TORONTO, Canada – Canadian company Bombardier announced on Monday that European manufacturer Airbus will acquire a majority stake in the production of the company’s C Series, a medium-range family of aircraft with a capacity of between 100-150 seats.
The Canadian company indicated in a statement that Airbus will buy 50.01 percent of C Series Aircraft Limited Partnership (CSALP), which produces the C Series aircraft developed by Bombardier.
The rest of the company will be divided between Bombardier, with continues to hold about 31 percent, and Investissement Quebec (IQ), will hold the remaining 19 percent.
The agreement includes the opening of a second production line in the United States which will allow Bombardier to avoid customs duties on the C Series aircraft.
The potential loss of jobs in Canada prompted the Canadian government to point out that it will review the agreement to make sure it is “in the national interest” and create jobs in the country.
The sale of the majority of CSALP comes shortly after the US authorities imposed punitive customs duties of 300 percent on Bombardier’s C Series aircraft.
The measure was adopted by Washington at the request of Boeing, which considers that Bombardier is being subsidized by the Canadian authorities to offer its aircraft at prices below those of the competition.
Bombardier said Airbus will provide experience in sourcing, sales and marketing as well as customer support.
The main production line of the C Series family aircraft will remain in Canada. “The agreement brings together Airbus’ global reach and scale with Bombardier’s newest, state-of-the-art jet aircraft family,” the companies said in a statement.
But the two companies indicated that they will open a “second final assembly line” in Alabama for US customers.
Airbus already has a production plant in Mobile, Alabama.
The decision to produce in the United States will make it possible to avoid tariffs imposed by Washington.
“This is a win-win for everybody! The C Series, with its state-of-the-art design and great economics, is a great fit with our existing single-aisle aircraft family,” Airbus CEO Tom Enders said, while Bombardier president Alain Bellemare said “We are very pleased to welcome Airbus to the C Series programme.”
Canada’s Minister of Innovation, Science and Economic Development, Navdeep Bains, said that “proposed investments of this kind require the government to consider whether they are in the national interest.”
“The agreement with Airbus, like all significant investments proposed in Canada by foreigners, is subject to the Investment Act of Canada. In my review I will look at how this agreement benefits Canadians, supports our industry and creates good jobs,” he added.