

Thu Oct 29, 2015 7:28 pm

BBD Aerospace CEO Mr. Bellemare forecasting that the company will announce new order in the next few weeks. Hopefully it will come into fruition.

Also BBD will produce between 15 and 20 in 2016.

Swiss delivery will start in "Mid" 2016.


full interview link:
http://www.bnn.ca/Video/player.aspx?vid=737991

[Edited 2015-10-29 12:30:53]
 
Skywatcher
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RE: Bombardier To Get Financial Aid From Québec

Fri Oct 30, 2015 12:22 am

Two thoughts;

Are Embraer and BBD in merger discussions?

What is the Ontario gov't doing to help preserve all those jobs in Toronto at DH? Didn't they and the Feds pump $25 billion into GM/Chrysler back in 2008?
 
Viscount724
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RE: Bombardier To Get Financial Aid From Québec

Fri Oct 30, 2015 1:50 am

Quoting Skywatcher (Reply 27):
What is the Ontario gov't doing to help preserve all those jobs in Toronto at DH? Didn't they and the Feds pump $25 billion into GM/Chrysler back in 2008?

The support for GM and Chrysler is discussed here. The total funds disbursed amounted to $10.8 billion for GM and $2.9 billion for Chrysler (in Canadian $ at the exchange rates in effect at the time).
http://www.ic.gc.ca/eic/site/auto-auto.nsf/eng/am02370.html
 
Tangowhisky
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RE: Bombardier To Get Financial Aid From Québec

Fri Oct 30, 2015 2:02 am

Quoting Skywatcher (Reply 27):
Are Embraer and BBD in merger discussions?

Not a chance. Too risky anti-trust hurdles to face. Too much bad blood between these two rivals.

Quoting Skywatcher (Reply 27):
What is the Ontario gov't doing to help preserve all those jobs in Toronto at DH?

They want to litigate BBD on being late with the TTC Streetcars.
But on a serious note, BBD have scaled back Global 5000/6000 production. Q400s are being built in trickles. The G7000/8000 work is shared between Montreal, Toronto, and Wichita. If the Ontario municipal and provincial governments don't wake up and think twice about the streetcar suit, Porter, etc., I don't see why BBD would want to hang around in de Havilland. Let's not forget that they almost had a plan to move the Q400 production to Russia

Quoting Skywatcher (Reply 27):
Didn't they and the Feds pump $25 billion into GM/Chrysler back in 2008?

Yes they did. Over the years federal and provincial governments pumped in billions so that the multinationals would stay in Ontario, but bit by bit they moved operations to right to work states in the USA.
Only the paranoid survive
 
Viscount724
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RE: Bombardier To Get Financial Aid From Québec

Fri Oct 30, 2015 2:10 am

Quoting Tangowhisky (Reply 29):
Quoting Skywatcher (Reply 27):
Didn't they and the Feds pump $25 billion into GM/Chrysler back in 2008?

Yes they did.

The question involved aid provided to GM/Chrysler resulting from the financial crisis of 2008, so the $25 billion figure is much too high. It was roughly half of that and it has almost all been repaid. See Reply 28.
 
JoeCanuck
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RE: Bombardier To Get Financial Aid From Québec

Fri Oct 30, 2015 7:18 am

Quoting spartanmjf (Reply 25):

Let the debate begin. "Launch Assistance." Cough. Cough.

There isn't a major industrial project that doesn't get some sort of assistance. Anyone who thinks otherwise is being, at best, disingenuous.

Even a few years ago during the $100+/bbl years, oil companies were on the receiving end of all sorts of tax breaks and such, all the while making record profits. In this case, Quebec is essentially buying shares in BBD...which can be spun as an investment, rather than bailout.

BBD won't be allowed to fail...just like the banks, auto companies and airlines. Now, the marketplace doesn't have to worry about that at least.

Quoting Quantos (Reply 20):

I think the whole point of the government investing (read bailing out) BBD on this is to increase customer confidence in BBD.

