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PRINT EDITION
Bombardier's sale of CRJ program would be a sad ending to a Canadian success story
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By KONRAD YAKABUSKI
  
  

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Wednesday, June 12, 2019 – Page B1

If you ask the average Canadian on the street today to name the country's best invention ever, he or she would probably say basketball. But long before the Toronto Raptors became NBA contenders, and before the BlackBerry took the title, there was the Canadair Regional Jet.

Bombardier's CRJ may not have saved millions of lives the way insulin, another Canadian invention, has. But it did thrust Canada into the major leagues of the global civil aviation industry and transformed air travel in the 1990s. Bombardier has sold almost 2,000 CRJs since the plane's 1993 launch, of which more than 1,300 are still flying passengers today.

That's why news that Bombardier is in talks to sell the CRJ program to Japan's Mitsubishi Heavy Industries is a worrying development for Canada's aerospace industry and a sad reminder of how a global champion lost its way. Bombardier's disastrous attempt to take on Airbus and Boeing with its C Series jet has left it with little choice but to sell the furniture.

Instead of betting the house on the 100- to 150-seat C Series, Bombardier could have spent the past decade reinventing the CRJ to compete with Embraer's more modern regional jets. Instead, Canada now risks losing to a foreign country aerospace technology, invaluable expertise and highly skilled manufacturing jobs all developed with the aid of the federal government.

Ottawa needs to take a hard look at any deal to sell the CRJ program to ensure it does not jeopardize the long-term interests of Canada's aerospace sector.

Mitsubishi is mostly interested in Bombardier's patents and the global after-sales support and maintenance operations that Bombardier maintains for the CRJ, providing it with a readymade network to service the Japanese company's own regional jet, which has yet to hit the market.

Ottawa lent $86-million to Bombardier to develop the original 50-seat regional jet after the company's 1986 purchase of Montreal-based Canadair from the federal government. Canadair had been mulling a regional jet based on its Challenger business aircraft, but the program only took off after Bombardier bought the company and hired Bob Brown to run it.

Mr. Brown had been an associate deputy minister responsible for industrial policy and had negotiated major investments in Canada's auto sector in the early 1980s. Then-Bombardier chief executive Laurent Beaudoin put him in charge of developing the CRJ.

At the time, regional airlines relied on noisier and slower turboprop aircraft to serve secondary routes. Bombardier saw an untapped market in stretching the Challenger and getting General Electric to develop an all-new engine for the aircraft.

Both de Havilland Aircraft of Canada, which was then owned by Boeing, and Italy's ATR opted to stick with making turboprops.

And while Dutch plane maker Fokker and Germany's Dornier were working on developing jets in the 50-seat category, Bombardier beat them to market.

The CRJ had a transformative effect on air travel, allowing airlines to exploit a hub-and-spoke system that fed passengers from smaller cities to major airports in a more economical and time-efficient manner. Regional airlines also saw an explosion in their business by offering direct flights on lower-traffic routes that the major airlines didn't bother serving.

Family-controlled Bombardier initially aimed to sell 400 CRJs by 2002. But by 1997, it had already surpassed that goal and announced the development of a 70-seat version of the CRJ. Ottawa stepped up with an $87-million interest-free loan to Bombardier to develop the bigger plane. Later, the company stretched the original design further to produce a 90-seat CRJ.

Mr. Brown, who served as the first non-family chief executive of Bombardier between 1998 and 2002, attributed the success of the CRJ program to three factors.

First, the company made the right strategic decision by focusing on a niche that Boeing and Airbus weren't interested in; second, it delivered the new product on time and on budget; and third, it continued to invest in improvements to the CRJ design as it developed bigger versions of the aircraft.

Bombardier forgot all these lessons in pressing ahead with the C Series, which came to market years behind schedule and more than US$2-billion over budget. Most important, Boeing and Airbus were not about to cede ground in the 100-seat-plus aircraft market to a Canadian interloper. Despite a US$1-billion investment in the C Series by the Quebec government, and hundreds of millions of dollars in loans from Ottawa and Britain, Bombardier last year gave control of the C Series to Airbus for a symbolic US$1.

Had Bombardier instead spent all that time and money developing a 21st-century version of the CRJ, the company might be in a better position now as airlines move to replace their existing CRJs with more modern planes.

Aerospace industry publication Flight International last week called the CRJ "an aging platform based on yesterday's technology with a claustrophobically narrow fuselage" compared with Embraer's family of regional jets.

Mitsubishi may extend the life of the CRJ program, which currently has a backlog of about 50 orders, as it awaits certification of its own line of regional jets. And there is some hope, however faint, that the Japanese company would manufacture planes at plants in Quebec that currently assemble the CRJ or its parts. But the CRJ would likely soon fade into history.

It would be a sad ending for one of Canada's greatest inventions.

Associated Graphic

The CRJ transformed air travel by allowing airlines such as Air Canada to take advantage of the effiencies of a hub-and-spoke system.

LARRY MACDOUGAL/THE CANADIAN PRESS


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