On Monday night, the Bombardier-Boeing trade fight was decided by technical knockout, with victory going to a boxer who wasn't even in the ring.
Developing Bombardier's C Series jet may have cost north of $6 billion (U.S.), with a chunk of that backstopped or borne by Ottawa and Quebec City. But for the low, low price of zero dollars and zero cents, Europe's Airbus Group SE has now taken a controlling stake in the project.
That makes Airbus the clear winner in this transaction. For Canadian and Quebec taxpayers, in contrast, the story is a very mixed bag.
The Canadian government has financially supported Bombardier on numerous occasions, including with two "repayable contributions" to the C Series. The Quebec government for its part bailed out Bombardier last year, giving the company a $1-billion lifeline – sorry, we mean investing $1-billion – in return for a 49-per-cent stake in the C Series.
That investment, at least according to Monday's sale price, is worth nothing.
But the takeover of the C Series by the European consortium means that Bombardier and its flagship jet are no longer in imminent danger of financial collapse. And that makes it less likely that the plane's manufacturers will be coming cap in hand to taxpayers.
Wait, sorry, we just realized that we have to add two caveats to the above statements.
As everybody knows, aerospace is a subsidy-nourished industry, so let's not start peddling illusions now. Of course the new Bombardier-Airbus tag team will soon be making its pitch to you, the taxpayer. Yesterday's prospectus said, "Invest now, or we'll go under"; tomorrow's sales sheet will no doubt say, "Invest now – things have never been better!"
And as for that bit about the C Series being Bombardier's flagship product? Not anymore. The folks from Toulouse, France, now own 50.01 per cent of the project and its fruits. Whether the plane will be officially rebranded as an Airbus remains to be seen but by whatever name, the C Series is property of Airbus.
Bombardier may have created it – allow us to once again mention those $6-billion (U.S.) in development costs – but it's now the minority shareholder, and effectively somebody else's chief subcontractor.
And what does that make Bombardier? Under the circumstances, a winner. Big time.
The C Series's startup costs and poor sales threatened to sink the company. And Boeing's trade complaint, resulting in the United States Commerce Department imposing absurd duties of nearly 300 per cent, meant that selling planes in the U.S. would be difficult, if not impossible.
What's more, Bombardier, which has 360 orders for the jet, hasn't sold a new one since last year. New orders weren't coming in because of the fear that Bombardier might shut down production due to a lack of orders; that lack of orders was making it likely that C Series production would have to be shut down.
The project was in a stall, which threatened to become a death spiral.
The Airbus takeover changes all that. The C Series is now going to be offered as part of Airbus's lineup, and sold by the Airbus sales team. If necessary, Airbus says planes could even be assembled at the company's Alabama manufacturing facility, as a way of getting around the American tariff.
None of that means that C Series sales are about to take off. They might; they might not. But the deal puts some lift under Bombardier's wings, and gives it the kind of time and space it was running out of. The company's shares surged on Tuesday, closing up nearly 16 per cent, to their highest level since early 2015.
The loser? Boeing. It asked the U.S. government to hit the C Series with prohibitive penalties, not because the plane was harming its business – Boeing doesn't even have a jet that competes with the C100 models sold to Delta Air Lines – but because it said it was afraid that, if a subsidized Bombardier got a foot into the market, it would soon land more and more sales, and eventually become a true competitor to Boeing.
The American company said that what it feared was the creation of another Airbus. And now, thanks to Boeing, the C Series is an Airbus.
Boeing wanted to stifle competition; instead, it has forced a sale, at rock-bottom prices, to Boeing's chief competitor. Boeing got a black eye; Airbus got a brand new product, for free. Not exactly the art of deal.
Speaking of which, the final winner is: Donald Trump. Maybe.
Airbus says that, if the U.S. penalties on the C Series are upheld, it can get around them by assembling the jets at an Airbus plant in Alabama. Which is a fine outcome if you're Airbus, but not if you're Ottawa or Quebec City. What were all those taxpayers dollars supposed to have bought? Their only argument is that they were buying jobs.
But when Mr. Trump's government threatened to block the import of a product, the company behind it raised the possibility moving production to the U.S. – exactly what a protectionist threat is designed to encourage.
This week, Bombardier dodged a bullet, Airbus won the lottery, Boeing got kicked in the shins – and Canadian taxpayers were handed a new flight plan, to destinations unknown.