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The Future Looks Bright for the Quebec Aerospace Industry

Quebec accounts for about 55 per cent of all aerospace activity in the country.


October 1, 2007
By Stacy Bradshaw


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For years, Quebec has enjoyed a position of prominence in Canadian
aerospace, although not without some controversy about public money
going into the industry’s largest company, Quebec-based Bombardier, to
finance new lines of aircraft. But with some new international programs
coming on stream and competitive changes taking place in the province’s
supplier base, Quebec’s position in the industry seems well entrenched
mid-way through the decade.

Quebec
accounts for about 55 per cent of all aerospace activity in the
country. It is home to four of the world’s leading OEM companies, the
country’s principal airline, Air Canada, and major civil aviation
bodies such as the International Air Transport Association (IATA).

Quebec’s
success as an aerospace centre rests on a number of factors: attractive
research and development tax credits through Investment Quebec; the
province’s position as a gateway for European companies to the rest of
Canada and the United States; and the existence of an extensive
infrastructure of research centres and aerospace educational
institutions to support the industry.

“Quebec has always been
the major aerospace presence in Canada,” says Sue Dabrowski, Executive
Director of the Quebec Aerospace Association, the largest provincial
aerospace association in the country representing 206 Quebec companies.
“This is the place to be because proximity to them (OEMs) is, in many
cases, what gets contracts. We also have the most attractive R&D
tax credits in all of Canada and the research centres and schools to
support aerospace.”

Aerospace is one of Quebec’s most important
industries, generating sales of more than $10 billion last year and
employing 36,900 people. One of every 200 residents in the province
works in aerospace, which is Quebec’s largest exporter and represents
eight per cent of all manufacturing activity in the province.

Quebec
is home to major OEM companies Bell Helicopter, Pratt & Whitney,
CAE and Bombardier. There has been controversy over the years around
the issue of spending public money to help Bombardier finance aircraft
development, including the $2-billion development costs of the new
C-series 100 plus-seat jets. “The CRJ was an important, big development
in 10 years,” says Charles Dieude, Director of the Transportation
Department with Quebec’s Ministry of Economic Development, Innovation
and Export. “The market for the CRJ is getting smaller and smaller and
everybody agrees that the new market in the future is the 100-plus seat
jets. It is very important for Quebec and its subcontractors. We hope
it will work out and the assembly line will be in Quebec.”

Bombardier’s
Board of Directors has approved the new C-Series project, which is
expected to create about 5,000 assembly jobs, half at Bombardier and
half with suppliers, and a minimum of 3,000 Bombardier jobs on the
manufacture of the wings. How much work might go to Quebec-based
suppliers is still uncertain. “The Board of Bombardier just recently
approved the go-ahead but no decision has been made yet on suppliers or
the site of the final assembly,” says Sylvie Gauthier, Director of
External Communications, Bombardier Aerospace.

While the
C-Series and Bombardier’s current financial difficulties continue to
grab news headlines, the aircraft manufacturer has had some other news
to report. Recently it celebrated its entry into the next generation of
ultra long-range business jets with the maiden flight of the Global
Express XRS, a faster version of the original Global Express with
greater fuel capacity and improved performance characteristics at
hot-and-high airfields. The company has also recently notched some 30
CRJ sales and late last year announced the launch of the Learjet 40 XR,
an enhanced version of the Learjet 40 light business jet.

Bell
Helicopter Textron Canada recently announced a $ 700-million (Cdn.)
program to design and produce a new family of four light helicopters
over the next 12 years. The MAPL (Modular Affordable Product Line)
program is expected to employ about 600 full-time employees and sustain
Bell’s facility in Mirabel. The program is being financed jointly by
Bell and the federal and Quebec governments through Technology
Partnerships Canada and Investment Quebec.

Most of the work on
the MAPL program will be done in Canada. “We will be sourcing work
globally, but traditionally we have been well served by suppliers in
Quebec and the rest of Canada,” says Michel Legault, Bell’s Director of
Business Development. “We don’t intend to change that.”

Based in
Longueuil, Pratt & Whitney Canada is a world leader in aviation
engines for business, general aviation and regional aircraft,
helicopters, and for industrial applications.

The company is the
largest investor in research and development in the Canadian aerospace
sector and one of the top three in all of Canada. Despite the economic
downturn in early 2000, Pratt and Whitney continued to invest an
average of $400 million (Cdn) a year in research and development. “We
believe that this strategy of constant innovation, and our wide range
of products and services, positions us to emerge stronger as the
industry continues to recover,” says President Alain M. Bellemare.

