Last Friday, the United States International Trade Commission rejected Boeing's unfounded complaint and voted unanimously against applying a near 300-per cent tariff to U.S. imports of C Series aircraft. A few days after this victory, Michel Girard, columnist for the Journal de Montréal, published an ill-informed analysis stating that the partnership in which Airbus is to acquire 50.01% of the C Series program was a mistake and that it would have been better for the Government of Québec to invest in Bombardier rather than in the C Series.
To reach these premature conclusions, Mr. Girard left out two very important facts: the considerable value of the expertise and resources that Airbus will bring in exchange for its interest in the C Series and the positive impact this partnership will have on the Government of Québec’s investment.
Let us set the record straight: long before Boeing's petition, Bombardier was considering a strategic alliance to realize the full potential of its program. It is well known that talks with Airbus on this subject began as early as 2015. Bombardier's goals were clear: to ensure the sustainability of the program, to sell more aircraft, to lower production costs and to offer first class support to our customers. As the world leader in the single-aisle aircraft market, Airbus was the perfect partner to help us achieve these goals.
To claim that Bombardier gave the C Series to Airbus "free of charge" demonstrates a profound misunderstanding of how the aerospace industry works and how companies are evaluated. In exchange for its interest, Airbus will mobilize its sales force, global supply chain expertise and extensive customer service network for the benefit of the C Series. These in-kind contributions should more than double the program’s value.
Let's now turn our attention to how the Government of Québec and Quebecers will benefit. With Airbus, our aim is to increase the number of aircraft sold and expand our margins to generate better returns for the C Series shareholders, more jobs, more economic benefits and more fiscal revenues for Québec. In addition, the Government of Québec will profit from the appreciation of Bombardier's stock through the 100 million warrants it received in return for its investment. These warrants have a $2.21 exercise price, the same price paid by shareholders who participated in the share issuance a few months earlier. If these were exercised today, they would be worth nearly $100 million.
In aerospace, as in other sectors, the future belongs to companies that enter strategic alliances and it is the way that Bombardier has chosen to achieve its ambitious goals. The long-term value of the C Series program has increased significantly with the arrival of Airbus. This partnership will make this remarkable aircraft shine all over the world, and create an exceptional platform to spread Québec's genius. We are confident that in a few years from now, we will be able to prove that this agreement was fruitful for everyone, including the Government of Québec and Quebecers.
Dr. Sylvain Lévesque, former Vice President, Corporate Strategy, Bombardier Inc.