Countdown to CSeries final assembly decision (plus all that China talk)

A decision on where the CSeries will be assembled has not yet been made, but signs are increasingly pointing to Bombardier’s Mirabel, Quebec plant.

Thumbnail image for Bombardier workers.jpg

 

 

Bombardier has long said it sees its plant in Mirabel – a suburb of Montreal – as the “preferred site” for final assembly. And yesterday Montreal-area machinists at Bombardier voted in favour of a six-year collective bargaining agreement that is contingent on the airframer selecting their region for final assembly of the CSeries.

 

There is only one other candidate in the running – Kansas City, Missouri. “Since last week, we can now confirm two final candidates – Mirabel and Kansas City,” says a Bombardier spokesman. He notes that yesterday’s positive vote from the machinists “is definitely a favourable point in the Mirabel candidacy”.

 

For its part, Missouri recently approved a $240 million tax credit programme that it hopes will persuade the manufacturer to build a $395 million CSeries assembly plant at Kansas City International Airport.

 

Under the terms of the machinists’ deal, however, Bombardier must decide by 15 July whether it will select Mirabel for final assembly.

 

Meanwhile, a new report from Research Capital analyst Jacques Kavafian says Shanghai Airlines and China Southern Airlines are scheduled to meet with Chinese regulators on 14 July to obtain the required approvals to place orders for the CSeries.

 

“We believe that both China Southern and Shanghai Airlines have a meeting scheduled with CAAC [Civil Aviation Administration of China] on 14 July 2008, to obtain the required approvals to purchase the aircraft,” says Kavafian. “Although the 14 July meeting date with CAAC coincides with the opening day of the Farnborough air show, we don’t know if they are related.”

 

So who is Kavafian? According to his bio, Kavafian began his career as an analyst in Montréal in 1985, moving to Toronto in 1996. He was previously with Research Capital from 1996 to 1998, and in the interim period worked at Octagon Capital and Yorkton Securities.

 

But with respect to Bombardier’s Chinese endeavours, does Kavafian have the inside track? We’ll know very shortly if his predictions hold true. However, there is good reason to believe the Chinese are interested.

 

The CSeries’ centre fuselage will be manufactured by China Aviation Industries I (AVIC I) subsidiary Shenyang Aircraft, which agreed to invest in facilities and equipment. In turn, Bombardier is investing $100 million into China‘s ARJ21-900 project and providing technical assistance in developing the aircraft.

 

Photo from Bombardier’s new web site (which looks MUCH better than the last one) at http://www.bombardier.com

  

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