That is the most important point of all. Much of the recent talk has been about the survival of BBD itself. Now with the backing of the province, (and positive words from the feds will add to the confidence), potential customers can focus on the suitability of the CSeries as a product, rather than worrying about the pain of buying an orphan.
What the...?
 
planemaker
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RE: Bombardier To Get Financial Aid From Québec

Fri Oct 30, 2015 10:26 am

Quoting JoeCanuck (Reply 31):
There isn't a major industrial project that doesn't get some sort of assistance. Anyone who thinks otherwise is being, at best, disingenuous.

The issues is that BBD family has already received tons of assistance over the years. In the case of the CSeries, one third came from government. The optics of this bailout is negative in Quebec since the government is running an austerity budget cutting public services... yet "invests" in a family controlled company... Austerity? Quebec's $1B investment in Bombardier belies its penny-pinching ethos

The obvious question that is being asked is why doesn't the family ante up more cash instead of the tax payer on the risky project since the BBD family has lots of business investments aside from BBD and BRP... Bombardier family seeks to crack exclusive cement market
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queb
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RE: Bombardier To Get Financial Aid From Québec

Fri Oct 30, 2015 10:37 am

Quoting Viscount724 (Reply 30):
and it has almost all been repaid. See Reply 28.

No, the federal government lost about $3,5 B with GM bailout.

http://www.theglobeandmail.com/repor...out-of-auto-firms/article23828543/
 
sccutler
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RE: Bombardier To Get Financial Aid From Québec

Fri Oct 30, 2015 11:23 am

Quoting Tangowhisky (Reply 29):

Yes they did. Over the years federal and provincial governments pumped in billions so that the multinationals would stay in Ontario, but bit by bit they moved operations to right to work states in the USA.

Really?

Which GM or Chrysler plants moved to "right to work" states? And in which GM or Chrysler plants are the workers not represented?

Texas is a right to work state, but GM 's Arlington plant (hugely productive, by the way) is still a UAW shop.
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Amiga500
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RE: Bombardier To Get Financial Aid From Québec

Fri Oct 30, 2015 11:44 am

Quoting planemaker (Reply 32):
The issues is that BBD family has already received tons of assistance over the years.

If you mean the Bombardier-Beaudoin family should also be forking out here - I completely agree with you that they are getting a light ride for the decision they've made.

If you mean BBD the company - then they are to a degree.

Quote:
The optics of this bailout is negative in Quebec since the government is running an austerity budget cutting public services... yet "invests" in a family controlled company... Austerity? Quebec's $1B investment in Bombardier belies its penny-pinching ethos

That article is written by someone with a very, very limited understanding of economics. If BBD go under, who replaces them in the local economy as a large net exporter of the same scope?

Quote:
The obvious question that is being asked is why doesn't the family ante up more cash instead of the tax payer on the risky project since the BBD family has lots of business investments aside from BBD and BRP... Bombardier family seeks to crack exclusive cement market

Exactly - furthermore, it also would seem to highlight that they (well, pierre beaudoin most likely) are simply reckless risk takers and if it runs off the rails, there is an implicit expectation that they will be bailed out. The companies maybe should be saved - but the Beaudoins should be outed from the board as a result (and lose their proportion of shares as appropriate to the bailout and the company valuation at the time).
 
Pyrex
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RE: Bombardier To Get Financial Aid From Québec

Fri Oct 30, 2015 12:29 pm

Quoting JoeCanuck (Reply 31):
Even a few years ago during the $100+/bbl years, oil companies were on the receiving end of all sorts of tax breaks and such, all the while making record profits.

Again with this meme... when will people understand that depreciation is NOT a tax break, but a legitimate business expense (one which the government forces you to expense over time rather than up-front as it should)? It is called an income tax, not a revenue tax, for a reason.
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AirbusCanada
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RE: Bombardier To Get Financial Aid From Québec

Fri Oct 30, 2015 1:24 pm

Quoting Amiga500 (Reply 35):
Exactly - furthermore, it also would seem to highlight that they (well, pierre beaudoin most likely) are simply reckless risk takers and if it runs off the rails, there is an implicit expectation that they will be bailed out. The companies maybe should be saved - but the Beaudoins should be outed from the board as a result (and lose their proportion of shares as appropriate to the bailout and the company valuation at the time).

