Government Announces Sale of Short Brothers to Canada’s Bombardier
LONDON (AP) _ The government said today it would sell Short Brothers Ltd., the ailing Belfast aircraft and missile maker, to the Canadian aerospace company Bombardier Inc. for 30 million pounds, about $47 million.
The announcement ended months of speculation over who would buy the state- owned company, which is Northern Ireland’s largest employer, after the government said it planned to privatize it.
The Northern Ireland Office said Northern Ireland Secretary Tom King and Bombardier Chairman Laurent Beaudoin reached a formal agreement in Belfast this morning.
As part of the deal, the government has pledged to invest ″a substantial amount″ in Short Brothers, King said.
The government will inject 372 million pounds ($584 million) into Short Brothers and write off a 390 million-pound ($612 million) loan it made to Shorts earlier this year to help the company pay its debts.
The injection is subject to the approval of Parliament, but the Conservative government has a parliamentary majority that virtually assures approval.
″Bombardier recognizes the important position occupied by Shorts in the Northern Ireland economy and intends to acquire the company as a long-term investment and to maintain it as a complete entity,″ Northern Ireland Secretary Tom King told the House of Commons.
″Its objective is to develop the three main divisions of aircraft, aerostructures and missiles,″ King said.
Under the agreement, the Shorts name will be retained and the company will be kept intact for the foreseeable future, King said. But he said he could not guarantee all jobs would be retained.
″In the end nobody can absolutely guarantee jobs to anybody. If a business is not competitive, if in spite of new investment, in spite of new products, there is not the commitment and performance and it is not competitive, then there cannot be any guarantee of jobs,″ he said.
The acquisition was expected to be completed later in the year, subject to approval by Office of Fair Trading and European Commission.
Last month, Short Brothers announced it was laying off 700 workers, bringing the work force to 7,000, because of heavy losses. The company lost $223 million lin 1988 and another loss is expected this year.
Short Brothers’ most successful arm is its missile division but it also makes its own passenger short-haul airliners, the 360 36-seater, and the 330 30-seater, as well as aircraft components for other companies.
Bombardier, based in Montreal, is a manufacturer of mass transport vehicles. Its best known products are the Challenger series of business, cargo and commuter aircraft made by its Canadair aircraft manufacturing company.
Bombardier has a 46-seat regional commuter aircraft under development, the only serious rival to Shorts’ FJX twin-engined regional jetliner project, which now is to be scrapped.
Bombardier also is involved in research and development of missile components and pilotless surveillance aircraft.