Quebec and Boeing

[golden hawk]

http://www.theglobeandmail.com/servlet/ ... tory/Front

Quebec quarrel delays aircraft delivery
Boeing pressed to spend in province
DANIEL LEBLANC

OTTAWA -- The delivery of Canada's first military cargo aircraft faces delays while Boeing is embroiled in a backroom battle with Public Works Minister Michael Fortier over Quebec's share of economic benefits flowing from the $3.4-billion purchase.

The negotiations, which were scheduled to close last month, are running into overtime and jeopardizing the plan to deliver the first of four C-17 aircraft to the Canadian Forces in June.

To obtain the contract, U.S.-based Boeing Co. has to pledge to buy supplies and services worth the exact value of the purchase in Canada. This package of regional benefits can be spent directly to build or maintain the Boeing C-17s, or any other current and future Boeing aircraft.

With billions at stake, Boeing is facing political pressure to invest heavily in Quebec, where 55 per cent to 60 per cent of Canada's aerospace industry is located.


But the company plans to spend only 30 per cent of the economic benefits in the politically sensitive province, while directing the rest to other provinces, industry and government sources said.

One of the issues facing the company is that it has a number of competitors in Quebec, such as Bombardier Inc., and Boeing prefers to invest most of its money elsewhere.

A number of Quebec businesses and politicians -- including Mr. Fortier -- are fighting to boost the province's share of the regional benefits.

He hasn't publicly set out a target for Quebec's share of these economic benefits, but he is staunchly defending the industry that is mainly located in the Montreal area. Mr. Fortier, an unelected senator, will be running in Vaudreuil-Soulanges, just west of Montreal, in the next election. As Public Works Minister, he has the final responsibility for signing the contract.

"Mr. Fortier wants the maximum for Quebec. He is the political minister responsible for the Montreal region," a federal official said.

He is working alongside Industry Minister Maxime Bernier, responsible for regional benefits. Mr. Bernier, who represents Beauce riding in south-central Quebec, is more laissez-faire in his attitude to the distribution of benefits.

Sources characterized it as Mr. Bernier acting as good cop to Mr. Fortier's bad cop in negotiations.

"Mr. Fortier is acting as the minister for Quebec, while Mr. Bernier is acting as the minister for Canada," an industry official said, who added that Mr. Fortier's goals are "unrealistic."

The most recent round of negotiations between government and Boeing officials occurred last week in California, where the C-17 is built.

Boeing has warned that it can guarantee its current price only until the end of this month, saying the cost could go up after that.

Sources said Mr. Fortier shot back by saying the government doesn't have to sign the deal if Boeing refuses to budge.

Sue Dabrowski, general manager of the Quebec Aerospace Association, said her members have high expectations in terms of regional benefits.

"In Quebec, we have 60 per cent of the market. We want 60 per cent of the economic benefits," she said.

The Bloc Québécois is also arguing that most of the money should flow into Quebec, stating that if this were an automobile purchase, the money would end up in Ontario.

Under the current proposal, Ontario would get about one-third of the benefits, while the western provinces would share 20 per cent. The eastern provinces stand to get slightly less than 10 per cent, with the remaining portion still to be allocated.

Ron Kane, vice-president of the Aerospace Industries Association of Canada, said the industrial-benefit package will likely fall short of fulfilling the expectations in Quebec.

"Regional balance is always an issue," he said. "Quebec is a significant portion -- about 56 or 57 per cent -- of Canada's industry. But that in itself is not the guideline in terms of what that regional allocation or distribution of benefits should look like."

Mr. Kane confirmed that not all of the players in the Quebec aerospace industry can expect to receive major contracts in that context.

"There may be companies in Quebec that are natural fits. There may be companies in Quebec that are not natural fits, particularly where there could be a competitive situation," he said.

The lobbying over regional benefits will not end with the C-17 negotiations. The government is planning to purchase $4.7-billion in Chinook helicopters from Boeing and $5-billion in Hercules C130J aircraft from Lockheed-Martin this year.

In these two cases as well, the companies will have to plow the exact amount of the sale in direct and indirect benefits into the Canadian economy.

Boeing refused to comment on the continuing C-17 negotiations.

