Here's an encouraging story. It appears that the Canadian Federal Government is taking a hard line in negotiations with Bombardier Inc, which is looking for a billion dollar injection of public funds. It appears that the sticking point is Bomber's dual share structure, which allows the firm's founding family to keep control of the enterprise. The Feds, it seems, are reluctant to accept a non-voting place at the table if they put in such a large sum of money. That's entirely appropriate, given Bombardier's extremely checkered past and its history of reliance on public bailouts.
In truth, it's not at all obvious why Bombardier still wants Federal money. The company's C-series jets, which have chewed through its liquidity at a fantastic rate, are now starting to sell. Delta Airlines has placed a firm order, and a provisional order from Air Canada is set to firm up at any time. The first CS-100, the smaller version of the plane, should enter commercial service with Swiss Airlines next month.
Bombardier still has problems with its other product lines -- its name is mud in the UK, where it abjectly failed on a contract with London Underground, and it's facing a $50 million damages lawsuit from the city of Toronto over a horrifically botched streetcar order. Still, there's no longer any apparent risk to the company's survival. Unless the Feds can obtain some influence over the company's management and some share in the upside for taxpayers, there's no case at all for putting public money in Bombardier's pocket.
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