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Aerospace Cluster

October 2004

Aerospace Cluster

(French edition ISBN 2-923013-24-7 )

Legal deposit: March 2005Bibliothèque nationale du QuébecNational library of Canada

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ISBN 2-923013-25-5

All rights reserved for all countries.The content may not be copied in any way or translated in whole or in part without the permission of the Communauté métropolitaine de Montréal.

Aerospace •5

Note to the readerThrough its Economic Development Plan, the Communauté métropolitaine de Montréal (CMM), has adopted a competitiveness strategy centred on dynamic and innovative business clusters. In the fall 2003, the CMM launched a cluster identification program for metropolitan Montreal. This marked the first phase of a process leading to the development and launch of an integrated economic development and innovation strategy.

For each of the sectors studied, the CMM wishes to join forces with all the territorial bodies and economic stakeholders concerned. It means to concentrate its efforts on its own role of planning and coordination and does not intend to take the place of existing players and decision-makers in the field, whose role it is to agree on a development plan under the supervision of a relay organization representing their sector.

This document is divided into two distinct sections:

• The first section presents a configuration of the Aerospace cluster; • The second section groups together the ideas of the main players of that particular cluster and

their thoughts on future development.

The cluster configuration was based on documentary research confirmed by stakeholders in the cluster itself. Comments were then made by industry officials in the ministries concerned. This first section describes the value chain of the cluster and goes on to identify the organizations or infrastructure contributing to its development. Finally, as economic development transcends administrative or political borders, potential links with other regions of Quebec are indicated, taking into account the niches of excellence developed by certain regions under the ACCORD (Action concertée régionale de développement) program.

While the first section of the document is inherently factual, the second is more subjective, since it reflects the perceptions of the main players in each cluster. These thoughts were gathered in the strictest confidence so as to produce a maximum amount of data. They are focused on two main themes, the state of relational assets and growth strategies. Since we know that relationships between stakeholders are the first source of innovation, it is necessary to identify the relational flow between the various components of the cluster. In the same way, in order to set priorities, we need to know which strategies for growth are favoured by the players in the field.

This document is thus intended as a catalyst for priority actions aiming to energize the strategic process of the cluster and to give direction to its innovative thrust. The process will be carried out in a spirit of openness and dialogue which will eventually enable the Montreal metropolitan area to assert its distinctive capabilities among the world’s most innovative and prosperous cities.

Michel LefèvreConsultant – Economic DevelopmentCommunauté métropolitaine de Montréal

Aerospace •6

Aerospace

A World Leader

Industry Chain

A Branched Structure

Prime Contractors

Integrators

Equipment Manufacturers

Subcontractors

Support Equipment

Services

Development Factors

Research

Training

Financing

Government Services

Infrastructure

Associations

Assessment and Outlook

A Period of Sweeping Change

Interregional Links

Elsewhere in Quebec

Relational Assets

A Major Transition

Strategic Elements

A Common Strategic Plan

Avenues for Growth

Remaining a Key Player

Conclusion

A Much-Needed Common Vision

Appendix

Sources / Individuals Consulted

Credits

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Aerospace •7

A world leaderIt is worth pointing out to begin with that the aerospace industry includes both the aviation and space industries. The aviation industry includes the manufacture and repair of aircraft (planes and helicopters), engines, materials and aircraft parts. The space industry encompasses the manufacture of missiles, spacecraft and launch systems, and related equipment such as flight simulators, ground satellite stations, air traffic control systems and ground handling equipment for aircraft and commercial airliners.

Growing internationalization

Despite the slackening of the world economy, the aerospace industry, excluding the countries of the Former Soviet Union and China, posted sales of around US$250 billion in 2002, a drop of 10%, and employed 1,150,000 people. The United States aerospace industry alone recorded sales of US$153 billion and directly employs 626,000 people. Aircraft manufacturers worldwide realized a business volume of between $70 billion and $110 billion depending on the year.