I don't think Bombardier would become the third largest Jet aircraft manufacturer and one of the largest employer in the country without taking high risk projects.

Do not forget Govt poured plenty of money in Canadair and DHC when they were owned and operated by them, still failed to turn them into self sustained profitable business.

This is an ineradicable achievement considering the fact that domestic/military market for Bombardier Aerospace product is practically non existent. They had to compete with the Koreans, Japanese, Russians, Chinese, Europeans and Brazilians, most of whom had access either large domestic/military market and in some cases unlimited government funds.
 
Aircellist
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RE: Bombardier To Get Financial Aid From Québec

Fri Oct 30, 2015 2:49 pm

Quebec is not even investing into BBD per se. The government is investing in a sister company, that has to do only with the CSeries, and Bombardier may buy back 25% yearly of Quebec's share, starting from 2019 (heard over the radio, yesterday)…
"When I find out I was wrong, I change my mind. What do you do?" -attributed to John Maynard Keynes
 
JoeCanuck
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RE: Bombardier To Get Financial Aid From Québec

Fri Oct 30, 2015 4:41 pm

Quoting planemaker (Reply 32):
The obvious question that is being asked is why doesn't the family ante up more cash instead of the tax payer

For those answers, ask the Quebec government and/or the family.

Quoting Pyrex (Reply 36):
Again with this meme... when will people understand that depreciation is NOT a tax break, but a legitimate business expense (one which the government forces you to expense over time rather than up-front as it should)? It is called an income tax, not a revenue tax, for a reason.

Who said anything about depreciation?
What the...?
 
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AirlineCritic
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RE: Bombardier To Get Financial Aid From Québec

Fri Oct 30, 2015 4:55 pm

Quoting thekorean (Reply 11):
Good news... Thank you Quebecers for keeping airplane industry more competitve.

What? Yet another industry down the drain, race to the bottom, instead of operating in an actual competitive environment where failures lead to parties exiting the market.

I wonder what all the people who claim (Boeing, Airbus, make our choice) takes too much government aid now say.
 
diverted
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RE: Bombardier To Get Financial Aid From Québec

Fri Oct 30, 2015 5:32 pm

Quoting AirbusCanada (Reply 37):
I don't think Bombardier would become the third largest Jet aircraft manufacturer and one of the largest employer in the country without taking high risk projects.

Do not forget Govt poured plenty of money in Canadair and DHC when they were owned and operated by them, still failed to turn them into self sustained profitable business.

This is an ineradicable achievement considering the fact that domestic/military market for Bombardier Aerospace product is practically non existent. They had to compete with the Koreans, Japanese, Russians, Chinese, Europeans and Brazilians, most of whom had access either large domestic/military market and in some cases unlimited government funds.

Not this again. Bombardier has for the most part, been very risk averse. Risk? Look at the E-jets. That was a risk for EMB. And who would have thought, they did it for a cool $1B. So far, I've seen the figure $4.4B thrown around for the Cseries. Risky? Absolutely. But stop claiming that they've engaged in a ton of high risk projects. Unless you consider stretching the CRJ to form a CRJ-1000 for 2 customers risky.

Things like this are the reason BBD is so far behind the 8 ball.

I'm curious as to your figuring of how Bombardier's domestic demand is non existent. QK is the largest BBD operator in the world. PD flies Q400s. WS encore flies Q400s. Tons of smaller airlines fly older dashes around. Furthermore, BBD's Military Aviation Services had the maintenance and training contract for the CF-18s. Buuuut, then they sold it, to an American company for $90M.(Spar aero, a division of L-3 communications). Then in 2015 they sold the training portion to CAE for $19.8m. A business that more or less only existed because of the government giving them the contract. So why should tax dollars go to prop them up again?
I may not have all of that information 100% correct, just what I've found online.
So to say Bombardier's domestic and military market is practically non existent is a huge stretch. Also, the P8's little brother is based on a BBD frame.

