Mark Collins – Trying to Keep Bombardier Q400 Turboprop Competitive

Further to this post (with relevant links),

Bombardier Q400 Turboprop Hitting Some Fans Too

a sensible deal has been struck between the union and the company–but the airliner may just be a bit too good for its own sales good (full text subscriber only):

Toronto employees drop opposition to Bombardier outsourcing

Workers at the Bombardier Q400 factory in Toronto have agreed to the company’s request to shift production of the plane’s wings and cockpit to low-wage countries, a move that will eventually eliminate 200 jobs.

The workers at the plant originally rejected the request last fall to outsource wing assembly to Mexico and cockpit production to China.

But members of the Unifor local that represents workers reversed their decision after their bargaining committee negotiated more attractive retirement packages from Bombardier Inc. than the aircraft maker offered when it first brought up the idea.

The proposal to shift production arose again in March [see post linked to above] as Bombardier was in discussions with Ottawa over the federal government joining its Quebec counterpart as a strategic partner in the company’s C Series jet program, which is $2-billion over budget and more than two years behind schedule.

The negotiations about taxpayer money for the C Series have put the Montreal-based transportation giant at the centre of a national debate on the merits of governments providing public money to private enterprise [lots more here] – a debate that intensified when the proposal to shift Q400 jobs out of Canada came up again…

“We see this as a positive step toward the long-term viability of the Q400 aircraft,” Ms. de la Barrera said, noting that final assembly of the turboprop will continue in Toronto. “Bombardier needs to find ways to make its products more competitive for long-term success in a very competitive marketplace.”..

The smaller turboprop Q400 is in a different segment of the commercial airplane market and has had a successful history as the workhorse for Toronto-based Porter Airlines Inc. Calgary-based WestJet Airlines Ltd. has made the plane the mainstay of its Encore regional network.

Sales have been surpassed, however, by its main rival, the [ATR 72] 600 series produced by Europe-based consortium ATR.

ATR has booked 226 orders for its turboprop in the past two years, more than three times the 65 sales recorded by Bombardier [see also here (Asia/Pacific) and here (US)]. The Q400 list price of $31-million (U.S.) is estimated to be as much as 30 per cent higher than the price of the ATR plane.

Bombardier has largely failed to persuade customers outside North America to pay more for the plane’s extra speed, size and technology [emphasis added], prompting chief executive Alain Bellemare to declare last October, “We need to bring the costs down so we can bring the price down.”..

Workers at the plant perform final assembly of the company’s Global Express 5000 and 6000 business jets and are scheduled to work on the longer-range 7000 and 8000 models of those jets, which are under development [more here].

Tough commercial aircraft market, eh?

Mark Collins, a prolific Ottawa blogger, is a Fellow at the Canadian Global Affairs Institute; he tweets @Mark3Ds


5 thoughts on “Mark Collins – Trying to Keep Bombardier Q400 Turboprop Competitive”

  1. Meanwhile Viking Air buys the water bomber program:

    More on Viking Air–surely new gov’t could consider this?

    “Why Not Just Buy New-Build Viking Air Twotters for RCAF?”

    Mark Collins

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