The finer points of the Bombardier Airbus deal

Ever wondered why suddenly the Canadian government selected Airbus when it was actively courting greater economic ties with China following Trump’s threat of tearing apart and renegotiating NAFTA agreement? This makes an interesting read.

According to five sources familiar with the matter at hand, the Canadian government had encouraged Bombardier to make a deal with Airbus SE for its CSeries jets in order to put an end to any potential adventure with Chinese investors.

Earlier this year, with Bombardier failing to reach an agreement with Boeing Co which would have resulted in the U.S. airplane maker having a stake in its C Series, Canada had signaled its preference for Airbus.

This role played by the Canadian government has not been previously reported.

According to multiple sources, Canadian Prime Minister Justin Trudeau’s administration took a deliberate strategic call in steering Bombardier toward Airbus. While the approach saved a key product for Bombardier and in all probability resolved a brewing trade dispute with the U.S., it came at the cost of improving trade ties with China’s communist regime.

As early as 2015. Bombardier had considered a Chinese partnership after a potential merger talks with Airbus fell apart. As per two sources familiar with the matter at hand, this year after negotiations with Boeing over a C Series partnership faltered and gave rise to the future of the program, Bombardier’s interest with China, once again came to the fore.

The Canadian government’s concerns were related to the possibility that its technological know-how could be “siphoned away” to China which result in long term job losses for Canadians.

Moreover, China’s long standing history of theft of intellectual property also played a significant role in the Canadian government’s decision.

“From the federal government’s point of view, anything was better than a link-up with China,” said a source from Ottawa.

The Canadian government’s efforts eventually led to the October 16 agreement in which Airbus took a majority stake in the narrow-body, medium-range CSeries jets for one dollar.

The decision however drew some flak since following the Trump Administration’s threat of scrapping NAFTA, Ottawa was pushing for closer economic ties with Beijing.

Talks between Ottawa and Beijing are ongoing.

While Bombardier declined to discuss its CSeries negotiations, representatives of Champagne, Bains, and Trudeau declined to comment.

Officials from Beijing declined to comment.

Boeing also declined to comment.

Categories: Creativity, Economy & Finance, Entrepreneurship, Geopolitics, HR & Organization, Regulations & Legal, Strategy

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