Canadian Press, MONTREAL (CP) – Canada's aerospace industry “missed the train” on subcontracting opportunities for the new Airbus A380 jumbo jet, but is hoping the country does better on the latest Boeing program, says the new chief executive of the Aerospace Industries Association of Canada.
Peter Boag, who assumed his position last week, said in an interview that it's crucial for Canadian companies to position themselves early to get on board large international aerospace programs.
In the case of the Airbus A380, said Boag, the major partners are already picked and the program is well underway.
“To a certain extent the train has already left the station,” said Boag. “There are a number of Canadian suppliers but . . . I think we could have done better. There are some lessons that we could learn.”
For example, Canada's aerospace flagship, Bombardier Inc., builds components for the A330 and the A340 but nothing for the A380, said company spokeswoman Sylvie Gauthier.
But while the A380 is the world's largest civil airplane, a potentially larger civil aircraft program on the drawing board is Boeing's 7E7, a mid-sized family of aircraft emphasizing fuel efficiency.
Boeing partners assembled so far include Fuji, Kawasaki and Mitsubishi from Japan and Latecoere of France. Boeing spokeswoman Lori Gunter said the only Canadian company on board so far is Boeing's own Canadian facility in Winnipeg.
Scheduled to be formally launched next year, Boeing expects to sell 2,000 to 3,000 of the aircraft over 20 years, Gunter said.
Although Canada is the fourth largest aerospace power after the United States, France and Britain, “we're still a relatively small player,” said Boag.
Ninety per cent of Canada's aerospace output, worth $21.5 billion last year, is civil. Boag said the country needs a bigger defence component to balance out.
Canada has done well on bids for the U.S. military Joint strike Fighter program, with at least 18 Canadian companies like Magellan Aerospace Corp. getting contracts.
The next major opportunity is the American National Missile Defence program.
While the Canadian government contributed $150 million to the Joint Strike Fighter project, Ottawa has so far been noncommittal to the missile program, which evolved from the Reagan-era Star Wars anti-missile program.
Boag said the industry is impatient waiting for Ottawa to help the industry take advantage of new technologies surrounding the program, to support Canadian security, and to “send a very positive signal in terms of where Canada stands with its allies in the joint defence of North America.
“Our issue is that if you don't soon make a decision, it will be made for you.”
There are many critics of federal support for the industry provided through research grants, financing of aircraft sales and other programs.
Walter Robinson, federal director of the Canadian Taxpayers Federation, says the industry and governments should be at international forums demanding all countries stop the subsidies. Robinson says they say distort the market and lead to inefficiency.
Boag replies that this is “a naive view. In a perfect world, government intervention would not be involved and would not be required; we don't live in a perfect world.”
Boag said governments from South Korea, Taiwan, China and Brazil are working with private industry to develop indigenous aerospace industries.
“If all those countries are doing this because they see the value of aerospace, why are we having such difficulties with Canadians in general and the government in understanding the value of aerospace to Canada?” he asked.
Average employment in the sector in Canada dropped to 78,835 workers in 2002 from 83,600 in 2001, as a result of the downturn in world aviation that began in early 2001.
Boag says employment will drop again slightly this year, but he believes it is at the bottom, with an industry upturn expected by 2005.
