As a Québécois, I haven't seen much discussion about the effects of diluting Québec's shares in the plane. The article says our new stake is 19%, down from 49%. I feel we got kind of shafted in the deal, given we bought these shares at a valuation of ~5.5B (for 2.8B) and now Airbus gets a bigger share for free. I don't think this means good news for our investment.
Having a 19% stake in selling 6000 planes (as the article mentions), is worth a lot more than a 49% share in selling 300 planes. Also, Bombardier had to constantly discount the plane and take lower margins just to get airlines to buy, which with Airbus's sales and support network will no longer happen. Plus a lot of the uncertainty of the project has magically gone away.
Very valid point, but I'm wondering if 'assembly' does more to the US to avoid the tariffs on the C-series; does that mean there will be less economic benefit for Quebec? For example, by assembly jobs moving to the US.
They may gain in value of their acquired shares but they may also lose in terms of wider economic output for their province.
It's unlikely that Airbus would switch all manufacturing to the US, so I think Québec is still going to see more jobs generated from building a portion of the 6000 planes than only 300 planes.
Only final assembly of the planes that are sold to US airlines will be done in Mobile. In the Airbus world, final assembly tends to mean bolting together a relatively low number of finished sections that were produced somewhere else. So a lot of the labor will stay in Canada.
Australia, Canada, France, Italy, Japan, Korea, Sweden and ( if RR engines chosen ) UK all send their assemblies to Seattle and Charleston. That's without considering avionics and internal systems.
Hence the wording 'Country of final assembly' on the onboard safety cards, carefully chosen to obscure origins.
To be fair, the Quebec government made their bed in this deal. The original terms were terrible (over valued, highly favorable to Bombardier in both failure and success).
The deal the caisse made with Bombardier, was more aligned with reality. It was highly punitive for failure, and rewarding with success.
Plus the supply chain which also have global value when it's time to acquire parts wherever you are located when the plane breaks down (or just need new parts).
