Bombardier Steps Up Lobbying Amid CSeries Financial Squeezeby and
Federal communications rise to highest level since 2007
Ottawa ties are reinforced ahead of Liberals' bailout review
Bombardier Inc. has increased lobbying of Canada’s federal government to an eight-year high, reinforcing its Ottawa connections as officials there prepare to review whether to join Quebec in helping bail out the struggling CSeries jet.
Canada’s largest aerospace company communicated 50 times with federal officials since Jan. 1, more than any full year in records dating to 2007, according to the government’s lobbyist registry. The total for 2014 was 48.
Bombardier declined to elaborate on the meetings with government leaders, which occurred at a critical time for the company. The Montreal-based planemaker has lost two-thirds of its market value in 2015 while grappling with overruns and delays on its biggest-ever jetliner. After agreeing to a $1 billion investment in the CSeries last week, Quebec plans to ask federal authorities to match the province’s commitment.
“Government relations have historically been at the heart of what Bombardier does,” Louis Hebert, a management strategy professor at the HEC Montreal business school, said in a telephone interview. “They are returning to their traditional competitive advantage.”
Industry Minister James Moore and staff of the industry department were the most frequent points of contact for Bombardier representatives, with at least 21 reported communications this year, the data show. Bombardier officials also met International Trade Minister Ed Fast and Finance Minister Joe Oliver.
Bombardier also spent more time lobbying Prime Minister Stephen Harper’s office this year, the records show. The company communicated with officials from Harper’s office seven times this year, compared with three times in 2014 and once in 2013.
“We have regular discussions with federal government officials on a variety of subjects, including the CSeries and other programs,” Isabelle Rondeau, a Bombardier spokeswoman, said when asked about the company’s lobbying efforts. She didn’t elaborate.
Lobbying by Bombardier stopped in August after Harper called a general election for Oct. 19 -- which his Conservative Party lost to the Liberal Party of Justin Trudeau. The new prime minister, who represents the Montreal district of Papineau, will name his cabinet Wednesday, and any assistance to Bombardier will be studied once the new leadership is in place, party spokesman Dan Lauzon said Thursday.
Quebec Economy Minister Jacques Daoust on Friday said $1 billion in federal aid would change the “notion of risk” and complete the CSeries financing package.
Bombardier closed unchanged at C$1.38 in Toronto.
As testing on the CSeries progressed ahead of the jet’s 2016 entry into service, Bombardier used $2.37 billion of free cash flow in the first nine months of the year. That’s 39 percent more than in the same period a year ago.
Bombardier had $2.34 billion of cash and cash equivalents as of Sept. 30, compared with more than $9 billion of long-term debt.
Bombardier employs more than 24,000 people in Canada, or about one-third of the company’s global workforce. Bombardier contributed C$12.4 billion ($9.5 billion) to Canada’s gross domestic product in 2013, according to company data.
Founded as a snowmobile maker in 1942, Bombardier evolved into a multinational transportation company with plane- and trainmaking operations -- a transformation accelerated by the 1986 acquisition of aircraft maker Canadair from the federal government. Bombardier invented the regional jet with the development of the 50-seat CRJ200, a derivative of Canadair’s Challenger jet.
“Ever since Bombardier branched out of snowmobiles, government relations have played a central role in the success of the company,” said Hebert of HEC Montreal. “In the aerospace industry, you can’t be successful if you don’t have governments on your side.”