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Bombardier: A 'no brainer' investment or a 'house built on quicksand'?

Published: 18 February 2016

With the announcement that Bombardier will be cutting 7,000 jobs over the next two years as it faces declining revenues and a net loss, the spotlight is now firmly on the federal government and whether it will heed the aerospace company's plea for more money.

But where some analysts see the Montreal-based firm, with its 64,000 global workforce, as a prudent investment in an important Canadian industry, others believe it may be time for Ottawa to turn off the government money tap.

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Karl Moore, associate professor at McGill University's Desautels Faculty of Management, praised the CSeries as the "latest and greatest" in terms of superior technology, fuel efficiency and comfort.

"This is a great product where there's a big need in the market place," he said.

He also said that government funding for Bombardier should not be viewed as a handout, but as the kind of appropriate government support to match what other governments do for their own aerospace industries around the world. 

"In this industry, when you look at their global competitors, they're all being subsidized," Moore said.

Bombardier has been a "reasonably good investment", he added, and has paid back much of its government funding and generated thousands of jobs and tax revenue from both the company and its employees.

"Bombardier's been a very good thing for Canada to have, so it's worth it to us as Canadians giving some of our tax money to them."

Read full article: CBC News, 18 February, 2016

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