| | LARGEST CONTRACT EVER!
Bombardier Aerospace is about to win its largest contract ever. Here is the story:
Bombardier to Ink Air Wisconsin Jet Deal- Report
18:03 EST Sunday, January 28, 2001
MONTREAL (Reuters) - Bombardier Inc. is on the verge of signing an agreement in principle on a big jet order from U.S.-based Air Wisconsin, according to a French report on the Canadian Broadcasting Corp. on Sunday.
RDI, the French service of the CBC, said Canadian Industry Minister Brian Tobin and Bombardier Chairman Laurent Beaudoin confirmed at an economic conference in Switzerland that the two sides were prepared to sign the deal involving 75 Canadair regional jets.
Officials of Bombardier, the world's third-largest civil aircraft maker, were not immediately available to confirm the report.
Earlier this month, the Canadian government confirmed that it was prepared to provide up to $1.1 billion of financing for a $1.5 billion purchase by Air Wisconsin, an affiliate of United Airlines, of up to 75 of the Bombardier jets.
The controversial move was being considered amid an ongoing trade dispute between Canada and Brazil over subsidies to their respective jet makers.
Canada has said that Brazil is not living up to a number of rulings from the World Trade Organization which said Brazil's export financing scheme PROEX, for sales of jets made by Brazilian jet maker Embraer , was illegal.
Bombardier has said it was seeking the Canadian government's help, in the form of a low-interest loan to Air Wisconsin, to help counter "below market" financing offered by rival Embraer on its own family of regional jets.
Such financing can lower the sale price of a jet by some $2.5 million, Bombardier officials have argued. A 50-seat Canadair Regional Jet sells for about $20 million.
Bombardier says its share of the world market for regional jets, which are used by regional airlines on shorter flights, has declined to about 46 percent from 65 percent in the mid-1990s when Embraer expanded its sales and production.
Once owned by the Brazilian government, Embraer was privatized. In 1999, a French aerospace consortium including Dassault Aviation, Thomson-CSF, Aerospatiale Matra and Snecma, bought a 20 percent stake in the company.
Bombardier, which also makes passenger rail cars, snowmobiles and watercraft, is one of Canada's largest manufacturers. Of the 92,000 aerospace workers in the country, Bombardier employs 24,000.
globeinvestor.com
And this story:
Bombardier on "verge" of deal with Air Wisconsin: Tobin
14:37 EST Sunday, January 28, 2001
Davos, Switzerland — Bombardier and Air Wisconsin are expected to finalize a $3-billion (Canadian) contract for as many as 150 regional jets in the next few days, says Industry Minister Brian Tobin.
The deal, which would lead to an additional 1,000 jobs for Montreal-based Bombardier, would also give the company an enormous boost in its efforts to stay competitive with rival Embraer of Brazil in the world market.
"Bombardier is on the verge of reaching a final deal," Mr. Tobin said Saturday following a workshop on Canadian competitiveness at the World Economic Forum.
Bombardier chairman Laurent Beaudoin confirmed a deal is imminent but cautioned the final contract is not yet signed.
"We hope it will be as soon as possible," said Beaudoin, who is also attending the forum at the ritzy alpine ski resort.
"But we don't usually announce our contracts before they're signed."
Mr. Beaudoin said most of the work is done, but details still to be worked out include service and maintenance contracts.
The contract is expected to cover the delivery of 75 50-seat jets, with an option for 75 more planes.
The federal government helped pave the way for the deal when it agreed earlier this month to provide loan guarantees to Bombardier to help it secure the order from Air Wisconsin Corp., a regional airline affiliated with United Airlines of Chicago.
The World Trade Organization recently ruled Canada has the right to impose $1.4-billion worth of retaliatory sanctions on Brazilian goods because of export financing by the Brazilian government to Embraer.
The two companies are leaders in the regional jet industry, competing for contracts with airlines in the United States, Europe and elsewhere.
Canada alleges Brazil has yet to curtail its export subsidies to Embraer. Brazil insists it brought its export financing in line with WTO guidelines in December.
The Air Wisconsin deal would be the second big contract for Bombardier this year.
In early January, Skywest Airlines signed on for 64 Regional Jets and an option for an additional 64 planes.
Last summer, Bombardier announced the creation of 4,000 jobs and the construction of a new factory to build the regional jets in Mirabel, Que.
The Air Wisconsin deal would require an additional 1,000 employees at various Bombardier locations in Canada.
If the deal is finalized without any hitches, Bombardier will have orders to deliver a total of 463 planes to various customers. Contract options could add another 690 aircraft to the company's outstanding orders.
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