In 2004, the commercial sector represented 64.5% and the military sector 35.5%, proportions that should remain stable for the next ten years. Some 33,063 aircraft should be delivered, for a total value of $905 billion, of which $609 billion will come from commercial aircraft. Commercial 100-plus passenger transport planes will make up the largest proportion, with $494 billion, a 20% increase in value compared with the previous decade. During this period, the European share should increase, but beyond that time the arrival in force of the Lockheed-Martin F35 Joint Strike Fighter (JSF) and the Boeing 7E7 will bring the situation back to normal. Meanwhile, the rest of the world’s share will decrease. The United States’ share will remain practically the same at 56%, Europe’s will rise from 29.6 to 33.4% and that of the rest of the world will decline slightly from 13.8 to 10.8%.

Following the events of September 11, 2001, market share for the manufacture of commercial airliners fell from 60 to 40% and sales slipped from $50 to $30 billion. The fighter aircraft category is a far second, with a market of $142 billion over ten years, one third that of commercial airliners. Next in line are business aircraft ($92 billion), helicopters ($81 billion), regional aircraft ($60 billion), military transport planes ($46 billion) and trainer aircraft ($38 billion). The volume of sales of fighter planes and military helicopters will increase, but the expected revival in sales of commercial airliners for the period will keep the relative proportion of sales of civil and military aircraft constant.

All aeronautical manufacturing sectors will experience renewed growth up to 2009-2010, at which point they will start to decline. In 2013, it is expected that the production and sales of business aircraft, commercial airliners, military transport planes and helicopters will be higher than in 2004. Figures will remain stable for fighter aircraft, while a certain decline is expected for regional transport planes and trainer aircraft.

Higher altitudes of tech propulsion

The aerospace industry requires extremely high levels of technology. The military and space sectors are traditionally incubators for new technologies, which are then often transferred to the commercial sector.

During the last twenty years or so, Europe has played an increasingly important role in the 100-plus passenger civil aircraft sector, coming into competition with the United States, traditionally the dominant force in civil, military, and space aviation. Several other countries — Japan, South Korea, Taiwan, India, and Indonesia — have been attempting for years to develop viable national aviation industries. Only Brazil seems to have achieved this goal with its range of regional aircraft and military training planes, soon to be expanded by a group of business aircraft. For reasons of national security, strategy, and technological development, among others, aerospace is one of the most government-backed industries in the world.

Aerospace •8

Canada’s strength: specific niches

As a result of marked growth in the aerospace sector during the last ten years, Canada currently ranks fourth in the world behind the United States, the United Kingdom, and France, with sales of CAD$21.4 billion in 2003. More than 80% of Canadian production is exported. The principal target is the commercial market, which represents 90% of production.

Despite a net employment loss during the last two years, the 400 companies making up the sector currently employ 75,000 people. Canada is particularly known for its regional airplanes, business aircraft, small gas turbines, flight simulators, commercial helicopters, landing gear, and avionics and space applications.

Quebec at the heart of the Canadian industry

Quebec ranks sixth in the international aerospace industry, behind the United States, France, the United Kingdom, Germany and Japan, and ahead of Italy. Quebec leads the industry in Canada. The province is home to the majority of Canada’s prime contractors and in 2003 it accounted for 61.8% of the Canadian market, with sales of $13.1 billion. Ontario’s share has fallen over the years to 28.2%, due in part to employee cutbacks at the Bombardier facility in Toronto (formerly De Havilland) and at McDonnell Douglas following its takeover by Boeing. Next in line are Manitoba, British Columbia, and Alberta, with 3.4%, 3.1% and 1.3% of Canadian aerospace industry volume respectively.

As regards employment, Quebec accounts for 50% of Canada’s aerospace workforce, Ontario, 30%, Manitoba, 7.6%, British Columbia, 5%, Nova Scotia, 3.5%, and Alberta, 2%. The difference between Quebec’s share of sales and its share of the workforce is due to the presence of the prime contractors Bombardier, Bell Helicopter Textron Canada, and Pratt & Whitney, who integrate parts into their finished products originating not only from Quebec but also from the rest of Canada, the United States, and, increasingly, other parts of the world.

