How once mighty Bombardier became politically toxic in Quebec

UPDATE:Bombardier has reported a $1.6 billion US loss for 2019. It isleaving thecommercial aviation business and has sold off its remaining stake in the A220 program formerly known as the C Series.

Read more on how the mighty company got to this point below, and see the latest developments here.

There was a time when, if the going got tough for Bombardier, it could count on a helping hand from the Quebec government. Those days might be over.

Bombardier is in debt, big time,to the tune of almost $10 billion US, according to an estimate from September. Last month, the company issued a profit warning, with analysts projecting that cash flow would be weak for the foreseeable future.

As its share price plummeted, a reportemerged this week that Bombardier is looking at selling itsbusiness-jet unit.

It was already tryingto get a decent price for its train division and was considering dropping out of the mid-range jet program it spent more than a decade developing.

In Quebec, where Bombardier is as much ahistoric institution as an economic one, it seemed to many like a fire sale was on. What would be left of the global empire that began in a Valcourt, Que., repair shop 83 years ago?

That sense of panicwould normally be enoughfor politicians to begin discussingthrowing a lifeline.Investors, though, might not want to hold their breath.

Can it survive?

"The government has already invested a lot of money in Bombardier," Premier Franois Legault said Wednesday, when asked, for the second straight day, whether a bailout was in the cards.

One day earlier, his economy minister, Pierre Fitzgibbon, offered the company some tough-love advice.

He told reporters in Quebec City thatBombardier's current debt is unsustainable and the company will likely have to selloff at least two units in order to have a future.

Bombardier Inc.is, for the moment anyway, composed of the A220 mid-range jet program (a joint venture with Airbus), a business-jet division (Bombardier Aviation) and a rail division (Berlin-based Bombardier Transport).

"Can it survive with the three business units it has today?The answer is no,"Fitzgibbonsaid.

He took it for granted that Bombardier will have to leave the joint venture, but that that won't free up enough cash.

"That leaves two operations.Can they co-exist? That will be difficult, because they have a lot of debt,"Fitzgibbonsaid.

It was a blunt assessment that underscored just how politically toxic it's become for Quebec politicians to signal openness to a bailout.

The Parti Qubcoishas gone so far as to say it won't back any financial aid to the company as long as it remains under the leadershipof CEO Alain Bellemare.

"We don't have any confidence in Bombardier's management," the party's interim leader, Pascal Brub, said last month.

Exasperation with Bombardier is becoming widespread.In the Montreal newspaper La Presse, an editorial ran under the headline,"Bombardier: their failure, your bill." In the Journal de Montral a headline warned,"Bombardier: Boondoggle in sight."

The C Series gamble

It wasn't so long ago that Bombardier elicited more sympathy fromQuebec's political class.

The company gambled big in the 2000s by betting it could develop a mid-rangejet that would allow it to compete with aerospace giants Airbus and Boeing.

Bombardier had never built that kind of planebefore;its expertise was in the sleek business jets favoured by high-rolling executives and celebrities.

The jet program dubbed the C Series was more expensive and took longer to develop than expected. It brought Bombardier to the brink of bankruptcy in 2016.

That was untenable for the then Liberal government of Philippe Couillard,whichfeared another Quebec company getting poached in a foreign takeover.

So Quebecslapped down $1.3 billion Cdn for a 49.5 per cent stake in theC Series program.The companyand thousands of high-paying jobs were saved or so went Couillard's reasoning.

But that goodwill soured when, a year later, Bombardier approved $32 million US worth of bonuses for its executives, who had just laid off 14,500 workers worldwide.

Under pressure from both the public and the government,Bombardier delayed the payout.

The last straw?

Though the C Series jets were well-received when theyfinally arrivedon the market, sales were initially slow, not helped by a massive tariff imposed by the U.S.

Bombardier, faced again with a cash crunch, solda controlling stake of the C Series program in 2018 to Airbus for $1, which renamed the jet the A220. A short time later, Bombardierannounced 2,500 layoffs in Quebec.

Quebec politicians were furiousand wondered what exactly the province was getting in return for its $1.3-billion investment. On Wednesday, Legault called hispredecessor's investment a "mistake."

TheA220is now selling like hot cakes. But in order to meet demandand build enough units to make a profit, the joint venture needs to increase production capacity.

That requiresmoney Bombardier simply doesn't have and which the Quebec government isn't willing to spend a set of factors thatlikely marks the end of the company'sattempt to play with the big boys of aerospace.

But if helping Bombardier remains toxic in Quebec, Bombardier's need to sell assets could turn urgent in a hurry.

With only so many parts left to sell, it may not be long before Bombardier is a shell of its former self.