Bombardier shrugs off tension with China, Saudis
Bombardier Inc. brushed off any concerns that tensions between the federal government and China as well as with Saudi Arabia pose a threat to business jet sales, on which the plane and train maker is staking its financial turnaround.
Relations between Ottawa and Beijing have been strained since Canadian authorities detained Huawei Technologies Co.’s chief financial officer Meng Wanzhou in Vancouver on Dec. 1, which preceded the detention of three Canadians in China in less than one week.
Foreign Affairs Minister Chrystia Freeland previously called attention to human rights issues under the watch of Saudi Crown Prince Mohammed bin Salman, tweeting in defence of a jailed women’s rights activist last August that prompted the young royal to impose sanctions, boot Canada’s ambassador and recall Saudi students from Canada.
Bombardier, which celebrated the entry into service of its Us$73-million Global 7500 business jet Thursday, said the product line is resistant to diplomatic and market fluctuations.
“If we see one region going through geopolitical slowdowns, there are usually other regions that are either coming up or experiencing booms where we can profit,” said spokesman Mark Masluch.
Michel Ouellette, who heads Bombardier’s Global 7500 program — sold out into 2022 — said that customers who signed up many years ago want their aircraft.
The Global 7500, along with the new Global 5500 and 6500, come partly as a response to products from rival business jet manufacturer Gulfstream Aerospace Corp. as demand for the larger jetliners keeps rising.
Bombardier delivered 138 of the 677 business jets shipped by the industry in 2017, securing 20 per cent of the global market, according to the General Aviation Manufacturers Association. That number topped Gulfstream’s 120 business jet deliveries.
Measured by revenue, however, Gulfstream’s market share is higher. The Georgia-based company obtained US$6.56 billion of the US$20.2 billion in business jet sales. Bombardier raked in US$5.14 billion, according to the association.
The Montreal-based company is on track to deliver between 15 and 20 of the planes next year, and between 35 and 40 in 2020, he said.
Despite the manufacturing ramp-up that implies, some of the 3,000 workers Bombardier announced it will lay off over the next year and a half will be cut from the business jet unit, Ouellette said.
The company is “still evaluating ” where exactly those cuts will occur, he added.