The company you keep?

Canadian aerospace/transportation giant Bombardier Inc is currently awaiting a decision from the Federal government over the company's request for an injection of capital.  The government of Quebec and its pension fund have already ponied up more than C$ 2 billion, and Bombardier figures a further billion from the Feds should just about see it right.  Both the Quebec government and the government of Ontario, which between them provide the home for most of Bombardier's facilities (and jobs) are anxious for the Feds to come up with the cash.

Unfortunately, the headlines about Bombardier in recent months have been far from positive.

• The company's C-series jet project, which has chewed through its cash holdings at a fearsome pace, remains on a knife edge.  An order from Air Canada last month was good news, but was immediately outweighed by the news that an earlier and larger order from Republic Airlines was at risk of falling through as a result of a Chapter 11 filing.  

• The Toronto Transit Commission (TTC) is still awaiting the bulk of an order for streetcars that Bombardier has proven itself incapable of delivering on time. The company won the (highly suspect) bidding process by promising to do the bulk of the work in Thunder Bay, Ontario. However, it turns out that much of the work is being carried out in Mexico, and Bombardier has been quick to blame its employees there for the delays.  Even so, it continues to send more and more work offshore, despite lobbying hard for more Canadian taxpayer dollars.

• A signalling contract for London Underground was pulled from Bombardier after it became evident that the company would be unable to perform the specified tasks and would run wildly over budget. A report released this week brands Bombardier's performance as "nothing short of a disaster". 

• With Bombardier holding out the begging bowl, the Canadian media have been looking into the company's structure. The founding family maintains effective control of the operation through its holding of most of the company's voting stock; most common shareholders have non-voting shares. This is causing problems for governments as they look for ways to keep control of how their bailout dollars are spent. Moreover, the company's leisure products division (ski-doos, jet skis and such) is run by the founding family as a separate business -- and is highly profitable.

Supporters of a Federal bailout talk of Bombardier as a "national champion" in the field of high tech. Even PM Justin Trudeau, whose government seems to be taking its time about coming to the bailout party, has sung the praises of the C-series jet.  Yet the company's recent history is a litany of overstretch and failure, and it's far from certain that putting in more public money will finally cause it to get its act together. Whichever way Trudeau finally decides to jump on this one, the critics will be ready to pounce.