MONTREAL — The Mitsubishi Aircraft Corp. is putting down roots in Quebec, unveiling plans for a Montreal-area product development centre after reaching a deal in June to buy Bombardier Inc.'s regional jet program.
The office will be part of the company's push to get a single-aisle airliner off the ground in 2020 as it doubles down on regional planes. It plans to hire 100 engineers and certification specialists in Montreal within a year to assist the point team in Washington state and facilities in Nagoya, Japan, where final assembly takes place.
The Quebec government is lending Mitsubishi $12 million, which will be forgiven if the Japanese firm provides high-paid employment for 250 workers over five years, Premier Francois Legault said.
Legault sought to justify the loan to a multinational that generated more than $50 billion in revenue last year and in a sector that already suffers from a shortage of skilled labour.
"What I understand is that they had three scenarios, three business cases — one in Japan, one in the United States and one in Montreal. And the package, including the expertise available and also the financial incentives, the best proposal was coming from Montreal," he told reporters Thursday.
Alex Bellamy, the company's chief development officer, said the loan helped Mitsubishi to settle quickly on the Montreal area, which has a rich cluster of aeronautics firms, after the idea was first floated at the Paris Air Show in July.
"I think the speed was unprecedented," Bellamy said. "And the incentivization in terms of helping us establish a footprint, the commitment that the Quebec government gave to us just made us believe this is a good place to do business."
Bellamy said Mitsubishi Aircraft, owned by Mitsubishi Heavy Industries Ltd., aims to seize on the region's technical expertise to develop the SpaceJet airplane family.
Launched in 2008, the regional jet program has seen numerous setbacks, with the first model — then known as the MRJ90 — initially scheduled for delivery in 2013.
That 76-92-seat plane, re-dubbed the M90, is now expected to enter into service next year, to be followed in 2023 by the 70-88-seat M100.
"My role and my team's role is to certify and develop aircraft. This our No. 1 priority. And breaking into the aerospace business is one of the hardest businesses to get a foothold," Bellamy said.
Mitsubishi is setting its sights on the North American market, where it anticipates high demand. Nearly 40 per cent of a forecasted 5,100-plus regional jets around the globe will need to be delivered to the continent in the next 20 years, according to the company. In Canada, more than two-thirds of all passenger flights are on regional jets — defined by Mitsubishi as 100 seats or fewer.
Mitsubishi stressed the higher yield potential from the SpaceJet family, which devotes more space to pricier cabin seating to boost revenue from passenger upgrades. The appeal of the plane, which has no middle seat, also stems from a stress on comfort, with wider seats, higher ceilings and more space in the overhead compartments.
The International Association of Machinists and Aerospace Workers union called the 250 new engineering jobs "good news," but also highlighted job losses associated with the wind-down of Bombardier's CRJ regional jet program.
Mitsubishi's US$550-million purchase of the floundering CRJ Series aircraft saw the company scoop up the program's maintenance, support, refurbishment, marketing and sales activities, but not its manufacturing operations in Mirabel, Que.
"We believe that Mitsubishi's interest in our aerospace ecosystem should be seen as an opportunity to secure their jobs," David Chartrand, president of the machinist union's Quebec chapter, said in a release.
Chartrand called for either an extension of the CRJ program — which continues to operate as it churns through the remaining backlog — or the establishment of a SpaceJet assembly line in Quebec.
Mitsubishi says it plans to rent office space this autumn in or near the Montreal suburb of Boisbriand, home to several aeronautics firms.
The CRJ deal, slated to close in early 2020, cements Bombardier's departure from commercial aviation following a three-decade run and paves the way for the plane-and-train maker to focus on its rail and business jet units.
This report by The Canadian Press was first published Sept. 19, 2019
Companies in this story: (TSX:BBD.B)
Note to readers: This is a corrected story. An earlier version incorrectly stated Mitsubishi Heavy Industries annual revenue.