With this move by Airbus, the government's stake in the project was reduced from 49% to 19%. I'm no economist, but it seems that the crisis was avoided?
See: https://www.cnbc.com/2017/10/16/airbus-teams-up-with-bombard...
It certainly isn't a payday for the Quebec government, but I suppose that 19% of something is better than 49% of nothing. One can _still_ criticize the irresponsible handling of taxpayer money AND now (if the manufacturing part is true) the benefits of the original buy-in will not go to Canadian factory workers.
The company they now own 50.01% pays the manufacturing and sales costs, so they're taking on that.
Using Airbus's Alabama factory will mean they can build/sell planes in the US and avoid 300% duty/tariff on those, and (according to the claims) "they'll secure more orders and double the value of the program" - which doesn't seem completely implausible...
Even if that's wildly optimistic, I'd guess even just farming out the 75 plane Delta order to Alabama and saving 220% and/or 300% in duty means a _lot_ of dollars (and cynically, if they were on the verge of losing the whole program, it'd be a super tempting lifeline to be thrown by Airbus...)
given the US [unsurprisingly] imposed 300% duty as a counter measure to the perceived government subsidies, i think the more smart thing would be to buy from Bombardier some military hardware (doesn't matter that it doesn't produce it - it could have bought some very small military contractor) at high-high prices like everybody else does - US/Boeing, EU/Airbus, etc..
Not to pick on the parent statement, but it brings up what I think is an important point: Let's not take these claims by the US government at face value. The US very well may have imposed the duty to help a US company, and used the rest as justification. Economic isolationism/nationalism is an explicit policy of the US government.
I guess the Airbus/Boeing duopoly is here to stay. Bombardier looked like a promising future competitor... They still have their rail business, so all is not lost.
Agreed. It's a loss for Quebec, Bombardier, Canadian workers (who lose jobs to Alabama), Canadian taxpayers, and most importantly, for free trade and free markets - this will only establish anti-competitive policies as an accepted norm, a dangerous precedent.
Not that anyone cares about economics any more; it all seems political.
Wouldn't it have the opposite effect? Quebec subsidized a local industry and lost.
Now Bombardier doesn't have to pay the ridiculous 300% tax. They are subject to less regulations and more free market.
Comac is a promising competitor, too, and are explicitly targeting the bread-and-butter size classes of Airbus/Boeing.
Note well: I do not know if that is the correct interpretation.
"If Airbus’s plan works, it’s ingenious. It will get a 50.1% stake in the C-Series without paying a penny and will collect some cheap warrants on Bombardier’s shares"
https://www.theguardian.com/business/nils-pratley-on-finance...