Subsidy Squabble Heats Up Again
As Bombardier prepares a financial foundation for the proposed launch of a new 115-seat jet, the Canadian company fired the opening salvo in what appears likely to degenerate into a new war of words over government support of aircraft programs. As if to preempt inevitable protests over calls for Canadian government funding of one-quarter of the project’s estimated C$2 billion development cost, Bombardier CEO Paul Tellier said Brazil’s export development bank, BNDES, has financed more than 80 percent of Embraer’s RJ deliveries over the past three years. He compared the figures with support over the same period from Canada’s Export Development Corp., which, he said, financed only 41 percent of Bombardier’s regional aircraft deliveries.
Embraer responded with figures of its own, saying that from 2000 to 2002, its exports amounted to $7.995 billion, of which BNDES financed $2.609 billion of the sales, or only 32 percent of the total. During the same period, it added, EDC “made available” $9 billion to Bombardier customers. Embraer also noted that Tellier’s numbers did not take into account Invetissement Quebec debt and equity guarantees. Finally, it pointed out that none of the $1 billion raised for the development of the Embraer 170/190 program came from public sources.