More than 80% of Quebec’s production is exported, two-thirds going to the United States and representing 12% of Quebec’s manufacturing exports. In comparison, the US aerospace industry exports 53% of its production and the European aerospace industry, 58%. Almost 90% of Quebec’s aerospace production is destined for the commercial market, compared to 68% in the European Union, 57% in Japan and 51% in the US.

Quebec’s aerospace industry, as well as Canada’s, has enjoyed spectacular growth during the last twenty years, particularly in the last ten. The attraction for regional aircraft, a market still dominated by Bombardier, the steady progression of the business aircraft sector, the installation of a helicopter manufacturer in the province, and increased demand for small and medium-sized turbines have all contributed to the growth of this industry in our province.

Quebec’s aerospace industry relies on the support of more than 260 companies employing 37,203 people in 2003. From 1995 to 2001, prior to the unfavourable economic climate of 2002, sales in this sector increased by more than 83% and employment by 31% for small and medium-size businesses and by 23% for prime contractors.

The main employers are Bombardier Aerospace, Pratt & Whitney, CAE Industries, Air Canada Maintenance Centre, Bell Helicopter Textron, Rolls-Royce, CMC Electronics, EMS Technologies, Héroux-Devtek, Honeywell Aerospace and General Electric Aircraft Engines.

The main clients of the aerospace industry in Quebec are airline companies and users of business aircraft and helicopters, clients of Bombardier, Bell Helicopter Textron and CAE, and companies specializing in aircraft maintenance, repair and refitting.

Aerospace •9

Quebec companies also supply aviation manufacturers abroad with complete packages (Pratt & Whitney), equipment (CMC Electronics, Thales Avionics, Messier-Dowty, etc.) and parts and services. Their clients include both private corporations such as Boeing, Raytheon, Cessna, Dassault and Airbus and public administrations like the Canadian Armed Forces, the US Air Force, the US Army and aircraft maintenance and repair companies.

The province of Quebec and the Montreal region constitute one of the world’s largest concentrations of this industry. One person in 180 works directly for the aerospace manufacturing industry here, compared to one in 270 in the US and one in 600 in France.

Montreal, fourth world capital

In spring 2003, there were 35,700 jobs in the metropolitan area spread across approximately 225 businesses where sales to the aerospace sector accounted for 50% of their business volume.

Most of the strategic infrastructure is situated in the Montreal area, which is in fact the final integration and assembly centre for Quebec and the rest of Canada. Parts arriving from Quebec, Canada and overseas are assembled here into aircraft, engines and systems. There is only one place outside Quebec where aircraft are manufactured — the Bombardier Dash8 and the Global Express – and that is in Downsview, a suburb of Toronto.

The manufacture of aerospace products employs about two-thirds of the workforce. The maintenance and repair of aerospace products and the manufacture of electronic parts for the aerospace industry make up the other one-third.

The aerospace industry has been the most rapidly growing manufacturing sector in Montreal over the last decade. Deliveries rose by 12% per year in constant dollars from 1993 to 2001. Aerospace products are the city’s biggest export.

The growth of Montreal’s aeronautical sector is largely due to the products manufactured by Bombardier. Since it introduced its first regional jet airplane in 1989, Bombardier has dominated the world market for regional aircraft and has become the world’s third largest commercial aircraft manufacturer, after Boeing and Airbus. Montreal is not confined to this one niche, however:

• Bell Helicopter Textron Canada is one of the two main producers of civil turbine helicopters. • Pratt & Whitney hold close to a third of the world market in small and medium-size gas turbine

engines produced for regional corporate aircraft and for helicopters. • CAE is the world’s second largest supplier of flight simulators and aeronautical training behind

the American company FlightSafety. • Messier-Dowty International holds 40% of the world market in landing gear. • CMC Electronics is a leader in the field of SATCOM antenna. • Rolls-Royce Canada is a key player in the maintenance and repair of aircraft engines.

Although it had been heavily focused on the military sector since the Second World War, Montreal’s aerospace industry is now mainly dependent on the commercial market thanks to the undeniable success of top-flight prime contractors and approximately fifteen world class integrators and equipment suppliers (avionics, simulation equipment, landing gear, structures, etc.), who can rely on a network of over 210 subcontractors and product suppliers covering the entire spectrum of specialities required to assemble an aircraft: parts machining, highly sophisticated software, surface treatment, composite materials, shot blasting, rapid prototyping, hydraulics, avionics, and electro-optics.

