the other badly-scuffed shoe loudly drops:
Quebec to Seek Canada Match on $1 Billion CSeries Bailout
- Federal aid would complete Bombardier funding, Daoust says
- Economy minister likens assistance to 2009 automaker rescue
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 [Oct. 30] 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.”
His comments underscored Quebec’s determination to prop up the marquee aircraft model at Montreal-based Bombardier, which has been draining cash amid missed deadlines, cost overruns and scant interest among major airlines. Bombardier said Thursday that the jet will need an additional $2 billion during the next five years.
In specifying a figure, Daoust also made clear Quebec’s expectations about the extent of federal aid as incoming Prime Minister Justin Trudeau’s Liberal Party takes office next week. Bombardier assistance would be studied once the new leadership is in place, party spokesman Dan Lauzon said Thursday.
Quebec leaders have championed Bombardier because of the company’s central role in the province, and the package also includes a potential equity investment of as much as C$442 million ($336 million). Daoust said the federal government needs to act, too, as it did in helping bail out General Motors and Chrysler as part of their 2009 bankruptcies.
“We are going to ask them to support the aerospace industry in Quebec the same way they backed the auto industry in Ontario when times were difficult,” Daoust said. “This will be a profitable transaction for everybody.”..
The existing money-pit:
…According to Industry Canada, Bombardier still has significant outstanding loans it must repay to Ottawa.
“From 1966 to date, Bombardier has repaid $543-million of the $1.3-billion received,” Industry Canada spokesman Derek Mellon said on Friday…
It is hard to imagine the [federal] Liberals saying no to Bombardier after the party won 40 Quebec ridings in the recent federal election, running on a platform that emphasized fiscal stimulus to help weak economic growth…
The last major joint investment between Ottawa and a province was the auto sector bailout of 2009. Ontario and the federal government invested $13.7-billion to keep Chrysler and General Motors afloat, but recouped only about $10.2-billion.
Meanwhile the Globe and Mail, in an editorial, seems to think the feds could contribute effectively actually to running the company:
Bombardier is perhaps too big to fail [aaarrhg!]. But it should no longer be handed cash without having to relinquish control. If Ottawa wants to get involved, it must demand changes at the top, or have a real say on the board. Any other course would not be proper guardianship of the public’s money.
Yikes! Any government in Ottawa? The problem is the constant drip, drip, drip and then demand for a waterfall of the public’s money. More background:
Bombardier and its state aid from Quebec: How did it come to this?