Tuesday 22 May 2018

Bombardier seeking outside help as US trade tariffs bite

A demonstrator in support of Bombardier workers at the UK’s Houses of Parliament
A demonstrator in support of Bombardier workers at the UK’s Houses of Parliament

Eyk Henning

Bombardier is seeking investors for its aerospace businesses and considering a sale of some operations, as a turnaround plan at the Canadian planemaker faces pressure from potentially crippling US trade tariffs.

Bombardier is Northern Ireland's biggest industrial employer and a lynchpin of the Belfast economy.

The Montreal-based manufacturer is studying the disposal of assets, including its Q400 turboprop and CRJ regional-jet unit, sources said.

Airbus SE is among the suitors, they said, with one person saying that Bombardier was also open to partnerships with other aerospace companies.

Asset sales or investment deals in aerospace would raise money for Bombardier as it contends with newly imposed import duties of 300pc on its C Series jetliner in the US, the world's biggest aviation market.

Bombardier also missed out on a merger of its rail-equipment business with Siemens AG's operation after months of talks. Deals on the Q400 or CRJ may add life to languishing products, an analyst said.

"Bombardier has neglected these products for so long," said Richard Aboulafia, an aerospace consultant at Teal Group. He said the Q400 may have an easier time finding a buyer than the CRJ line, adding: "These should be worth more and should be more desirable."

The Q400 competes with planes made by ATR, which is owned by Airbus and Leonardo. Bombardier's regional jets go head to head with aircraft built by Brazil's Embraer.

Bombardier and Airbus, whose earlier talks on a potential business collaboration fizzled in 2015, declined to comment. No final decisions have been made and Bombardier deliberations with potential partners may not lead to any transactions, the sources said.

Bombardier CEO Alain Bellemare is trying to stop a cash drain after the C Series came to market behind schedule and $2bn (€1.7bn) over budget.

The delays and cost over-runs prompted Bombardier to accept a $1bn investment from Quebec, which sparked the US to impose a 300pc tariff on the planes, claiming Bombardier had sold them below fair-market value, thanks to the subsidy. (Bloomberg)

Irish Independent

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