This group of factors places the Montreal metropolitan region alongside the world’s other major international aerospace centres – Seattle, Toulouse and Wichita.

Aerospace •10

All the large corporations and many of the small and medium-size businesses in the sector are certified ISO 9000, which means that 90% of their production meets these quality standards. Furthermore, the Quebec aerospace industry devotes nearly 10% of its revenue to research and development (R&D); these activities represent 70% of all R&D performed in Canada and enable the industry to remain at the cutting edge of technology and to constantly create new products to ensure its growth.

Concentration in Montreal, Laval, Montérégie, and the Laurentians

Although the industrial mass is heavily concentrated in Montreal, Laval, Montérégie and the Laurentians (87% of companies, 96% of employees, and 98% of business volume), it also exists to a certain extent outside the metropolitan region.

In the Montreal area, the aerospace sector accounts for 54% of businesses (141) and 68% of the workforce and business volume, due to the presence of the majority of the prime contractors, integrators, and equipment suppliers.

With 52 aerospace companies, Montérégie represents 19% of the workforce and 17% of the business volume, mainly due to the presence of Pratt & Whitney; Laval has 19 companies, mostly small and medium-size, representing 4% of the workforce and 1% of sales; the Laurentians, with 21 companies, including Bell Helicopter Textron, account for 8% of the workforce and 12% of sales.

Thus, except for small subcontractors, the Quebec aerospace industry is concentrated in the Greater Montreal metropolitan region.

Aerospace •11

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Aerospace •12

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Employment1 by Borough and City, 2001 — Aerospace Products and

1. Individuals 15 years of age or older who have a regular workplace or who work from home. People who have no fixed address are not included. N.B.: Figures were rounded to the closest multiple of 5; they may therefore not add up exactly to the sum of the components. Source: Statistics Canada, Employment by Place of Work, 2001 Census – Figures on Life Sciences represent NAICS code 3254.

Aerospace •13

Configuration

Aerospace •14

Industry Chain

Aerospace •15

A Branched StructureAt the top of the industrial structure of Quebec’s aeronautical industry are the prime contractors specialized in the construction of complete aircraft, helicopters, satellites and simulators.

Integrators deliver complete subsystems to the prime contractors, comprising all the avionics and cabin parts. Also, some fifteen equipment suppliers produce complete elements such as engines and engine accessories, avionics, communications equipment, electronic and electrical components, and landing gear.

At the bottom of the industrial structure, some 250 SMBs operate as subcontractors. They provide machined parts, casting, machinery, sheet metal, tools, screws, and software. Finally, a range of service providers supports the industry chain in the fields of design, marketing consulting, trials, maintenance and repair, and rapid prototyping.

Prime ContractorsThe five main prime contractors specialize in the construction of business aircraft, regional aircraft, tourist aircraft, satellites and helicopters. These companies make up 90% of sales and account for 80% of jobs.

Bombardier Aerospace and Bell Helicopter fall into this category. They coordinate the work of the different companies and supervise the specifications provided to them both on a technical level and with regard to manufacturing time. They carry out the final assembly and the flight tests of the products that they market. The Montreal region is also present in the satellite construction market through EMS Space and Technologies.

Leader in business aircraft

Bombardier is the leader in the business aviation field, cornering 25% of the market in 2003 with the Learjet, Challenger and Global families, which range from the 6-seat light jet, the Learjet 31, to the twin-jet ultra long-range 19-seat Global Express.

In its Dorval and Saint-Laurent facilities, Bombardier Aerospace designs and manufactures a part of its business aircraft product line. The Challenger 604, Global Express and Global 5000 are designed entirely in Quebec, while the Challenger 300 is designed in partnership with the team in Wichita, Kansas. The Challenger 604 and 800 (the latter being a corporate shuttle version of the CRJ200) are built in Dorval. The Global Express and Global 5000 are made in Downsview, but their interior layout is designed at the Finishing Centre in Dorval.

