Feds Taking Into Account Possibility Bombardier May Outsource Jobs

TORONTO — The federal government is taking into account the possibility Bombardier may outsource jobs when determining whether to give as much as US$1 billion to the aerospace manufacturer for its CSeries planes, Economic Development Minister Navdeep Bains said Wednesday.

 

"This is part of the business case evaluation," Bains said after giving a speech to the Toronto Region Board of Trade.

 

Bombardier's request for support for the CSeries aircraft, which the company has had trouble selling, may prove politically awkward for the federal government.

 

The Globe and Mail, citing sources it said were familiar with the situation, reported earlier this week that Bombardier plans to move about 200 Toronto jobs that help assemble the company's Q400 planes to Mexico and China.

 

Bains would not say whether the outsourcing of those jobs would be a deal breaker for federal support, but said the government is taking "a holistic approach" in its evaluation.

 

Bombardier (TSX:BBD.B) spokeswoman Marianella de la Barrera would not confirm the report but said the company is exploring ways to reduce costs of its Q400 planes, including reviewing work packages and supplier contracts.

 

Bains said the federal government's analysis will focus on jobs, a strong Canadian footprint and the long-term success of the company and aerospace sector, suggesting that determining factors could include maintaining a head office, and research and development operations in the country.

 

De la Barrera said Bombardier, which has a head office in Montreal, has strong roots in Canada and that won't change, despite it producing some parts outside the country.

 

Bains did not specify when the government would make its decision, but said it would be "timely."

 

If the government agrees, it won't be the first time Ottawa ponies up cash for Bombardier.

 

The company has received $1.3 billion in repayable contributions since 1966, Industry Canada said last fall, and has repaid $543 million as of Dec. 31, 2014.

 

The Quebec government promised US$1 billion in support for Bombardier last fall.