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U.S. shutdown affecting Canadian aerospace firms

Oct. 15, 2013, Montreal - A partial U.S. government shutdown appears to have limited impact on Canadian businesses even though it's prevented aerospace companies like Bombardier from delivering aircraft to U.S. customers and collecting millions of dollars in sales.


October 15, 2013
By CTV News

Oct. 15, 2013, Montreal – A partial U.S. government shutdown appears to have limited impact on
Canadian businesses even though it's prevented aerospace companies like
Bombardier from delivering aircraft to U.S. customers and collecting
millions of dollars in sales.

The Montreal-based manufacturing giant says it can't ship two regional
aircraft, with a combined value of about US$75 million, because the
Federal Aviation Administration has laid off employees that register the
new planes.

 

Banks require a registration number to close the financing and pay the manufacturer.

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"It's a nuisance," Bombardier spokesman Marc Duchesne said Thursday.

 

Bombardier says the shutdown is having a "minimal" impact on its
business jets and that it is working on confidential contingency plans.

 

The General Aviation Manufacturers Association said the political
dispute in Washington could significantly threaten aircraft deliveries
for the entire fourth quarter, which typically accounts for 35 per cent
of annual shipments, or about US$8 billion.

 

In addition to the impact on commercial aircraft, the group said the
registry closure could hold up 156 small-sized and business aircraft
valued at almost US$1.9 billion that are scheduled for delivery in the
first two to three weeks of October.

 

Bell Helicopter said it has also been unable to register and de-register aircraft.

 

"Without the FAA's involvement, we cannot ship aircraft from our
Canadian manufacturing site into the U.S., nor can we deliver aircraft
to customers here in the U.S.," said spokeswoman Bridget Garcia.

 

The Quebec-based company couldn't say how many aircraft deliveries are on hold but noted there is no impact on employment.

 

"We're just kind of waiting to see what happens and assessing the damage, so to speak."

 

Thousands of FAA inspectors have been furloughed, part of the hundreds
of thousands of government workers who have been temporarily laid off
over the budget battle in Congress.

 

The Canadian Manufacturers and Exporters said the shutdown is affecting
agri-food and pharmaceutical companies that rely on U.S. regulatory
inspections at the border not performed by customs officials and those
that sell to state and federal governments. But CEO Jayson Myers said
the impact has been "contained."

 

"I haven't been hearing a flood of complaints… so far this hasn't led
to major losses. It has meant that products have been stalled at the
border or contracts are delayed or payment has not been received," he
said.

 

Myers said Canadian firms that do business with small U.S. companies
could also be hurt by their inability to have business loans processed.
And banks, insurance companies and others in the financial services
sector could feel some effects if they are unable to access
government-prepared statistics and analysis.

 

But he said the impact on Canada will spread if the U.S. doesn't raise
its debt ceiling, prompting interest rates to rise on both sides of the
border and causing a "chilling effect" across the economy.

 

Agri-Food Export Group Quebec said it hasn't received any complaints
from members exporting to the United States. But CEO Andre Coutu said
companies have been forced to turn to custom brokers to access basic
information because several U.S. government websites no longer update
their information.

 

He said the USDA is also no longer giving nutritional label approval.

 

Ron Davidson of the Canadian Meat Council said new labels aren't being
approved for processed meat being exported to the U.S, but the group
hasn't received any complaints from members.

Canadian meat suppliers are able to take back their products for sale
in the domestic market if samples sent for testing take too long to
process.

 

Some U.S. car dealers have been unable to get their hands on some
vehicle models because the Environmental Protection Agency isn't
certifying if they meet emissions standards. But Huw Williams of the
Canadian Automobile Dealers Association said Canadian dealers typically
have more than 30 days of inventory.