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Canadian Defence Review

May 1, 2016

Defence players gather for Montreal Aerospace Innovation Forum
Bombardier, next-generation fighters and new business opportunities are top of mind, as more than 1,000 OEMs, suppliers, armed forces personnel and government procurement officials ponder supply chain innovations.

Aero Montreal’s innovation forum, wrapped up another successful conference Tuesday. Quebec’s aerospace cluster’s event, held at the Palais des Congrès de Montréal, also attracted some of Canada’s most important defence sector players.

These included Lieutenant-General Michael Hood, Chief of the Air Force Staff and head of the Royal Canadian Air Force, who made news by calling on the new Liberal Government to take another look at Lockheed-Martin’s F-35 Lightning II Joint Strike Fighter.

“I keep the advice I give to the government private. My job is to follow orders. But let me say this. In its mandate letter to the defence department the government asked for an open and fair competition for a next generation fighter,” said Hood. “You can’t have an open and fair competition if someone gets left out.”

The aerospace summit is also giving Quebec defence players a chance to rethink their strategies. The relatively pacifist province has not pursued defence opportunities, as effectively as it could have says one industry expert. “Quebec has to take a good hard look at itself,” says Martin Lafleur, senior director (innovation, human resources & defence) at Aero Montreal. “For example Ontario has its Southern Ontario Defence Association to speak out for its interests. We have nothing comparable here.”

Lafleur hopes that the province’s Liberal Government, which is preparing an aerospace strategy to be released later this year, will address that issue, and will make available the financing needed to set up a Quebec Defence portal that will link key industry stakeholders.

Bombardier and defence supply chains
Bombardier, which is currently in negotiations with the federal government to get assistance to bring its newly developed CSeries aircraft to market, was also a major presence. Colin Bole, its vice-president (sales and asset management), made a cerebral plea for the quiet, fuel efficient aircraft, arguing that it delivers $13 million more in value per unit, than competitor offerings.

The implications for defence sector supply chain players are serious. Bombardier gives business to several Quebec aerospace players who also do defence work. For example according to Mike Greenley, president of CAE Canada, the simulations and training provider sells both products and services, to Bombardier. Furthermore according to Paul Mercier of L-3 Communications, which sells aero-structures to Bombardier, the company insists on cut rate pricing, that is competitive with what it could get if it bought similar products in Mexico.

Bombardier, which is currently also in negotiations to sell the 100-to-150 seat planes to US-based Delta Airlines, has been hit by slumping demand for the CSeries, due in large part to recent low oil prices. Worse, the company does not benefit from a depreciated loonie in export markets, because many of its components are made outside the country and priced in USD.

Peter (at) peterdiekmeyer (dot) com

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peter@peterdiekmeyer.com

Peter Diekmeyer Communications Inc.