What about China, Boeing, Airbus, Eurofighter, SAAB, Dassault and Bombardier – All in the same article, I've done it!
(Version en Français) - For most of you, I guess, this will probably generate many more questions than answers
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00:01 (05:01 UTC) - November 10, 2017 - Quebec, Canada
by Sylvain Faust, Fliegerfaust.com
A few things , -- rumors if you wish or call them gossips, if you may--, tidbits so to say came to my ears that I will now be sharing with you.
For most of you, I guess, this will probably generate many more questions than answers.
The "deal" between Airbus and Bombardier regarding the CSeries aircraft program amounts to a real game changer -not only in the commercial aircraft field but also in the highly specialized ball park of military equipment, where the Canadian government will now have a rather unique opportunity, at long last, to leverage its aerospace related spendings.
Canada is already busying itself examining various scenarios to reorient its military procurement philosophy, totally shifting from the traditional purchasing of almost everything from its closest and mighty southern neighbour, to "buying it all" from Europe. In this new state of affairs, Boeing might have been the principal culprit, call it an agent provocateur if you wish, with its unjustified complaint against Bombardier and its CSeries aircraft, but the NAFTA renegotiation was to become the final nail in the coffin.
The apparent shift in mentality in Ottawa started well before Boeing officially filed its frivolous trade complaint against Bombardier and its CSeries. Firing this salvo, Boeing was thus saying "Never Again" rather loudly, trying to prevent what it perceived as the reedition of a decades old humiliation when, against all odds, Airbus succeeded in setting foot in North America. In 2016, Boeing also managed to stop Bombardier in a bid with United, again not to let another player enter the exclusive North American ballpark… quite a great way to promote innovation, right?
In fact, as we can tell, Ottawa was already "having a good relationship with Airbus". Recently, the Canadian government managed to help Airbus in providing a unique information that the other bidders did not get, and Airbus won the new Search and Rescue Aircraft contract with its bid for the C-295. Results were made "public" in December 2016. But more on this, later.
As you now know, while desperately looking for a way to save its CSeries program Bombardier's top management entered more intensively into negotiations with some Chinese partners. What I've been told that COMAC was in advance negotiation with Bombardier to acquire the CSeries, or, enter in some sort of co-ownership.
Back in August, I published the list of airlines Bombardier was to visit during its World Tour demonstrating its CSeries. It was leaving Mirabel, Quebec and flying west only all the way back to Mirabel, thus circling the globe. http://www.fliegerfaust.com/cseries-world-tour-247...
In that list you see the name of four (4) Chinese airlines.
On September first I then published the list of airports where Bombardier was to bring its demo CSeries aircraft (CS300, msn 55002 aka FTV8). http://www.fliegerfaust.com/cseries-world-tour-par...
In that list you see four (4) Chinese airports.
On September 26 the tour started. The demo CSeries aircraft left Mirabel and went to Asia via Alaska.
It never went to China. What happened? What Changed? Why in the world?
As you remember Bombardier dealings with Airbus started "again" around August and did progress from there. The Canadian government directly contacted Bombardier and "suggested" not to deal with China about the CSeries, but to deal with Airbus instead.
Is the picture getting any clearer now? Is the fog of war finally lifting?
"From the federal government's point of view, anything was better than a link-up with China," according to an Ottawa source. The source also said the government suggested to Bombardier that CEO Alain Bellmare should reach out directly to his counterpart at Airbus, Tom Enders. http://www.cbc.ca/news/business/c-series-bombardier-airbus-1.4370696
Could we assume any of this happened in July? Or even August?
I'm told Ottawa officials had to pay a visit to the Chinese Ambassador to Canada in Ottawa after this… Saying what? "Oops, we're sorry, we love you, but…"? You have to know that Justin Trudeau is talking about having a Free Trade deal between China and Canada. https://beta.theglobeandmail.com/canada/justin-trudeau-on-potential-for-canada-china-free/video8806be44-7261-46c8-a3ef-51dd5d6f4dcb/
I'm also told part of the deal with China COMAC, cancellation of the C919 program (put on hold) and a strong drive of the CS100, CS300 and CS500 right away was to be coming. We know the C919 is facing many problems; it gained too much weight to be a really an efficient aircraft. Bombardier has been helping COMAC for years with issues with its wing and more… A new CSeries assembly line was to be added in China and large orders from China were to be announced too as part of the "new package", so, good work in Mirabel too (for how long?)
Was this the "major" reason for the CSeries World Tour, to go to China? Sounds like it was just that if you ask me, what do you think?
Since the deal with Airbus has been announced, the Chinese came to visit Bombardier at least twice.