Bombardier has had a TON of opportunities and has consistently screwed them up. Their execution on the Cseries is no different. From lying about the timeline until just about the day they announced a delay. Failing to adequately reinvest in their business once the writing was on the wall for the CRJ's. Taking on too many bizjet programs at the same time and nearly crippling the commercial arm. It goes on and on.
 
AirbusCanada
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RE: Bombardier To Get Financial Aid From Québec

Fri Oct 30, 2015 5:48 pm

Quoting diverted (Reply 41):
Not this again. Bombardier has for the most part, been very risk averse. Risk? Look at the E-jets. That was a risk for EMB. And who would have thought, they did it for a cool $1B. So far, I've seen the figure $4.4B thrown around for the Cseries. Risky? Absolutely. But stop claiming that they've engaged in a ton of high risk projects. Unless you consider stretching the CRJ to form a CRJ-1000 for 2 customers risky.

Things like this are the reason BBD is so far behind the 8 ball.

Bombardier is much more than CRJ .

List of high risk projects taken by bombardier:

Global express.
Learjet Acquisition.
DHC Acquisition.
Short Acquisition.
Challenger 300
Q400
CRJ
Cseries.
Lear 85
Global 7000/8000 upgrade.

Quoting diverted (Reply 41):
'm curious as to your figuring of how Bombardier's domestic demand is non existent. QK is the largest BBD operator in the world. PD flies Q400s. WS encore flies Q400s. Tons of smaller airlines fly older dashes around. Furthermore, BBD's Military Aviation Services had the maintenance and training contract for the CF-18s. Buuuut, then they sold it, to an American company for $90M.(Spar aero, a division of L-3 communications). Then in 2015 they sold the training portion to CAE for $19.8m. A business that more or less only existed because of the government giving them the contract. So why should tax dollars go to prop them up again?
I may not have all of that information 100% correct, just what I've found online.
So to say Bombardier's domestic and military market is practically non existent is a huge stretch. Also, the P8's little brother is based on a BBD frame.

Q400 is the only platform that found a substantiate market in Canada with all three major Canadian airlines flying them.
However, it is still not substantial enough to make the program profitable.

As for military contract, if you think contract worth less than $100 million spreading over decades makes any difference for a $20B/Year company?

Bombardier's domestic and military market is non existence because BBD exports over 95% of their product outside Canada.
 
diverted
Posts: 1301
Joined: Sat May 17, 2014 3:17 pm

RE: Bombardier To Get Financial Aid From Québec

Fri Oct 30, 2015 6:09 pm

Quoting AirbusCanada (Reply 42):
List of high risk projects taken by bombardier:

Global express.
Learjet Acquisition.
DHC Acquisition.
Short Acquisition.
Challenger 300
Q400
CRJ
Cseries.
Lear 85
Global 7000/8000 upgrade.

I'd argue the only real high risk here is the cseries, and maybe the Challenger 300
Global express-Basically a CRJ/Challenger fuselage with Br-710s, new wing and new tail, and some avionics.
Shorts-they took an aircraft manufacturer and now they make wings and missiles IIRC.
Challenger 300- clean sheet bizjet
DHC-bough from Boeing, already had a portfolio of profitable aircraft. Of these, BBD sold of the type certificates to most of them to Viking a few years ago. They stretched the dash, put on new engines and gear etc. to make the -400, and then they killed the 1/2/300
Q400-See above. A derivative program
CRJ-stretch x 4 of the Challenger
Cseries-clean sheet
Lear85- Dead... after tossing a ton of money down the drain
Global 7000/8000-upgrade of the GX with Passports and more range.

Quoting AirbusCanada (Reply 42):
Q400 is the only platform that found a substantiate market in Canada with all three major Canadian airlines flying them.
However, it is still not substantial enough to make the program profitable.