Sharing the benefits

Aircraft giant Boeing has found itself caught in the middle of provincial wrangling for its business.

The approximate share of Canada's $22-billion aerospace industry, by economic region:

Western Canada: 10%

Atlantic Canada: 5%

Quebec: 55%

Ontario: 30%

SOURCE: INDUSTRY CANADA

[Kosiw]

Anyone remember the CF-18 maintenance contract from 20 years ago....the cheaper bid came in from Bristol Aerospace in Winnipeg, yet those whining tits from Bombardier in Quebec got the contract.....as the saying goes, "the more things change, the more they stay the same"

[mbflyer]

Yeah, but didn't bristol then get the CF-5 contract? From what I recall the economic benefits to the CF-5 contract outweighed the benefits from the CF-18 contract in the long run, as the CF-18 contract was for Canadian planes only, but the CF-5 contract also allowed Bristol to service planes from other countries.

Although I may be totally wrong.

[Navajo-dude]

If the Quebecers want the business because 60% of the aerospace business is in Quebec, they should repay Newfoundland for all the Hydro from Churchill Falls, because 100% of the hydro was produced there in Labrador!!!!

[linecrew]

Yeah, but didn't bristol then get the CF-5 contract? From what I recall the economic benefits to the CF-5 contract outweighed the benefits from the CF-18 contract in the long run, as the CF-18 contract was for Canadian planes only, but the CF-5 contract also allowed Bristol to service planes from other countries.

Although I may be totally wrong.

...but they never did service anyone else's F-5's. The F-5 was already pretty much obsolete as the CF-18 was actually a replacement for it inthe CAF. Bristol then modified the remaining F-5 fleet to be lead-in trainers to the CF-18 with glass cockpits, etc. but even that didn't last long.

[arrow206]

Anyone remember the CF-18 maintenance contract from 20 years ago....the cheaper bid came in from Bristol Aerospace in Winnipeg, yet those whining tits from Bombardier in Quebec got the contract.....as the saying goes, "the more things change, the more they stay the same"

Yup
I was there ..
Me and a lot of my bretheran recieved layoffs when Bristol lost the contract

[Expat]

Come on, you Quebec bashers, it is not the time now to start that stuff. There is already a new feeling about separatism growing...

[cloudcounter]

Family members that dont talk have a problem.

The heading was quite apt- I read it as
Quebec and Booing!
lol
I love Quebec and whats left over as well
cc

Come on, you Quebec bashers, it is not the time now to start that stuff. There is already a new feeling about separatism growing...

[arrow206]

No bashing here
Just relaying a sad day in our careers.
Love PQ, the cities and the people.

[schlumph]

The reason why Quebec based companies don't have their "fair share" of the Boeing IRB's is because they did not do as good a job selling themselves as the other companies that were vying for the same contracts. Frankly it's as the article says, because it's Quebec, it is an entitlement and the companies are arrogant about it.

Bottom line is that at least the IRB's are there for all Canadian companies from coast to coast in all provinces. If the Quebec ones are not doing enough to get off their a-holes, then screw 'em.

[electraguy]

Well, about all this quebec and boeing stuff,

First of all I will say that I really love Quebec, spent some time there when i was with DND and really loved it. All that aside I have to say this. If you have 60% of Canada's aircraft business then why not spread the wealth? I mean honestly, u have bombardier, and its a huge government money dump as it is now. What about Winnipeg, last I checked there was a major Boeing facilty located there, would it not make sense to use it and keep some of those manitoban aircraft folks in work. Quebec needs to learn to stop there whining, they are a province in this country just like the rest and EVERYONE should have a fair crack at the work. This nation within a nation stuff can only go so far. As for Bristol, yes they did get the CF-5 contract and they are still currently and quietly servicing that contract to the customers who bought the F-5. Any why should it matter what contract they got, if they put in the best price for the CF-18 they should have got it. All this being said, we wonder why the aeropace manufacturing sector is weak in canada, its because of petty crap like this. perhaps if bombardier had some vision they could forge ahead in the industry rather than fighting over the scraps from the yanks. Just my thoughts folks, but suck it quebec your not the only province with something to bring to the table, work with us not against us and you might win some support.

[Kosiw]

http://www.canada.com/nationalpost/colu ... a0b6f92403