Bombardier In Talks with Chinese about Q400 Production

 - July 31, 2014, 12:05 PM
Bombardier builds its Q400 exclusively in Canada but hopes to expand its production footprint into Russia and, now, possibly China. (Photo: Bombardier)

Bombardier confirmed on Thursday that it is engaged in discussions with Chinese interests over possible production of the Q400 turboprop regional airliner in that country, presenting it with another option for advancing the program’s geographical presence while political disturbances threaten to disrupt a planned partnership in Russia.

“We have active discussions on the Q400 [in China] on a similar project, but they’re just at the discussion level at this point,” said Bombardier CEO Pierre Beaudoin. “We think there is a big opportunity for turboprops in China, but if you’re going to grab this opportunity you’re likely going to have to assemble a product locally.”

Bombardier already participates in a partnership with Chinese state-controlled Comac, under which the companies collaborate on advancing program commonalities between the C919 and CSeries. Roughly a year ago Bombardier announced it had reached the second phase of the partnership with Comac, under which the companies agreed to work together on areas of the CSeries flight-test activities pertaining to nonflying tasks, implementing and maintaining the common items achieved as part of Phase I, sales and marketing and certain areas of customer services related to training, technical publications and parts distribution.

“As far as discussions with Comac, we continually look together at where we should collaborate in order to create a win-win situation for both organizations, particularly in China, where, for example, they have a service network that we may not have to duplicate with the CSeries,” said Beaudoin.

Speaking during his company’s second-quarter earnings conference call on Thursday, Beaudoin said that while discussions on Q400 assembly with Kremlin-controlled Rostec remain active and have advanced further than any talks with Chinese companies, the Canadian firm continues to watch with keen interest for developments related to economic sanctions placed on Russia.

“We’re monitoring this situation almost on a daily basis and, of course, we’ll obviously respect all of the government sanctions that are being put in place,” he stressed.

Beaudoin added that Bombardier engages in “constant” discussions with the Canadian government, whether they involve the subject of sanctions or otherwise. “For us, yes, we are concerned about what’s going on in Russia,” he said. “We are looking at the effect on our business and how to plan for different scanarios. But in the end it’s the governments that will decide on sanctions and, of course, we’ll respect the guidance that we get from the various governments where Bombardier is active.”