> Chief Executive Officer Alain Bellemare said he did not expect the job cuts, which include 1,500 workers in Quebec and 500 in the rest of Canada, would affect the company's talks with the federal government over a $1 billion investment in its CSeries jet program.
"Hey Federal Government, we'd like you to help us out to the tune of a billion dollars, because we're such a big important employer here in Canada... also, we're going to slowly stop being such a big employer"
I don't think this is inconsistent at all. They're laying off mostly people in their rail division, which is based in Germany and doing poorly. They're asking for some government support for the aerospace group, which is based in Canada and doing ok, but facing lots of competition from Airbus and Embraer, which also receive government support.
I wonder why governments subsidize production of commercial airliners so much. There are no network effects or lock-in, so there is nothing to milk after you've gotten big, just more need for subsidies.
And jet fighters etc. are usually made by different manufacturers altogether, except for military freighters.
Er, there are huge network effects and lock-in. Maintenance and type certification mean that pilots and mechanics get locked into your type. That in turn means that airlines tend to try to buy from as few manufacturers as possible, so as they grow they're more likely to buy from the manufacturer they bought from last time.
There are of course self-sufficiency reasons too. If the West put an embargo in place against China for airliners, they'd be SOL. This is why they're trying to hard to make their own planes (and perhaps more importantly, engines).
Bombardier is one of the main anchors around which many major aircraft industry company are located. In turn those suppliers also help explain the Bell Helicopter Textron plant.
I'm thinking of companies like Safran Landing Systems (formerly Messier-Dowty), Pratt-Whitney Canada (one of, if not the, largest producer of turboprops and turboshafts engines), CAE (sims, avionic), Thales (avionic), Héroux-Devtek (landing gears), etc. Plus all the smaller subcontractors.
There is no Minimal Viable Product for commercial airliners. Either they fly with as close to 100% reliability as possible or almost no one will buy them. The cost to an airline of even a single crash is way more than they could ever hope to save by buying from some unknown maker. It's also a massively capital-intensive business.
It isn't impossible that new competitors will emerge but it will be a long difficult road.
The trend has gone the other way though. Companies like Wright, Curtiss, Martin Baker and Vought did complete aircraft but ended up doing subsystems. The aircraft and development projects have grown. The market has matured to a few big players. If you look at the A350 construction videos, you get a little glimpse of the massive investment required just for that part. New technologies like vacuum infused out of autoclave composites might simplify manufacturing a lot though. IIRC Sukhoi Superjet uses them.
Wright got into the business prior to its significant maturation, as I recall.
I suspect you could divide the industry at some arbitrary point and argue signifibant maturity by then. 1950, 60, or 70 depending on whether you're considering manufacturers, technology, or airframes, by and large.
Consolidation does seem to be a very strong trend, and one that may prove difficult to reverse.
National pride.
Looks good to constituents (high paying, high-tech blue collar jobs).
Profit (assuming Boeing eventually pays more in taxes than the value of the subsidies)
"I wonder why governments subsidize production of commercial airliners so much. There are no network effects or lock-in"
Huge lock-in :)
Aircraft manufacturers are all semi-nationalized they are 'too big' even for private capital to compete on - barriers to entry far too high and too much risk.
Airbus is literally an EU creation. Boeing lives on defence contracts.
So it needs 'a national team playing for it' kind of thing.
There are a lot of jobs, it's very long term, it's big money, involves a lot of tech and R&D so it's a good industry to have if you can get it going. But it doesn't get going without playing 'home team'.
>There are a lot of jobs, it's very long term, it's big money, involves a lot of tech and R&D so it's a good industry to have if you can get it going. But it doesn't get going without playing 'home team'.
You don't really have a choice on subsidies if you want a home-grown aerospace industry in the current climate. Other countries subsidize heavily.
In theory we have international agreements preventing such things, but there are a lot of ways to subsidize a company.
The layoffs mentioned here seem to be more related to the rail division than to aircraft manufacturing. The rail division which appears to have a lot of problems.
"Hey Federal Government, we'd like you to help us out to the tune of a billion dollars, because we're such a big important employer here in Canada... also, we're going to slowly stop being such a big employer"