As for military contract, if you think contract worth less than $100 million spreading over decades makes any difference for a $20B/Year company?

Bombardier's domestic and military market is non existence because BBD exports over 95% of their product outside Canada.

Well I guess QK operating 127 BBD products isn't substantial. Nor is PD and Encore's Q400 flying. If "it is not substantial enough to make the program profitable" then maybe they should sell some more somewhere else? Seems ATR has had no problem selling ATR72's worldwide. Nor has Embraer had any issue selling Ejets.

And no, I'm not suggesting that a $100M military contract is a huge cash cow. But hey, when the government tosses you a contract, the smart thing to do is sell your business....or at least that was the BBD logic.

Perhaps Bombardier would have better luck selling the Q400's if they actually did something about after service support. There's numerous issues with that aircraft that Bombardier refuses to fix. They've worked with QX regarding their in service reliability (and in fact took two frames from them and cut them up) but haven't had any major PIP's that I know of.

Anyways, I still hope the Cseries is successful. It's a neat looking plane, and has potential. I'm not privy to any discussions, but if I were Bombardier, I'd do just about anything to secure a big order, including selling the frames at a significant loss. However, from what we're hearing, they seem unwilling to do that, and hence the black cloud hanging over the program.
 
planemaker
Posts: 5411
Joined: Mon Aug 25, 2003 12:53 pm

RE: Bombardier To Get Financial Aid From Québec

Sat Oct 31, 2015 12:43 am

Quoting diverted (Reply 41):
Not this again. Bombardier has for the most part, been very risk averse.

  

Quoting diverted (Reply 41):
I may not have all of that information 100% correct, just what I've found online.

There is a lot of BBD mythology out there but what you posted is pretty acurate.

Quoting diverted (Reply 41):
Bombardier has had a TON of opportunities and has consistently screwed them up. Their execution on the Cseries is no different. From lying about the timeline until just about the day they announced a delay.

   And everybody on here bought those lies repeatedly - hook, line and sinker.

Quoting diverted (Reply 43):
if I were Bombardier, I'd do just about anything to secure a big order, including selling the frames at a significant loss. However, from what we're hearing, they seem unwilling to do that, and hence the black cloud hanging over the program.

Big problem with that, the CSeries has to start turning a profit and A & B will keep BBD always on their back heals with their pricing and package deals.

Quoting diverted (Reply 43):
I'd argue the only real high risk here is the cseries, and maybe the Challenger 300

Different type of risk as BBD did not bet their money on the entire program but roughly only one third as governments and partners pitched in the rest.

Quoting diverted (Reply 43):
DHC-bought from Boeing, already had a portfolio of profitable aircraft.

Boeing was going to sell DHC to ATR but the Federal Goverment stopped the sale. So a convoluted deal was struck where Boeing (after having originally paid $155-million) sold 49% of DHC to the Government of Ontario and 51% to BBD for $100 million total. The Federal and Provincial governements then provided nearly $500 million in subsidies to BBD.
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
 
Viscount724
Posts: 19316
Joined: Thu Oct 12, 2006 7:32 pm

RE: Bombardier To Get Financial Aid From Québec

Sat Oct 31, 2015 4:38 am

Quoting queb (Reply 33):
Quoting Viscount724 (Reply 30):
and it has almost all been repaid. See Reply 28.

No, the federal government lost about $3,5 B with GM bailout.

http://www.theglobeandmail.com/repor...out-of-auto-firms/article23828543/

Depends what they consider in that $3.5 billion number. I expect that only considers what was paid back by GM, but not the impact on tax revenues if GM in Canada had gone out of business and their thousands of workers been thrown out of work. And not just income taxes but the many other taxes (GST etc.) they wouldn't be paying on purchases they wouldn't be making if they lost their jobs. And apart from the lost tax revenues there would have been huge federal unemployment insurance payouts.