Is China still trying to get the CSeries by offering something more interesting than Airbus? No idea. I'm told Bombardier is asking China tangible large CSeries orders to pursuit any partnership. Bombardier is also asking to produce parts of better quality before thinking of expanding the scope of work done in China related to the CSeries.
Did you know, it is basically 50 times less expensive to get something made in China than made in the UK, the USA or Canada? I can't believe a Free Trade with China is something Justin Trudeau wants… or say Bye Bye to your job? https://beta.theglobeandmail.com/canada/justin-trudeau-on-potential-for-canada-china-free/video8806be44-7261-46c8-a3ef-51dd5d6f4dcb/
Negotiation for letting go the Q400 program is going on from what I'm told, an aircraft Bombardier losing money with at each delivery, as Alain Bellemare Bombardier CEO keeps repeating to his employees. Also, Bombardier offered to include the LearJet business with it. Anyone saw any Chinese representatives in Montreal last week?
In such a transaction, where China could be taking more responsibilities in the construction and assembly of the Q400, could Bombardier offer the existing Downsview/Toronto Q400 workers a job in the expanding Global aircraft program? Both aircraft assembly lines are located at Bombardier facility at Downsview airport, Toronto, Ontario.
From what I hear the Global 7000 is a huge success already! Could Bombardier be planning to expand its production facilities, taking more of the space currently assigned to the Q400?
Or would Bombardier shut down its Dowsview facility completely transferring it all to Montreal where each Global aircraft interior is installed? The cost of having the aircraft built in Downsview and subsequently ferried to Montreal for completion is not negligible I'm told. I'll have more on this soon. Cost cutting, efficiency! Bombardier would also be either receiving money for the sale of its Downview ownership or by renting the Toronto expensive space no longer in use, mainly concentrating its aerospace operations in Montreal and Wichita?
Bombardier had some additional hangar rented from Air Canada, if I'm not mistaken, next to their existing facilities at Montreal-Trudeau Airport where the Global aircraft are being completed but not assembled still.
Could the Challenger 300 assembly be sent to Wichita making more space? This is not a new idea I have to remind you. Determinedly, Bombardier is making space at this moment in Montreal.
- In case you did not know, during last quarter Bombardier Commercial Aircraft delivered four (4) Q400 aircraft and seven (7) CRJ. Bombardier Business Aircraft delivered 31 aircraft, profit of 9%, while ramping up the Global 7000 production and completing its certification. Bombardier Commercial Aircraft posted a loss of 18%. I wonder how much profit and money each CRJ delivery is providing Bombardier with.
Back with Ottawa - Boeing, then NAFTA… It was too much!
Boeing stirred up something they did not really expect to boil over for sure. Remember when I was the first to report (June 14, 2017) that Boeing was not invited (read "excluded") to the usual events held by the Canadian Ambassador to France in Paris during the Bourget extravaganza last summer? http://www.fliegerfaust.com/byebye-boeing-defence-blacklisted-by-the-government-of-canada-not-invi-2449631089.html
When I also reported (July 25, 2017) that Boeing lost not only the Super Hornet deal with Ottawa, but also the P-8 Poseidon aircraft deal that was well advanced, replacing the Canadian CP-140 Aurora aircraft? http://www.fliegerfaust.com/boeing-lost-military-contract-canada-2464934125.html
Since, it just got worst for Boeing losing 100% of its political support in Ottawa, but not just for Boeing but also for the other US military suppliers to Canada. Why? Boeing trying to kill the CSeries added to NAFTA going nowhere simply was too much. Ottawa politicians could not lose face so blatantly in front of their constituents. I suppose these same politicians could not be taken for granted as much as some of the people south of the Canadian border would have assumed.
New Friends - Europe did jump on this great opportunity! That included the CSeries.
Remember CETA? The Canada-European Union Comprehensive Economic and Trade Agreement. A perfect timing for Ottawa and Europe.
As I already pointed out in a previous article, this was the "Trigger" for a broad new relationship between Canada and the European military aerospace complex. http://www.fliegerfaust.com/canada-cf18-replacement-2498328640.html
What a great timing when Canada is about to replace its entire CF-188 (aka CF-18) fighter jets, in fact, more jets that was announced at the beginning (Ottawa is trying to get to 2% of its GDP in military investments as press by the US… but oops, the spending will not be going to the US). We're talking of a minimum of 88 new fighter jets… with expenses approximating $65 billion. I can't stop thinking about Boeing and its complaint on Bombardier for its 75 CSeries order of about $1.2 billion that started this all… "Penny Wise Pound Foolish" as the saying goes in England.
