Bombardier Inc. has started preliminary work on a $350-million manufacturing facility after signing a decades-long lease with the Greater Toronto Airports Authority to build its flagship private jets on airport land.
The Montreal-based plane and train manufacturer on Wednesday announced it agreed to a 38-year lease with the airport authority, a move chief executive Alain Bellemare described as a strong commitment to Ontario’s aerospace industry and skilled workforce.
“That is a very significant investment we’re going to be making here,” Bellemare said at a media event at a Mississauga, Ont. hangar alongside government, airport and union officials.
Production is scheduled to begin in 2023 at the high-tech facility at Toronto Pearson International Airport, just 20 kilometres from the Downsview facility where the Global series jets and Dash 8 turboprops are currently assembled.
About 3,000 employees work on the Global jets, with the number of workers expected to remain stable after the move to Pearson, Bellemare said. Unifor National president Jerry Dias, whose union represents the Downsview workers and was initially concerned the sale would mean job cuts, praised the announcement as an example of what Canada needs to do keep good-quality jobs and compete on the world stage.
GTAA president and chief executive Howard Eng said Bombardier’s move to the airport makes it an “anchor” in the aviation cluster of jobs around the airport. About 28,000 people in Ontario work in the aerospace industry, which supports more than 200,000 jobs nationwide and adds brings in an estimated $25 billion to the economy.
The relocation allows Bombardier to start from scratch with a one-million-square-foot facility, where new technology will improve efficiency and reduce costs, business aviation chief operating officer Paul Sislian said at the event. Costs will also decrease since Bombardier can use GTAA runways instead of operating its own.
Bombardier sold the 90-year-old Downsview facility to the Public Sector Investment Board last year for a net $750 million to improve its cash position during its tumultuous five-year turnaround plan. It also sold the turboprop program to Longview Aviation Capital Corp., which will continue to manufacture planes at the Downsview facility until at least 2021.
The manufacturer’s latest restructuring plan involved shedding commercial airline assets to focus on the more profitable business aircraft such as the Global 7500, which it describes as the world’s most advanced business jet.
Bombardier’s move to the airport makes it an ‘anchor’ in the aviation cluster of jobs around the airport
Howard Eng, president and CEO, Greater Toronto Airports Authority
In the third quarter, Bombardier spent twice as much as analysts anticipated in a race to deliver 7500s by the end of the year, training some of the people building the 5500 and 6500 jets to work on the 7500 planes as well. It is on track to deliver its target of 10 to 15 planes in the fourth quarter, Sislian said.
The starting price for a Global 7500 jet is US$72.8 million, with upgrades such as a shower starting in the six-figures, according to a spokesman giving a tour of the jet parked at the event. The jet, popular with business people who travel long routes, features leather toilet seats, a dining area, two ovens, a couch and a permanent bed.
Neither the provincial or federal government will subsidize the new facility, which Bombardier will build and operate under a sale-leaseback arrangement.
But in 2017 the federal government did give Bombardier an interest-free loan of $372.5 million over four years for research and development of both the Global 7000 and the C-Series aircraft. Bombardier gave Airbus a controlling stake in the C-Series, now called the A220, in fall 2017.
Innovation, Science and Industry Minister Navdeep Bains said Wednesday’s announcement was the fruition of that investment in research and development.
“Our government has been very clear about our commitment to the aerospace sector,” Bains said at the event.
“It’s great to see the turnaround in the company.”