£1bn sale of Bombardier to Kansas-based Spirit AeroSystems is set for completion
THE billion pound sale of Belfast aerospace giant Bombardier to Kansas-based Spirit AeroSystems will be formally completed this Friday, the company has confirmed.
The move has been heralded as a vote of confidence for the north's aerospace sector and as underlining "the incredible skills-base" of the Shorts workers.
It will also allow Spirit to expand its relationship with Airbus (for whom Bombardier is involved in the A220 wing-making programme) and open up further opportunities with Boeing.
Spirit agreed a year ago to buy the Canadian transport firm's aerostructures business in Belfast and Morocco, with a deal originally due to be completed in May.
That, however, ran into a number of regulatory issues, and the deadline was pushed back to October 31, raising concerns for the 3,000 staff employed at the east Belfast plant.
But yesterday, in a statement issued in Montreal, the Belfast wings-maker's parent said it has entered into an amended definitive agreement to sell its aerostructures business to Spirit, supporting Bombardier's strategic decision to reposition itself as a pure-play business aircraft company.
And a spokesman for its Belfast operation said: “We are delighted with today's announcement and look forward to becoming part of Spirt AeroSystems on closure of the transaction on Friday October 30. We cannot comment further prior to transaction closure.”
The total cost of the transaction is in the region of $1.2 billion, which includes $275m in cash and another $824m in liabilities, including government refundable advances and pension obligations, as well as certain adjustments to the parties' trading agreements favourable to Bombardier.
Under the amended agreement, Spirit - which is based in Wichita - will acquire Bombardier's aerostructures activities and after-market services operations in Belfast and Casablanca, and its maintenance, repair and overhaul facility in Dallas.
Éric Martel, president and chief executive at Bombardier Inc, said: “Today's announcement marks another milestone towards achieving our strategic goal of repositioning Bombardier as a pure-play business jet company.
“We are very excited about our future as a more focused company.
“The proceeds from this transaction and from the pending sale of Bombardier Transportation strengthen our liquidity and position us to begin reshaping our capital structure and address our balance sheet challenges so that we can achieve the full potential of our incredibly talented employees and our industry leading business jet portfolio.”
Jackie Pollock, regional secretary of the Unite union, said: “Confirmation of the acquisition is positive news and will safeguard jobs as well as vital economic output and demand. It represents a vote of confidence in Northern Ireland's aerospace sector.”
And the union is now urging Stormont and Westminster to follow it up with a robust long-term support package to safeguard all aerospace jobs
Unite's assistant general secretary Steve Turner said: “This is a hugely difficult time in aerospace, where the sector in Northern Ireland has suffered a contraction of 1,800 jobs over the last number of months through a series of redundancies.
“To finally receive confirmation of this sale will therefore bring some relief to workers at Bombardier and indeed across the broader aerospace sector. This news shows that there is a future for aerospace – one that is rooted in the incredible skills-base of these workers.”
The north's aerospace cluster comprises 220 companies employing 10,000 people, and the sector directly generates £1 billion in output a year and contributes more than £2 billion to the region's entire manufacturing output.
Mr Turner added: “It's vital we see follow-on intervention by the Stormont Executive and Westminster, a robust long-term package of support similar to what the French and German governments have done to safeguard aerospace jobs there, otherwise it puts our bsinesses at a competitive disadvantage.”
In June Bombardier announced that 600 permanent and agency jobs would go as a result of "extraordinary industry interruptions and challenges caused by Covid-19", and in August it said a further 95 jobs would go.