Ottawa is about to release the request for proposal (RFP) for the CF-18 replacement. They have been at work for the last few months defining the "new" requirements for its new fighter jets, - i.e. the CF-18 replacement Ottawa is contemplating. Has anybody yet tried to influence those requirements, else distort the evaluation mechanism? I wouldn't be surprised… I'm also told that Ottawa is hard at work planning around so to not order any F-35 Lightning II from Lockheed Martin or a bare minimum.
The prime contract contenders will be SAAB Gripen, Dassault Rafale and Eurofighter Typhoon (BAE/Airbus…). There might also be an entry from the US but I would say this would be window dressing. Expect all these candidates to also offer deep and large investments in Canada in return to getting this contract, i.e. jobs!
What do politicians want when election time is coming… Good news! Jobs! Foreign investments!
Would you also be surprised at all if you learned Bombardier was negotiating with Ottawa and Airbus to become the prime contractor orchestrating the delivery of the Eurofighter Typhoon to the Royal Canadian Air Force? Not me… Not at all… Boeing… what have you done to your country? Or should I say "Canada and Europe want to thank you!"
This past spring, as I said earlier, Airbus already managed to win the Search & Rescue aircraft contract for the replacement of the old "made in Canada" Buffalo CC-115 and some CH-130 Hercules. Airbus sold to Canada its C-295 SAR, a $4.7 billion contract. Funny when all the bidders (but Airbus) were told the budget was only $3.4 billion. http://nationalpost.com/news/politics/search-and-rescue-aircraft-budget-jumped-more-than-1-billion-but-dnd-didnt-tell-bidders
Here is more information on the radar Canada selected to be installed in their 16 new Airbus C-295 http://www.deagel.com/news/Canadian-C-295-Maritime-Surveillance-Aircraft-to-get-ELM-2022A-Radar_n000017097.aspx
And Canada has other purchases to make. Like I've mentioned earlier the CP-140 Aurora needs a replacement. Many solutions exist using Canadian made aircraft from Bombardier as platform. Some are built using the Bombardier Q400, others the Bombardier Global 6000. More about these here in my October 19 article http://www.fliegerfaust.com/canada-cf18-replacement-2498328640.html
I now keep my fingers crossed and hope Ottawa does the "right" thing by selecting an European or Israeli solution built on a Canadian made aircraft.
I'm told an intermediate solution is currently being worked on by some civil servants in Ottawa to modify the existing new contract to Airbus to swap two (2) of those sixteen (16) C-295 SAR (search and rescue) equipped aircraft for the C-295 MPA (maritime patrol aircraft). This would allow doing some of the equivalent work the CP-140 Aurora is doing. But two is not enough, as Canada operates fourteen (14) Aurora. Those two (2) C-295 MPA could be used for general maritime surface reconnaissance (detecting drug operations, smuggling of illegal immigrants, fisheries protection patrols, pollution monitoring, etc.), search-and-rescue assistance and Arctic sovereignty patrols. Thus, another solution (aircraft) will have to be contemplated because the C-295 MPA lacks the heavy and sensitive anti-submarine warfare capability as well as the anti-surface warfare fittings of the CP-140 Aurora. A faster aircraft with more range would be necessary. CP-140 (750 km/h - Range: 9,300 km) vs the C-295 MPA (480km/h – Range 5,630 km)
Airbus is hard at work in Canada (Ottawa) as you can see.
Could Ottawa then show its True Colors and go for a Canadian based Aircraft solution for the replacement of the Aurora CP-140 aircraft fleet? Let me say it "again"… Fingers Crossed! Express you concerns to your politicians, tell them you are following this file and won't understand why a Canadian Aircraft based solution could not be selected when other countries do! No small countries, if you may, the UK (Sentinel aircraft) https://www.raytheon.com/capabilities/products/sen...), the US (BACN aircraft https://en.wikipedia.org/wiki/Battlefield_Airborne...)...
Canadians are watching
Boeing bullying Ottawa, the NAFTA negotiations going South (literally), the Airbus CSeries transaction with Bombardier, with all this being widely displayed in the Canadian media , have fundamentally expanded the interest of the Canadian citizens in regard to what their politicians in Ottawa are doing, where they are spending when it comes to Canada's aerospace sector and defence military equipment. Why not Canada First?
And last but not least, from what I'm told, Ottawa is preparing to issue a "sole source contract" for a minimum of two Bombardier CSeries aircraft. This is related to the ongoing NAFTA negotiation (or lack of) with the US.
Will I finally get a picture of Justin Trudeau in a CSeries?