Whats Next for Bombardier?
So could that happen? Could there be a could Canada which is subsidized this company in the past come through with an infusion of cash to pay off debts or subsidies. Those never had any ambition. Come it's interesting. The Canadian governments made it clear. They keep a close eye on this. I don't know if they would step in adding any sort of rescued. He wouldn't be risky deal. Because it's not a case of giving body now. It's kind of. It's kind of dumb but it had to do. Quebec SAYS NO WAY. And they're not gonNA do more but that the Mahdi will go back to them next because developing new airplanes that go to keep developing nuclear plant. Wildaid pay down their debt. So they'll be back to the government looking for looking for some sort of support and that's just fact of life so so what's the next bit actually gets wrapped up into the eight hundred ten day? Two Twenty story because it affects Embraer Number Casino. Random Body a arrivals that go back to the very beginnings of all of this so some really by by by giving selling the twenty in its entirety of and the twenty five percent is owned by Quebec itself. In Abbasi's now I was totally under the age of twenty before. This airbus was always constrained in what it could do to the airplane because Bombardier had to match investment and body didn't have the money right so so it was sort of official throttle book done with the eighty twenty. Well that's been moved right. That governor has been removed they can ramp up action which they have to do in order to break even and and get the cost of their into wary should be they can stretch airplane. They can now basically. They can pump money into the bottom end of the of the narrow body airliner market to twenty they could bunny at the top end of the narrowbody market with three twenty one. Xl Exit and they can literally take the legs off. And the head of Boeing in that market they now got in essence blank sheet to go do what they want to that market. Which we're Boeing at the moment doesn't know which way to go where to going out to take it even kill it and it would only have cost them less than six hundred million right because that's how much they paid. You have the whole program dinner. They have complete freedom moment. It seems to be an airplane that the market wants so if they can find customers push production rate up than than they've been so so that that. Then that then puts the pressure on Boeing and rare who earned in the middle of trying to put this commercial aviation joint venture together. 'cause that no held up by the Europeans who are still reviewing and delaying a decision. And so and it's becoming critical that makes it critical for Embraer. What happens next in the rumor that we think the reason the Europeans haven't proved it yet is because there's a W. T. O. Large airliner tariff dispute between America and Europe. Airbus and Boeing and that there's another decision coming in May or June and everybody's waiting to see what kind of penalties Europe applies against the US. And how President? Trump reacts to that and the belief is that the Europeans may be holding this approval of Ambler as leverage one piece of leverage against trump tariffs. And so. It's a big ugly mess that Doesn't seem to have an easy resolution really. It's become almost critical to embarrass. You know they. They had a successful commercial aviation business before they went into this plan. Joint Venture Boeing sort from Boeing. Side Ed at the generally accepted reasoning is they did this as a response to. Airbus become involved in the twenty. Didn't have a response to an airplane to compete against twenty. They tied up with ember who had an airplane. That's not quite the same. But it's but they could probably get into that market plus. They had a big engineering birth force that Boeing could access etc etc but the intervening months. That's how long it's been going now. This this whole thing of the joint venture things more more difficult going forward for because their next generation of Egypt's is not selling the way the previous generation dates. So they they're not commercial side. Their future is not as strong as it might have seemed a couple of years ago. They are trapped in same business jet conundrum that everybody else's which is they have some great products but they're selling to the same customers over and over again they're not really bringing new people into the market and they they have to launch a new airplane. They haven't engineering workforce doing a lot of the moment. They have to put money into a new airplane the daily way that they can do it. It's the existing market increased competitive pressure push the pricing down even further. So you're looking at at at body number. Even though they're sort of coming super doing it differently a facing exactly the same Prussia's so could they come on with me here is what call it what you want them? Bardy? Am Rear something like that. Heard it I rare but you won't pay for it. Looks absolutely fantastic. Because if you put the budget let you would have the entire business jet industry one company from the from the Lightest Jed to the biggest cabinet. But you know Cabestan the market you. Would you would not reduce competition whatsoever and you would fundamentally doubled down on your product development demands because this market needs new products on regular basis. This is not like L. Industry. We did develop an airliner and you can milk it for fifteen years the same basic airplane fifty years. Sometimes the long business aviation because you're constantly selling back to the same customer base the only way to get the mantle of airplane you just to them is by offering them a battery plant. So it's like a comedy. It's a five year cycle. It's like oh but it's more like a college cycle and go to continually Roy existing customer base out of what they fly into your next offering. So it's a constant investment draw and and putting together would look Winston traders fantastic. But it wouldn't it. Would not solve industry's issues with overcapacity too. Many models too many manufactures. But I just want to add one final point there. Which is if you're a government official. In in one of these countries there may be a certain appeal to them combining because of course for probably a near mid term. It would guarantee that the John's work remained in May not do anything to help Biz have but when you are responsible for national champion like rare. Rda You definitely don't want to see it go away. And that's different than I don't think anybody would call Gulfstream or textron Cessna products necessarily national champions. I'm not trying to. I'm not trying to bruise. Their Egos and say that. They're not great companies. But I don't think America looks at them the way that Brazil looks at Embraer. In Canada. Looks at bombarding.