[pmilot]

This is pretty big news for people living in Québec, as the Québec government invested heavily in the C-Series last year. At the time, the move was criticized as a big gamble and an irresponsible handling of taxpayer's funds because the C-Series' success was far from guaranteed and there were legitimate concerns about Bombardier's leadership.

With this move by Airbus, the government's stake in the project was reduced from 49% to 19%. I'm no economist, but it seems that the crisis was avoided?

[jeffrey_t_b]

It seems like Airbus paid nothing for this (maybe taking on some of the manufacturing expenses?).

See: https://www.cnbc.com/2017/10/16/airbus-teams-up-with-bombard...

It certainly isn't a payday for the Quebec government, but I suppose that 19% of something is better than 49% of nothing. One can _still_ criticize the irresponsible handling of taxpayer money AND now (if the manufacturing part is true) the benefits of the original buy-in will not go to Canadian factory workers.

[gsnedders]

> It seems like Airbus paid nothing for this (maybe taking on some of the manufacturing expenses?).

The company they now own 50.01% pays the manufacturing and sales costs, so they're taking on that.

[bigiain]

So if you believe the press release/announcement (ha ha ha)...

Using Airbus's Alabama factory will mean they can build/sell planes in the US and avoid 300% duty/tariff on those, and (according to the claims) "they'll secure more orders and double the value of the program" - which doesn't seem completely implausible...

Even if that's wildly optimistic, I'd guess even just farming out the 75 plane Delta order to Alabama and saving 220% and/or 300% in duty means a _lot_ of dollars (and cynically, if they were on the verge of losing the whole program, it'd be a super tempting lifeline to be thrown by Airbus...)

[trhway]

>the move was criticized as a big gamble and an irresponsible handling of taxpayer's funds

given the US [unsurprisingly] imposed 300% duty as a counter measure to the perceived government subsidies, i think the more smart thing would be to buy from Bombardier some military hardware (doesn't matter that it doesn't produce it - it could have bought some very small military contractor) at high-high prices like everybody else does - US/Boeing, EU/Airbus, etc..

[forapurpose]

> the US [unsurprisingly] imposed 300% duty as a counter measure to the perceived government subsidies

Not to pick on the parent statement, but it brings up what I think is an important point: Let's not take these claims by the US government at face value. The US very well may have imposed the duty to help a US company, and used the rest as justification. Economic isolationism/nationalism is an explicit policy of the US government.

[Cyph0n]

According to the article, Airbus bought the stake "at no cost". Unless I'm misunderstanding something, shouldn't this be a loss for Quebec?

I guess the Airbus/Boeing duopoly is here to stay. Bombardier looked like a promising future competitor... They still have their rail business, so all is not lost.

[forapurpose]

> shouldn't this be a loss for Quebec?

Agreed. It's a loss for Quebec, Bombardier, Canadian workers (who lose jobs to Alabama), Canadian taxpayers, and most importantly, for free trade and free markets - this will only establish anti-competitive policies as an accepted norm, a dangerous precedent.

Not that anyone cares about economics any more; it all seems political.

[kharms]

>this will only establish anti-competitive policies as an accepted norm

Wouldn't it have the opposite effect? Quebec subsidized a local industry and lost.

[stale2002]

How is it a loss for the free market?

Now Bombardier doesn't have to pay the ridiculous 300% tax. They are subject to less regulations and more free market.

[forapurpose]

The 300% tax still distorted the market by pushing Bombardier into a deal they otherwise might not have taken, into investing resources in a location (Alabama) that they might not otherwise have chosen, and by taking a competitor out of a marketplace with very high barriers to entry.

[danmaz74]

Looks like only final assembly will be moved to Alabama, and only for the jets destined to the US...

[gsnedders]

The rail business, Bombardier Transportation, is headquartered in Berlin, and as one of the sibling comments says, may yet get sold off. Undoubtedly, the money eventually flows back to Bombardier's headquarters but it is primarily a European division.

[Doctor_Fegg]

It's possible that Bombardier Rail may be absorbed by a merged Siemens/Alstom - the dust hasn't settled yet.

[jeffrey_t_b]

> I guess the Airbus/Boeing duopoly is here to stay.

Comac is a promising competitor, too, and are explicitly targeting the bread-and-butter size classes of Airbus/Boeing.

[guiomie]

"Bombardier Inc. announced Monday it has sold a majority stake in its CSeries passenger jet business to European aerospace giant Airbus for no cost." ... Does "for no cost" mean for 0$? I guess this means the Quebec Government was diluted, thus is the crisis really avoided?

[AnimalMuppet]

It might mean "for no loss", that is, for what it paid for it. No cost to the taxpayers.

Note well: I do not know if that is the correct interpretation.

[guiomie]

The guardian seems to add more details:

"If Airbus’s plan works, it’s ingenious. It will get a 50.1% stake in the C-Series without paying a penny and will collect some cheap warrants on Bombardier’s shares"

https://www.theguardian.com/business/nils-pratley-on-finance...

[AnimalMuppet]

Ah, that seems to rule out my interpretation.