Pratt
and Whitney has been expanding its business base since 2000 with 20 new
engine applications that will be coming in service by 2007. These
include the PW308C, Pratt’s largest turbofan engine, now in service on
48 Falcon 2000EX aircraft in Europe and North and South America, and
the PW307A engine on the Dassault Falcon 7X.The PW600 turbofan engine
series for the Cessna Citation Mustang and the Eclipse 500 is set to
become a major participant in the new market of air taxis and
limousines. “From the interest we are seeing in this market segment, we
believe that the opportunities are quite significant,” says Bellemare.
“We are encouraged by the sales volume projects of the various OEMs,
which represent thousands of aircraft over the next 10 to 15 years.”

CAE,
the world’s leading manufacturer of flight simulators, has played a
major role in the Airbus A380. CAE’s challenge was to build the most
complex simulator ever while the aircraft was being developed and
deliver it nearly a year before the airplane entered into service. CAE
delivered two simulators that were used to support the development of
the plane and has won five of six competed orders for simulators.
Airbus says it has received 139 orders for A380s from 14 customers.

While
the major aerospace players face challenges to develop new products and
technologies to maintain their large facilities and infrastructures,
the lower tier of the industry is facing a challenge of a different
nature – how to move up the value chain.

This is a challenge
facing small and medium-sized (SME) manufacturing enterprises across
the country in many different industries other than aerospace. Large
OEM manufacturers in Canada and around the world are becoming leaner
and more flexible and are reducing their supplier base. Suppliers are
being forced to increase their capabilities, assume greater business
and financial responsibilities, and produce larger work packages.

“The
dynamic in Quebec is changing,” says Dabrowski. “They’re no longer
being spoon fed by the OEMs. They’re having to go out and search and
hunt for opportunities and partnerships.”

Over the last three
years, JSR2 has brought together four small and medium-sized aerospace
companies to offer OEMs fully-integrated machining, assembly and
kitting services, more complex machined components, and project
management capabilities. Collectively, Alta Precision, Leesta
Industries, Mesotec and Air Ground Equipment have 240 employees, more
than 100 CNC machines and $35 million in sales from major customers
such as Pratt and Whitney, CAE, General Electric and Bombardier.

“It’s
the way to meet the requirements of the OEMs who now are wanting us to
make the parts, do the assembly and manage the whole package,” says
Giovanni Bevilacqua, Director, Business Development. “As a group we
bring a lot more to the table than we can individually.”

One of
Quebec’s major advantages in aerospace is its infrastructure of
educational and research institutions. “We have a very well-trained
workforce at all levels from the shop floor up,” says Dieude. “When
companies arrive in Quebec they find there are a lot of well-trained
people to draw from.”

Aerospace education programs are available
through Concordia and McGill Universities, the Ecole de Technologie
Superieure (ETS), John Abbott College, Ecole Nationale de
L’Aerotechnique, Ecole de Metier de L’Aeronautique de Montreal, and
University of Sherbrooke.

In partnership with IATA, Concordia
University began the first aerospace Masters of Business Administration
program in the world in 1992. The program focuses on studies related to
the management of airlines, airports, air navigation services and
corporate fleets. “At the time it was unique in the world. We’ve had
graduates from China, Russia, New Zealand, Africa, Europe, Japan –
literally all over the world,” says the program Executive Director,
Dale Doreen. The Consortium for Research and Innovation in Aerospace in
Quebec (CRIAQ) brings together 17 large and SME industrial partners, 7
engineering schools, the Aerospace Manufacturing Technology Centre of
the National Research Council of Canada, and other organizations to
conduct aerospace research projects. CRIAQ is currently conducting 33
aerospace research projects.

“This is a very important forum for
companies and universities to come together and work as a team on
aerospace research and development projects,” says Dieude. “It gives
the industry contact with universities and provides a great training
opportunity for students. It’s a unique consortium to Quebec and unique
in the world.”

The economic slowdown in the early years of 2000
took their toll on the industry in Quebec, resulting in a decline of 10
per cent in aerospace employment in the province. The industry is now
trying to revive students’ interest in pursuing a career in aerospace.

“Since
the slowdown we’ve had trouble getting students into the field,” says
Dieude. “ We need to get out there and see the universities and schools
and promote that the future of the industry is bright. We some new
projects like the C-Series and MAPL, we can prove that we need people
and there is a future in aerospace.”