Bombardier’s “business aircraft” division suffered from the market slowdown that began in 2001. Nonetheless, worldwide sales of corporate jets are predicted to rise from 439 to 743 units and from US$6.7 billion to US$10.5 billion between 2004 and 2008. An economic revival recovery and the arrival on the market of the Global 5000 and Challenger 300 models should boost Bombardier’s “business aircraft” activities.

Strong competition in regional aircraft

In the market for regional transport aircraft, Bombardier is the leader, but the Brazilian manufacturer Embraer is close on its heels. Despite the economic slump and the events of September 11, 2001, the production of regional jets reached record levels in 2003 with 320 aircraft delivered (223 Bombardier and 101 Embraer). Bombardier only received 115 orders that year, however, compared with 219 for its Brazilian competitor.

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Aerospace •16

The turbo-prop Dash8 which, depending on the models, can seat 37 to 86 passengers, are built in Downsview, on the outskirts of Toronto. The Regional Jet CRJ200 jets are assembled in Dorval and the CRJ700 and 900 are manufactured in Mirabel.

Bombardier’s products are becoming outdated in comparison with those of its Brazilian rival. The CRJ200 launched in 1989 was based on the design of the business aircraft Challenger, developed in the mid 1970s. The CRJ700 and 900 are longer versions of the CRJ200, although they only have a commonality rate of 30%.

The company has decided to revive its program for a 100-seat regional jet, the BRJ-X, which it had put on hold in 2000. Its launch is expected to be announced before the end of the first quarter 2005. Embraer has already delivered the 170, a new generation 70-seater, the first in a range of planes that will include a 90-seater, the 190, and a 100-seater, the 195, currently being developed.

The almost certain launch of the Bombardier “100-seater,” the gradual replacement of the DC9 and Boeing 737 on many routes with regional aircraft and the changes to the “Scope clause” work regulations included in airline pilots’ collective agreements in the US will ensure Bombardier’s long-term survival in the market for regional transport aircraft.

Tourist aircraft: a very limited market

Ten small companies employing from two to twenty workers each make up the tourist aircraft manufacturing field. They produce small planes, helicopters or seaplanes from kits.

The German tourist aircraft manufacturer OMF, which inaugurated its facilities at Trois-Rivières airport in September 2003 to serve the North American market for construction, distribution and after-sales service, declared bankruptcy in December 2003.

Two satellite companies

The satellite equipment industry is represented by two companies located in the Montreal area. EMS Space and Technologies, in Sainte-Anne-de-Bellevue, is the leading player in the satellite field, with 650 employees. Formerly known as Spar Aerospace, this company designs, develops, manufactures, assembles, integrates and carries out trials of satellite subsystems and components and new products for satellite networks. The other company, ABB Bomem, founded in 1973, specializes in the design and manufacture of analytical spectrophotometers and in Fourier Transform Infrared Spectroscopy (FTIR).

One major helicopter manufacturer

The installation of Bell Helicopter Textron Canada in Mirabel in 1984 gave rise to the helicopter manufacturing sector in the province. In its 500,000 square feet Mirabel facilities, the company is responsible for the Texan manufacturer’s commercial product line, with the exception of convertibles. It has the mandate to manufacture and provide after-sales service for light and medium-sized Bell helicopters worldwide. Since 1986, over 2500 helicopters were built in the facility, with annual peaks of 250 machines, but only 125 in 2003.

The company, which employs 1600 people, is currently involved in the MAPL (Bell’s Modular Affordable Product Line) project, with a view to replacing the 206 line. The light single engine Bell 206BIII JetRanger, the 206L4 LongRanger and the 407, the 427 light twin, and the 430 medium twin, popular for executive, medical and offshore use, and the versatile 412 are all built in Mirabel. The manufacture of components is entrusted to fifty or so sub-contractors in the metropolitan region.

