The Bombardier saga continues. After being handed billions in government subsidies, the value of the company’s shares has plummeted by more than 50% and the company is almost $10 billion in debt. Thousands of workers have been laid off and the government has lost hundreds of millions. The elephant in the room is obvious to all. The capitalist system has failed us.
On Monday Feb. 17, French rail transport company Alstom acquired Bombardier’s train unit for a total of CAD$10 billion. This came only four days after Bombardier threw in the towel after the final sell-off of its A220 project (former CSeries) in which CAD$6 billion was invested. Airbus agreed to pay US$591 million to acquire 75 per cent of the program. And despite the inability of this program to take off, the Quebec government took home the rest. This means that the Quebec government will have to include a $600 million loss in next year’s budget as its investment of $1.3 billion CAD in the program is only worth $700 million today.
These deals are part of Bombardier’s ongoing efforts to finance its debt. Last year, Bombardier offloaded production of several of its product lines to companies like Mitsubishi, Longview Aviation Capital Corp, CAE Inc. and Latécoère. Now, Bombardier is negotiating with Textron to sell more of its business units. This dismantling of Bombardier means growing uncertainty for thousands of workers employed by the aerospace giant all over the world.
The parasitism of capitalism in crisis
The capitalist crisis has laid bare the weakness of Quebec capitalism which has historically been heavily reliant on the state. Unable to compete on the global market, Bombardier’s CSeries program ran into problems and the Quebec liberals were happy to prop up Bombardier with $1.3 billion CAD of taxpayer money. In addition, the Caisse de dépôt et placement (Quebec Deposit and Investment Fund), which manages public pensions, invested $2 billion CAD in Bombardier Transport. That’s a total of $3.3 billion of public funds given to the private multinational with no strings attached. One year later, in 2017, Justin Trudeau gave Bombardier an additional 372.5 million CAD interest-free loan. But if capitalism is so great, why do private companies need public money at all? The fact of the matter is that capitalism is failing and requires life support to keep it afloat.
We have been told that handing billions of dollars to a failing private company is for our own good. The facts however prove otherwise. As of 2018, Bombardier employed 23,000 people in Canada, including 16,000 in Quebec. These are jobs that pay 1.7 times more than the national average wage. “We have to protect these jobs,” says Quebec premier Legault. This is the reason behind giving millions upon millions in taxpayer money to Bombardier. But does Quebec’s “national treasure” really care about saving jobs?
In 2015, Bombardier started a restructuring plan to “improve profitability and competitiveness”. Only one year after receiving $3.3 billion CAD from Quebec, the company announced that it would lay off 7,500 workers worldwide including 2,830 positions in Canada. In 2018, the company promised to slash a further 5,000 jobs, 3,000 of them in Canada. The latest round of layoffs in Canada started three months ago, affecting 550 workers at the Thunder Bay factory. Public funds are clearly not going towards saving jobs. So where is all our money really flying off to?
In 2015, Bombardier CEO, Alain Bellemare took home a total of $8.5 million CAD. One year later, top executives announced a 50 per cent increase in their annual compensation. This increase was put on hold following mass uproar against the executives’ use of public money. But these capitalist parasites couldn’t help themselves. In 2017, Bombardier’s executive compensation rose from seven per cent to a total of $33.4 million US As of 2019, Bellemare’s annual compensation, including his generous bonuses, rose to $10.63 million. That is, a 60 per cent salary increase in four years.
You would think that compensation was somehow related to a job well done. Not the case at Bombardier! Bombardier has an awful track record of delays and incompetence. It took the company a full 7 years of missed deadlines and threats of legal action to deliver 204 street cars to the Toronto Transit Commission. And after a delay of four years, Bombardier finally completed an order for 468 metro cars to the Société de transport de Montréal in 2018. In addition, Bombardier trains have been reported to be defective in London, New York and Switzerland. And its aircraft are no better; it’s infamous CSeries line (now A220) has had several engine related issues dating back to 2014. Bombardier is like an airplane with a failing engine. The only reason it hasn’t crashed is because of the billions of taxpayer dollars that continue to fuel it.
What we have here is a company that is floundering on the world market and cannot meet production deadlines.The Bombardier saga represents a microcosm of the current situation with the capitalist system, in all its glory. Under capitalism, inefficient companies like Bombardier are kept afloat with public resources. They act like parasites on society, draining our resources solely to protect the profit of the capitalists.
The Communist Manifesto explains that the state under capitalism is “but a committee for managing the common affairs of the whole bourgeoisie.” Both the federal and Quebec governments have been playing this role marvelously in regards to Bombardier. While companies like Alstom have swooped in to gobble up parts of Bombardier, there is no guarantee that any of these thousands of jobs will be safe on a capitalist basis.
In an open letter on Friday, David Chartrand, vice-president of the Fédération des travailleurs et travailleuses du Québec, (which has unionized machinists at Bombardier), said that wishing for the closure of Bombardier is equivalent to wishing for the collective impoverishment of the Quebecois. It is true that closing down the aerospace giant would jeopardize the lives of thousands of workers in Quebec and elsewhere in Canada. But we don’t have to choose between corporate bailouts or factory closures.
To truly protect high quality jobs, the labour movement must fight to nationalize Bombardier under democratic workers control. By placing Bombardier under public ownership, the working class could democratically manage production, free from the chaos of the world market and the profit motive. Workers at Bombardier know how to run production better than anyone and their knowledge and abilities, combined with a socialist plan to massively expand public transportation systems in every major city, could help save good jobs and combat the environmental crisis at the same time. This potential can only be realized if we break with the profit motive behind capitalist production and fight for an economy that puts human need before private greed.