Canada's loan for Bombardier could boost C Series'
A $372.5m (£225m) Canadian government loan for aerospace giant Bombardier - which employs around 4,500 people in Northern Ireland - will give it time to secure more orders for its C Series jet, it's been claimed.
The Canadian government announced on Tuesday that it would lend the Montreal-based giant $372.5m to help its C Series passenger jet - the wings of which are made in Belfast - and for research and development in Canada on its Global 7000 business jet programmes.
A spokeswoman for Bombardier in Belfast said its staff also makes components for the Global 7000.
Bombardier has already received $1bn in funding from the regional government in Quebec, where the company is based. And the C Series programme also benefited from $350m in loans from the Canadian government when it was launched in 2005.
Bombardier last year announced job cuts of 1,080 over two years in its Northern Ireland operations due to difficult market conditions and weak sales of the C Series - which is trying to break into a market dominated by Boeing and Airbus.
But a spokeswoman for the company in Belfast yesterday said the Canadian cash would not change its job cut plans, which saw 630 people leave the company during 2016.
"We are continuing to execute our turnaround plan to transform our business," she said.
"This means we are taking the actions necessary to ensure we are competitive: improving our cost-structure and efficiencies."
The 2015 launch of the CSeries had been delayed by over two years and was around $2bn over-budget. Orders were also lower than expected, but morale was boosted last April when Delta Airlines placed an order for 125.
The CS100 jet finally entered service with Swiss Air in July last year, while the bigger CS300 also entered service with airBaltic.
Martin J Craigs, a former Bombardier official and chairman of Aerospace Forum Asia Hong Kong, said the loan was good news but did not bring a specific benefit to Belfast.
"Government loans are very welcome, but the customer is king and what the company needs is more orders at the right price," he said.
The company had first asked the Canadian government for $1bn 18 months ago and Mr Craigs said the smaller sum reflected the fact orders had picked up since the first request.
And economist Dr Esmond Birnie of the Ulster University economic policy centre said the money did buy the company time. "This loan assistance from the Canadian central government, over and above that already given by the Quebec provincial authorities, does buy a bit more time to win even more orders for the C Series," he said.
And he said there was nothing out of the ordinary in the government support.
"The manufacture of passenger aircraft is characterised by enormous up-front research costs and all the incumbent players, notably Boeing and Airbus, as well the increasing number of entrants from the emerging economies (eg Brazil and China) have benefited from state aids of some form or other," he added.
"That is why it was always very likely that Bombardier would be looking for a subsidy."
The Canadian government said it was "committed to keeping Canada at the forefront of global leadership in the aerospace sector" and described the loans as "repayable contributions" which will be made to the company over four years.