September 24, 2009
Boeing gives wings to Canadian aerospace industry
File photo: Gilles Labbé, President and CEO of Héroux-Devtek Inc, addresses members of the Media and Sam Hamad (foreground), Québec Minister of Employment and Social Solidarity at Heroux Devtek plant in Longeuil on October 4, 2007. A financial contribution was granted by Investissement-Québec and Emploi-Québec to Héroux-Devtek. Héroux-Devtek supplies the Aerospace market in both the commercial and military sectors with landing gear, airframe structural components including kits, and aircraft engine components.
Photograph by: Vincenzo D'Alto, Gazette File Photo
Montreal Federal ministers fanned out across Canada yesterday announcing aerospace contracts to local companies by Boeing Co., which received a $1.15-billion order from Ottawa last month for 15 of its CH-147 Chinook helicopters.
The contracts are not expected to create any jobs, but will maintain jobs in a precarious industry that has fallen on very hard times, said one recipient of the contracts.
Héroux-Devtek Inc. president Gilles Labbé, in fact, was the beneficiary of one of the most important deals announced yesterday as sole supplier of the CH-147’s landing gear – perhaps the most important, although neither Labbé, Christian Paradis, minister of public works and government services, nor Eddy Morin, Boeing’s Canadian business representative, would say how much the deal is worth.
Morin said that Boeing has so far identified sub-contracts for Quebec firms that total $231 million to work on the Chinook. But he and Labbé would not say how much of that is the share Héroux-Devtek will get for its landing-gear deal.
Boeing gave a major lift to the Longueuil company with a deal that extends beyond the 15 CH-147s bought by Canada. Héroux-Devtek will produce the landing gear for all the Chinooks that Boeing sells internationally for the next four years. And perhaps of greater importance, the firm has obtained the intellectual property rights to build the helicopter’s landing-gear spare parts and to service the landing systems around the world.
In a brief chat with The Gazette later, he said that making replacement parts and repair and overhaul is even more important than original parts and launch contracts over the long haul.
“There are still 1,000 Chinooks flying around the world today,” he said, “and they’ve been making them since 1960.”
The announcement was one of three across Canada regarding so-called “off-sets,” or regional industrial benefits to domestic firms when Canada signs a defence procurement contract from a foreign company.
As part of the policy called the Canada First Defence Strategy, which stipulates that the amount of the regional benefits must in some cases equal the value of the contract, Industry Minister Tony Clement made a similar announcement in Toronto, where L-3 Wescam Inc. will make mechanical parts for Boeing’s CH-147 cargo chopper.
In Delta. B.C., Langley MP Mark Warawa announced a contract to Avcorp Industries Inc. to make the Chinook’s nose enclosure and some sub-assemblies for 400 helicopters, including the 15 for the Canadian Forces.
Clement said that the deals “draw significant investments to our economy and create high-quality local jobs.”
In Longueuil, Paradis initially said that the Boeing contracts would “result in 5,500 direct jobs and 15,000 indirect jobs – and that’s no small feat.” But he was more precise later, saying that they would, in fact, “provide (continued) employment for 5,500 people (currently employed).”
Claude Lajeunesse, president of the Aerospace Industries Association of Canada, said the deals “will provide the necessary flexibility and motivation to attract the right investments and target the technologies of the future and will lead to more strategic and beneficial investment decisions by companies.”
“This announcement … paves the way for Canadian industry to shift from the traditional model of being ‘local suppliers’ to being global players.”
He added that the agreements will focus “on the technologies of the future … and open doors to global opportunities and new world product mandates for our suppliers.”
Aerospace industry sales total about $23 billion a year, and the sector employs about 83,000 people in Canada, roughly half of them in Quebec.
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