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Aerospace •17

IntegratorsIncreasingly, prime contractors are following the car industry model and significantly reducing the number of suppliers by demanding increasingly large and complex subsystems. This has led to the arrival of integrators, who ensure the assembly and delivery of complete subsystems on behalf of the prime contractors, such as cabin and cockpit installations, and cabin control systems.

In Quebec, contractors such as Bombardier or Pratt & Whitney require complete subsystems that are ready to be bolted in. A small number of companies assemble parts made by themselves and others and deliver complete subsystems to the prime contractors. Currently, they are present in two spheres of activity: avionics and interiors.

Thales Avionics Canada, formerly Sextant Avionique, integrates systems in Montreal like the ones developed for Bombardier (flight controls for the Global Express, flight board for the DASH8). The Montreal location aims to become Thales’ centre for excellence for regional and business aircraft.

Three companies are involved in aircraft interiors. Avianor specializes in the design and production of pilot seats, cabin equipment and carts. Flexibulb and Placeteco design and produce moulded plastics for aircraft interiors.

A world leader in simulation

The Montreal region is home to CAE Electronics, a leader in the design and manufacture of flight simulators, which now also offers aviation training services. To a lesser degree, Mechtronix and Lockheed-Martin Canada are also involved in the design and construction of specialized simulators.

Several small firms have succeeded in developing niches that have brought them international renown. Adacel specializes in designing and manufacturing air traffic control simulators, air defence radar simulators and virtual control towers. Engenuity Technologies is recognized for its design of specialized software for the development of visual man-machine interfaces generating fast interactive simulations for the aerospace, defence and transportation industries.

Equipment ManufacturersEquipment manufacturers specialize in the manufacture of aircraft subsystems: interior design, avionics, communications and ground navigation, electro-optics, cabin equipment, hydraulics and tires, engines and accessories, and landing gear. Their products equip the aircraft of all the world’s largest manufacturers. Most equipment manufacturers in the Montreal region are key world players in the aviation industry. Most are subsidiaries of major international groups, with the notable exception of CMC Electronics and Héroux-Devtek. They represent 7% of the aviation workforce in Quebec.

Within the United Technologies group, Pratt & Whitney Canada has the worldwide mandate to design, develop, manufacture and market turbofan, turboprop and turboshaft engines (and to provide the necessary technical support) to meet market needs for regional corporate aircraft, helicopters, utility aircraft, and auxiliary power units.

CMC Electronics (formerly Canadian Marconi, then BAE Systems Canada) designs and manufactures high-tech electronic products for aviation, infrared detection, global positioning, and astrionics.

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Aerospace •18

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Messier-Dowty Montreal, subsidiary of the European leader in the design, development, manufacture and maintenance of landing gear, produces the main undercarriage components of several Airbus models.

SubcontractorsThe some 250 subcontractors and suppliers represent 10% of sales and 20% of jobs. These small and medium-size businesses specialize in a wide variety of fields. Some manufacture engine accessories, subsystems and ground equipment. Others are involved in information technology, making software and measuring equipment, while others draw plans or make models. Some also work in the Petrochemical/Plastics cluster making lubricants, paint, composites and thermoplastics.

Many of these companies form part of the metallurgy manufacturing sector under one form or another. Included in these are casting companies and screw producers, and firms that specialize in cutting, heat treatment, surface treatment, shot blasting, soldering, sheet metal, etc. Others make machinery and tools, or do precision machining. They very often work for a restricted number of clients, sometimes even just one. Quality, punctuality and proximity are major advantages. Increasingly, prime contractors and equipment manufacturers are delegating to them responsibilities in R&D and production financing, which used to be handled by the order originators.

These businesses often find themselves competing with companies from developing countries such as China and India, which have significantly lower labour costs and whose governments demand foreign aircraft constructors ever larger industrial offsets in an effort to support the development of their own national industries. Most have instigated quality systems and either have ISO 9002 certification or are on the way to obtaining it, which will open the doors of world markets to them. They are equipped with computer hardware that can directly use the computerized data provided by the integrator for the production of the components.

