Bombardier will likely have to off-load one of its money-making divisions in order to ease its hefty debt load, Quebec’s economy minister said Tuesday.
Pierre Fitzgibbon was responding to a Wall Street Journal report that said the storied transportation company, headquartered in Montreal, is in talks with U.S.-based Textron Inc., about selling its business-jet unit.
Bombardier is roughly $9 billion in debt. In 2018, it sold a controlling stake of its A220 regional jet program — developed in partnership with the federal and provincial governments — to Airbus, as a way of improving its financial situation.
With $1.5 billion in debt payments due next year, the company appears once again to be exploring its options. Fitzgibbon said Bombardier doesn’t have much choice but to look at selling other assets, as well.
“The train and business-jet operations make money. They are good operations,” Fitzgibbon told reporters in Quebec City. “The debt level is very high, though, and the question is whether they continue as is. I think the answer is no.”
Bombardier has been in talks for several months with the French multinational Alstom about selling its rail division, about 30 per cent of which is owned by Quebec’s public pension fund manager, the Caisse de dépôt et placement.
Separately, the Quebec government has a 16.4 per cent stake in the A220 regional jet program. Bombardier has also said it is exploring the possibility of leaving the partnership altogether.
Quebec’s initial decision to invest $1.3 billion in the program was controversial at the time. The current government, led by Premier François Legault, has ruled out injecting any more cash.
The sale of the business-jet division could have major ramifications for the Quebec economy. It’s the source of hundreds of direct jobs and a key node of Quebec’s aerospace sector.
But Fitzgibbon hinted that, in terms of Quebec’s economic development, the future may lie elsewhere.
“Trains are very strategic,” he said. “We’re talking about the urban milieu, while the business jet division is an older [business] model.”
The premier also underlined the development potential of the rail division.
“We’re following the file very closely,” Legault said.
“I will do the maximum to keep [as many] jobs in Quebec as possible.”