Canada, UK winners in bid to build new C series

 - October 11, 2006, 7:45 AM

Bombardier signed a series of LOIs last month with the governments of Canada, Quebec and the UK for major manufacturing and assembly sites for its proposed C Series of airliners. The greater Montreal area emerged as the big winner, gaining preferred status as the site of final assembly, while Bombardier’s plant in Belfast, Northern Ireland, took the consolation prize as the preferred manufacturing site for wings, nacelles and composite empennage structures.

Although the province of Ontario and the city of Toronto remain in contention for other components supply business, they certainly suffered a big blow in failing to win the bid for final assembly.

International Selection Process

As part of the selection process, Bombardier reviewed program financing proposals from more than a dozen sites in Canada, the U.S. and Europe, eventually narrowing its choices to four bids from Quebec, Ontario, New Mexico and Northern Ireland. New Mexico dropped out of the competition months ago, leaving Quebec and Ontario as the contenders for final assembly. Due to its limited capacity, Belfast never stood a serious chance on that score, although throughout the selection process it held most-favored-site status for components supply.

Bombardier said the Canadian and Quebec governments’ “competitive partnership offers” tilted the competition for final assembly in Montreal’s favor, as did “the overall favorable economic and manufacturing context.” The company also named as a key factor the new labor agreement forged with Bombardier employees in Dorval in March.

Bombardier estimates the total research and development costs for the C Series will reach $2.1 billion. It expects governments to contribute a third of the costs and to obtain another third from suppliers. Canada and Quebec have promised a total of $262.5 million, while the UK has committed to $340 million in launch investment and financial assistance. Bombardier said it would repay the loans with royalties from each aircraft sold.

On March 15 Bombardier’s board of directors granted authority to offer the new line of single-aisle jets to prospective customers. Industrial launch remains contingent on order commitments and supplier contracts.