Bombardier to focus on business aviation after sale of CRJ program to Mitsubishi

posted on 26th June 2019 by William Hayes
Bombardier to focus on business aviation after sale of CRJ program to Mitsubishi

Bombardier Aviation is now solely a business jet franchise, following an agreement reached with Mitsubishi Heavy Industries (MHI) for the $550 million (£432 million) sale of its Canada Regional Jet program.

The agreement, expected to close during the first half of 2020, includes the assumption by Japanese firm MHI of liabilities amounting to approximately $200 million ((£157 million).

“The CRJ program has been supported by tremendously talented individuals,” said Seiji Izumisawa, President & CEO of Mitsubishi Heavy Industries.

“In combination with our existing infrastructure and resources in Japan, Canada and elsewhere, we are confident that this represents one effective strategy that will contribute to the future success of the Mitsubishi SpaceJet family.

“MHI has a decades-long history in Canada, and I hope this transaction will result in the expansion of our presence in the country, and will represent a significant step in our growth strategy.”

Bombardier will remain in possession of its CRJ production facility in Mirabel, Quebec, continuing to assemble the current CRJ backlog on behalf of MHI, which is expected to conclude in the second half of 2020.

The company will continue to supply components and spare parts from Quebec during this period, after which CRJ production is to cease permanently.

“We are confident that MHI’s acquisition of the program is the best solution for airline customers, employees and shareholders,” said Alain Bellemare, President and Chief Executive Officer, Bombardier Inc.

“We are committed to ensuring a smooth and orderly transition.”

News of the sale has sparked concern in Northern Ireland over the future of around 350 jobs at the company’s plant in Belfast, where the central fuselages of the CRJ planes are manufactured.

“Despite the huge skills base among the workforce in Northern Ireland, there are grounds for concern about the long-term security of the approximately 350 jobs sustained by this work in Northern Ireland – at worst, this sale might simply be a case of Mitsubishi buying up a competitor to increase market share,” said Susan Fitzgerald, Unite Regional Coordinating Officer.

“The fact that no one in the Northern Ireland operations was informed about this by Bombardier global corporate management will result in a wave of anger and concern among the workforce.”

The Canadian company is one of Northern Ireland’s largest employers, providing work to around 3,600 people, mostly in Belfast.