There are so many things wrong with Bombardier Inc. right now that it is hard to know where to start. Which is not to say it is not a viable company, or that its role as an aerospace and transportation leader in Canada isn't critical to the country.
But for Quebec to bail out Bombardier's struggling C Series jet program, as it did last week, and then go begging to Ottawa for a matching $1-billion cheque, when the company is plainly in distress is poor stewardship of the public purse.
Bombardier's failings are mounting. The City of Toronto said last week it will sue the company over its incomprehensible failure to deliver new streetcars on time. A day later, the company announced a $4.9-billion third-quarter loss (all figures in U.S. dollars) due to failed or failing signature aerospace programs. It cancelled production of the Learjet 85 because of a lack of demand, to the tune of $1.2-billion. And it took a $3.2-billion write-down on its troubled C Series jet program, which has been hobbled by poor management and slow sales.
Even without those massive items, the company had a poor quarter, with shrinking revenues and a profit that has been wiped out. The only good news Bombardier could muster was the announcement that Quebec will pay $1-billion to become a minority partner in the C Series program, and that Ottawa would be asked to match the bailout.
Ottawa should say no. Under Quebec's deal, the family-run company retains control of operations in spite of the bailout. There is just too much evidence that Bombardier is not well-run enough to merit that kind of unconditional largesse.
It could in fact be argued that the company's most reliable source of revenue has been governments scared to see it fail. Critics say that the company has become dependent on handouts, to the point that, when the C Series ran into problems, the company threw money at it instead of addressing management issues, because it knew it could always rely on taxpayers in a pinch.
Bombardier is perhaps too big to fail. But it should no longer be handed cash without having to relinquish control. If Ottawa wants to get involved, it must demand changes at the top, or have a real say on the board. Any other course would not be proper guardianship of the public's money.