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Guest Carioca

"Bombardier needs to follow Embraer's example"

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source : GlobeAndMail.ComThursday, March 18, 2004 - Page B2 " Where to start? How about Brazil, maker of the Embraer regional jets, which are moving up the value chain with bigger models and bagging more and more orders, thanks in no small part to fat government financial support (see World Trade Organization battles passim). In effect, the regional jet market, once owned by Bombardier, is bifurcated, with airlines now splitting their orders between the two companies. The buyers' goal is to keep both players alive, all the better to play the Canadians and Brazilians, and their governments, against each other. So long as this game persists, Bombardier's aerospace margins will be squeezed. While Bombardier is fighting the Brazilian government, it is also fighting the Canadian government. Bombardier needs a bigger jet, one with 100 seats or so, to match the newest Embraer E-Jets. Developing the new series will cost billions and won't happen unless federal and provincial governments subsidize the effort. If the governments balk, Bombardier's regional jet line will be in trouble. How about that for a political problem? The fact is, Bombardier cannot be an aggressive player in this market unless the government has an aggressive policy to make it a player. "

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