CSeries work could go to the USA

A few years ago Bombardier said it intended to build the CSeries wing, horizontal and vertical stabilisers, and nacelles at its structures and composites facilities in Belfast, Ireland; the cockpit in St Laurent, Quebec and conduct final assembly in Mirabel, Quebec.

While these are still the “preferred sites”, they may not get the business! Negotiations are still going on, but Bombardier is now evaluating sites in the USA in light of the exchange rate of the Canadian dollar, revealed Bombardier Aerospace president and chief operating officer Pierre Beaudoin.

The fuselage will continue to be manufactured by SAC in China.

Development costs and capital investment for the CSeries will total $3.2 billion, including $2.5 billion in R&D (up from the original $2.1 billion price tag) and $700 million in capital costs of building and facility tooling. Costs will continue to be spread three ways – a contribution split with suppliers, the airframer, and government. But because key final production and assembly sites remain in question, it remains unclear what the government mix will look like, and if Quebec, the UK or the USA (or a combo of these) will make that one third investment.

Another interesting point from the call – the list price for the 110-seat version of the CSeries is expected to be in a “lower $40 million” range while the 130-seater will be on the higher end of that. Stay tuned for more…

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2 Responses to CSeries work could go to the USA

  1. Dean February 24, 2008 at 9:33 pm #

    I’d be wary of locating in the US. If I were Bombardier I’d run a sensitivity analysis to determine the impact of a currency swing back up to the USD’s pre-2003 level (or at least a 20% increase over the CAD$). The fact that an increasing number of foreign businesses are looking to locate in the US actually helps improve the value of the currency – it increases the global demand on the US dollar and contributes to the overall US economy (which is what backs the dollar).

  2. Mary Kirby February 25, 2008 at 4:46 pm #

    Yes. Apart from being ultra-sensitive, does it make sound fiscal sense going forward?
    It’s a good investment for governments, says Beaudoin: “I think government investment in Bombardier have been, well first of all, refundable, repayable, and then if you look at programs in which the government has invested in Bombardier so far, if you look at the programs that are closed out, we have returned 131% of its investment to the government so I think we have a good economic case and that’s how we’re looking at it.”