[BRIEF NOTE] On the problems of Bombardier and the Canadian high-tech economy

[rfmcdonald]

Canadian (and Québec-based) transportation company Bombardier Inc. is having serious issues. Tess Kalinowski in the Toronto Star noted
that not only the TTC but Metrolinx was having serious quality-control issues with the vehicles manufactured by the company.

“Metrolinx is experiencing similar problems with the quality of light rail car frames assembled in Bombardier’s plant in Mexico,” the agency said on Wednesday.

Its order for 182 LRVs comes with an option to purchase an additional 118 vehicles. The vehicles are slightly different from the TTC’s in that they have a cab on both ends and have doors on both sides. They are expected to furnish the Eglinton-Crosstown, the Finch Ave. West, Sheppard Ave East, Waterloo and the Mississauga-Brampton light rail lines.

The problem with the Metrolinx cars is the same as that described this week by frustrated TTC CEO Andy Byford, who said he wants riders to understand why he can’t put more of the air-conditioned, fully accessible streetcars into service.

The first of the 204 new streetcars — price tag: $1.2 billion — were so flawed that the TTC simply couldn’t risk putting them into service because they would almost certainly break down on Toronto streets, he said.

Parts produced in Mexico were so poorly made that they couldn’t be properly assembled in Bombardier’s Thunder Bay plant, where attempts to rivet badly cut walls and under-frames were rejected by the TTC.

Hundreds of jobs will be lost at the company's Downsview plant as a result of unrelated issues, as in Québec at the Montréal headquarters. The Financial Post's Damon van der Linde observed that the Québec government is so concerned with the fate of this anchor of the province's modern economy that it is ready to spend billions of dollars,.

Economy Minister Jacques Doaust says the government is ready to provide loans to the company in order to support operations during a difficult economic period.

“We cannot abandon the aerospace industry. The government of Quebec will continue to be there to support it,” Daoust told reporters at the National Assembly in Quebec City Thursday.

[. . .]

“The global aeronautic industry is in a difficult situation right now, principally because of two players: Russia, which is in a complex economic and political situation with the rest of the Western countries, and China, whose economy has slowed down,” [Daoust] said.

For the CSeries jet project, Bombardier obtained a $117-million loan from Quebec, plus a pledge to offer $1 billion in loans to companies willing to buy the new aircraft.

Quebec’s Minister of Labour, Sam Hamad, says he promises to provide support to the 1,000 workers who are expected to lose their jobs, as well as to their families.

I sincerely hope Bombardier can pull out of this. If it goes, after the collapse of Nortel and the decline of Blackberry, what will be left of Canada's once-emergent high-tech economy?