UK investment in CSeries down slightly after nacelle bid fails
By Mary Kirby
(Clarifies that a P&W/Goodrich partnership is responsible for the CSeries nacelle system)
UK investment in the Bombardier CSeries development programme has declined slightly after the airframer's Belfast plant failed to win a bid to produce the nacelle for the Pratt & Whitney (P&W) geared turbofan-powered airliner.
The CSeries' advanced composite wings will be developed and produced by Bombardier in Belfast. But with the Northern Ireland facility unsuccessful in its nacelle bid, UK investment now stands at £142.7 million ($209.7 million), down £12.3 million from the previously announced investment of £155 million.
P&W is responsible for delivering the nacelle system as part of the total propulsion system for the CSeries. The company in 2008 partnered with Goodrich to provide the advanced, light-weight system for Bombardier as well as the Mitsubishi Regional Jet.
Despite the dip in UK investment in the CSeries, Bombardier says the $2.6 billion funding needed to develop the aircraft will still come in roughly equal shares from Bombardier, principal suppliers, and government repayable investments, which includes loans worth $350 million from Ottawa and $118 million from Quebec.
"In the big picture, [the drop in UK investment] didn't really change the proposition of the one third, one third, one third [split between] government, suppliers and Bombardier," says Bombardier Aerospace president and chief operating officer Guy Hachey.
Separate to this funding, Bombardier has already spent $252 million on the CSeries programme from its free cash flow, bringing its total announced investment to over $1 billion in the programme.
While acknowledging that Bombardier is offering the CSeries "in a very challenging environment", the company remains confident it will secure additional orders this year, after Lufthansa and lessor LCI announced a combined 50 firm orders plus options.
As CSeries work ramps up, Bombardier will be able to re-allocate some employees to new positions to reduce the firm's planned headcount reduction, which rose today by another 3,000 workers across North America, Mexico and Northern Ireland due to rapid deterioration in business aircraft demand.
The Belfast cuts, numbering 975, will largely focus on contractual positions, and come in addition to the 300 redundancies announced in February.
Hachey says Bombardier is going to see "how we can flow some of the people being displaced" from major aircraft programmes to the CSeries and other lines.
For example, demand for Bombardier's Q400 has remained steady, as evidenced by some recent orders, and thus supports increased production.
Commenting on the news of cuts at Bombardier in Northern Ireland, Society of British Aerospace Companies chief executive Ian Godden said the current downturn in business jet demand, resulting in job losses, indicates "the need for continued government support for the successful world-class Bombardier facility in Northern Ireland and the hundreds of companies across the UK in its supply chain".
He adds: "Bombardier is investing in a major new commercial aircraft programme, the CSeries which was launched at Farnborough last year. Two substantial orders were announced for CSeries earlier this month, and Bombardier in Belfast is developing the composite wings for the aircraft and will soon begin construction work on a new purpose-built factory, which will provide a further boost for Northern Ireland. Despite today's announcement Bombardier's presence in Northern Ireland will deliver vital economic benefits in the near future. To secure these long-term benefits the support of the Government and the Northern Ireland Assembly will be vital."
