Mitsubishi’s brilliant purchase of the Bombardier CRJ assets

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Bombardier caps commercial-jet exit with CRJ sale to Mitsubishi

CRJ’s maintenance, support, marketing and sales operations acquired–BIG +

CRJ’s Engineering Corps–Even BIGGER + 

Bombardier Inc. is selling its regional-jet business to Mitsubishi Heavy Industries Ltd., ending the Canadian company’s foray into commercial aircraft after more than three decades.

Mitsubishi agreed to pay US$550 million for the maintenance, support, marketing and sales operations of the aging CRJ program, the companies said Tuesday. The Tokyo-based manufacturer, which is developing the first Japanese-built airliner since the 1960s, will also assume liabilities of about US$200 million.

The deal caps a multiyear overhaul for Bombardier, which until recently had ambitions to challenge Boeing Co. and Airbus SE with an all-new single-aisle jetliner. As the so-called C Series plane suffered from delays and cost overruns, Chief Executive Officer Alain Bellemare unloaded that program and a turboprop line after taking the helm in 2015 and refocused Bombardier on business jets and passenger trains.

 

With the transaction, Mitsubishi gains an experienced engineering corps and a global-sales and support organization to help market its nascent jet lineup as the unprofitable CRJ winds down over the next year and a half. Mitsubishi is rolling out a roomier regional-aircraft line dubbed the SpaceJet, and it highlighted a new, lighter 76-seat model at last week’s Paris Air Show.

Mitsubishi has spent at least US$2 billion developing its initial plane, originally known as the MRJ, which has battled delays and slow sales due to its heavy weight that violated restrictions in U.S. pilot union contracts. The company, which sees global demand for more than 5,000 regional jets over the next two decades, is seeking to snare sales away from Embraer SA, particularly for U.S airlines.

After the deal closes, Montreal-based Bombardier will assemble CRJ planes at a factory in Mirabel, Quebec, working off the order backlog on behalf of Mitsubishi. Bombardier will also supply spare parts for the plane, which is expected to end production in the second half of next year, the companies said.

Bombardier has 1,600 employees at the factory, said spokesman Olivier Marcil. Of those, three quarters will join Mitsubishi while the rest remain to carry out the current CRJ production run. “We don’t expect to cut any factory jobs in the short term,” Marcil said.


Mitsubishi has made a BRILLIANT ACQUISITION, particularly of human assets. One of the most difficult challenges in becoming an aerospace manufacturer is the learning curve required to create world class maintenance, support, marketing and sales teams. The transition from the MRJ to the Space Jet was compelled by a poor customer response, which the company openly admitted!!!

Bombardier had its own problems, but the talent acquired in this transaction was highly regarded.

Canada’s aerospace industry is both sophisticated and more experienced in the global aircraft certification process. Mitsubishi’s package included the Quebec  experienced engineering corps. That transfer will be of great advantage to the new Japanese aerospace company. Designing, manufacturing and certificating a clean sheet airplane is not intuitive. Engineering oddly is both precise in its craft, but surprisingly capable of defining a large number of solutions on paper. Many a brilliant aerospace innovation, once included in the actual final drawings, just does not fly as expected. The Bombardier team will share some of those hard-learned lessons. GOOD BUY!!!

 



 

 

 

 

 

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