Canada’s aerospace giant, Bombardier, announced last week that it intends to spend $200 million to facilitate the transfer of an aircraft parts manufacturing plant to Mexico. Financial analysts have applauded the cost saving measure as a sound business decision. The province of Quebec is not amused, however, after providing tax incentives to the company. As well, Canadians across this land should be outraged that a company that has had its hand in the trough of public money to the tune of billions of dollars would now see fit to throw Canadians out of work.
Bombardier has promised not to layoff any workers until 2007. That is just not good enough. The workers affected are represented by Local 712 of the International Association of Machinists and Aerospace Workers. Local president David Chartrand says he is worried about the long term implications of this move. “Aerospace is the future. And if the future of aerospace is in Mexico, then we’re going to have a major problem down the road.”
Starting in May 2006, the factory in Queretaro will begin to produce wiring assemblies. Later in the year, it will start to manufacture structural components now being made by third parties. That is not as far as the ball will roll, however. Bombardier has confided in the Mexican government that their long term plans are to build an aerospace friendly business park, with parts manufacturers coming on board in the near future. This in turn will lead to the loss of further jobs in our country.
It seems that Prime Minister Martin’s pledge to do whatever he had to do to keep our aerospace industry alive has been a shell game. Perhaps when we hand over billions in funding, loan guarantees, and research grants, we should require the company on the receiving end to indulge us a bit. Perhaps a written guarantee that Canadians will be the one’s to reap the fruits of their labour.
On May 13, 2005, Industry Canada posted an article stating that the government of Canada was commited to “advancing the competitiveness of Canada’s aerospace industry, and delivering the benefits…to Canadians.” It further stated that it would provide a contribution of up to $350 million to support aircraft related research and development projects at Bombardier Aerospace.
One paragraph on the site states:
Canada’s aerospace industry is in the top four in the world, and is a key element of Canada’s economy, employing upwards of 75 000 Canadians, and making substantial contributions to communities across the country.
I guess the site will have to be updated frequently over the next two years.
Other bailouts, handouts, and loans include: March 2005, 1$400 million in loans from Canada and $350 million in tax incentives from the province of Quebec to build the new C-series jet in Mirabel, Quebec. January 2001, Canada lends Air Wisconsin Inc. 2$1.7 billion dollars to buy Bombardier product. In 2003, the federal Export Development Corp, or EDC, was given an extra 3$1.2 billion to lend to buyers of Bombardier product. There are 4hundreds of millions more in subsidies and grants stretching from 1982 to 1994. In 2000, the Chretien government lent Amtrak, the giant U.S. railway, more than 5$1 billion so that it would pick Bombardier to build the Acela Express highspeed train, all the while Via Rail had seen its funding cut in half to $178 million.
It seems that the ones taking the ride, courtesy of Bombardier, are you and me.
1 CBC url— http://www.cbc.ca/story/canada/national/2005/03/03/bombardier-050303.html
2 Forbes Magazine url— http://www.forbes.com/2001/01/15/0115faces.html
3 EDC press release via CBC— http://www.cbc.ca/stories/2003/07/24/bombardier030724
4 Canadian Taxpayers Federation url—http://www.taxpayer.com/pdf/Bombardier.pdf
5 Halifax Initiative url—http://www.halifaxinitiative.org/index.php/PressResponses_EDC/146