[Edited 2015-10-30 22:12:27]
 
neromancer
Posts: 70
Joined: Sat Feb 07, 2015 11:23 pm

RE: Bombardier To Get Financial Aid From Québec

Sat Oct 31, 2015 5:10 am

Quoting Viscount724 (Reply 45):
Depends what they consider in that $3.5 billion number. I expect that only considers what was paid back by GM, but not the impact on tax revenues of GM in Canada had gone out of business and their thousands of workers been thrown out of work. And not just income taxes but the many other taxes (GST etc.) they wouldn't be paying on purchases they wouldn't be making if they lost their jobs. And apart from the lost tax revenues there would have been huge federal unemployment insurance payouts.



Very true. I'm an aviation enthusiast but I've worked for many years in automotive. The Canadian/Ontario government bailout was both in loans and stock. GM paid back it's loans in full with interest to both the Canadian and Ontario governments. The Canadian government lost money on it's stocks simply because of a political decision to sell to balance the Federal books in the last fiscal year.

As for this BBD deal. If this was a venture capitol fund making this investment nobody (except planemaker) would be complaining. The only problem people seem to have is that this is a government making the investment.

With BBD writing off the development costs it now free's them up to offer much more aggressive pricing on the C-Series. If BBD can secure several new strong customers then this might actually pay off for the Quebec government in the long run even from and investment standpoint. Not withstanding the tens of thousands of people employed by BBD in Quebec and related services and suppliers.

Some people seem to forget Boeing too took a big write down on the 787 program.
 
Amiga500
Posts: 2645
Joined: Tue Mar 03, 2015 8:22 am

RE: Bombardier To Get Financial Aid From Québec

Sat Oct 31, 2015 3:28 pm

Quoting Neromancer (Reply 46):
The only problem people seem to have is that this is a government making the investment.

I've no problem with the govt making an investment.

I do have a problem with the board going unpunished for their ongoing mistakes.
 
planemaker
Posts: 5411
Joined: Mon Aug 25, 2003 12:53 pm

RE: Bombardier To Get Financial Aid From Québec

Sat Oct 31, 2015 4:05 pm

Quoting Neromancer (Reply 46):
As for this BBD deal. If this was a venture capitol fund making this investment nobody (except planemaker) would be complaining. The only problem people seem to have is that this is a government making the investment.

I never complain.... just warn.  

Warn from the very beginning that BBD is a very poor investment. Just ask the latest equity investors how they are doing (hint: they bought $1.2 billion of shares in Feb at... $3.25/share. As of Friday the shares closed at $1.42 - and the bump was due to the Quebec bailout).

Taxpayer money continues to enrich a family that has sucked hundreds of millions from the public treasury. And what is worse is that the Quebec government had to borrow the money to "invest".

Quoting Neromancer (Reply 46):
If BBD can secure several new strong customers then this might actually pay off for the Quebec government in the long run even from and investment standpoint.

It will never payoff for the Quebec government because the biz plan has always been fundamentally flawed.

Quoting Neromancer (Reply 46):
Some people seem to forget Boeing too took a big write down on the 787 program.

No one has forgotten.... just not relevant to BBD's situation.
Nationalism is an infantile disease. It is the measles of mankind. - A. Einstein
 
Amiga500
Posts: 2645
Joined: Tue Mar 03, 2015 8:22 am

RE: Bombardier To Get Financial Aid From Québec

Sat Oct 31, 2015 8:59 pm

http://www.bloomberg.com/news/articl...h-on-1-billion-cseries-jet-bailout


Ottowa to match Quebec in $1b investment in the CSeries "company".

Quote:
Quebec plans to ask Canada’s federal government to match the province’s $1 billion investment in Bombardier Inc.’s CSeries program to round out the funding for the troubled jet and assuage any lingering customer concerns.

“If the federal government comes in, the notion of risk completely changes,” Economy Minister Jacques Daoust said Friday in a telephone interview from Montreal. “If the federal government also put in $1 billion, that would mean the CSeries financing package would be complete.”

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