Subcontractors have recently felt the need to form groups, notably to establish good relations with the prime aviation contractors and increase their commercial representation. This approach led to the establishment of the Quebec Aerospace Association (AQA) in 1997. The large majority are Quebec-owned companies. There is a marked tendency towards mergers or takeovers by larger companies from Quebec and abroad. Big names such as Goodrich, Honeywell and Lockheed Martin, who have small, specialized facilities in the Montreal area, form part of this group.

Aerospace •19

Support EquipmentThere is very little representation of the support equipment sector in the metropolitan region. Three companies produce specialized containers and one makes control towers.

Mil-Quip, James Dawson and Alubox design and manufacture various types of containers for transporting aerospace and electronic components, military standard packaging systems for sensitive electronic equipment, explosives and precision parts, and ATA 300 compliant special shipping cases for the transport of equipment and emergency oxygen canisters.

In the control tower sector, the Aeronav Group designs, manufactures, assembles and installs fixed or mobile air control towers, carries out integration, trials and support for electronic and electric airport systems, and manufactures radio navigation systems (ILS, VOR, DME, NDB, GPS). Its main clients are Nav Canada, the Department of National Defence, and various airport and civil aviation authorities worldwide

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ServicesA number of consultants specializing in operations, information, planning, logistics and engineering have sprung up around the manufacturers.

The largest sector remains the maintenance and repair of aircraft and engines. Skilled labour, relatively low costs and the weak dollar contribute to the growth of this activity. In constant progression, this sector is now comprised of some thirty companies. The largest, with 3700 employees, is the Air Canada Technical Centre in Dorval, which offers repair and major overhaul services for engines, auxiliary power units (APU), airframes and components, and a range of other specialized services.

The largest companies in the metropolitan region for engine maintenance and repair are Rolls-Royce Canada and Pratt & Whitney Canada. Exeltech, formed from the former InterCanadien maintenance department, has grown rapidly in the last few years due to aircraft maintenance contracts with airlines in the US and the company JetsGo.

The services sector also includes a group of small companies involved in design, calculation, certification, marketing, trials and control, and rapid prototyping.

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Aerospace •20

Development Factors

Aerospace •21

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rs ResearchBy its nature, the aerospace industry is a high-technology environment that relies enormously on research and development in a wide field of applications. The major companies in this sector have large internal research and development departments. This is the case not only for the prime contractors but also for several equipment manufacturers, who can often rely on the research and development done by the parent company or sister companies. The smallest companies have limited research capacities, although they are increasingly being asked to develop products that used to be designed by the prime contractors themselves.

Government Centres — Over the years, Quebec has benefited from the installation of a string of new public research centres, ranging from pure aeronautical research to materials, aerospace medicine, air and space law, and transportation economics. Quebec’s industry can count on the support of four public organizations specifically committed to research, one of which is the Consortium for Research and Innovation in Aerospace in Quebec (CRIAQ), whose role is to build links between the research centres, universities and businesses.

Launched in 2003, CRIAQ has the mission to undertake pre-competitive research in a collaborative framework between companies and universities. It is a non-profit organization set up with the aim of promoting and implementing industrial research projects at the pre-competitive stage, principally in universities, increasing the competitiveness of the aerospace industry and enriching collective knowledge bases in this sector through improved student training.

Located in Montreal, the Centre des technologies de fabrication en aérospatiale (CTFA) is a new initiative arising from a partnership between the National Research Council Canada (NRC) and Canada Economic Development for Quebec Regions. It is responsible for developing a core of skills and for producing modern aerospace manufacturing methods that can lower production costs slightly whilst maintaining a high level of quality, reliability and performance. Also part of the NRC program is the Industrial Materials Institute (IMI), whose goal is to develop technologies for procedures involving metals, polymers, ceramics and their composites.

Another federal organization, the Canadian Space Agency (CSA), in Saint-Hubert, has the mandate of coordinating all the elements of the Canadian Space Program, including the administration and management of contracts relating to Canada’s contribution to the International Space Station, to RADARSAT and to the Canadian Astronaut Office.

University Institutes — At the university and college level, there are a number of institutes and research units working in air law, aerospace medicine, and transportation and materials, such as the Institute of Air and Space Law at McGill University, the Aerospace Medical Research Unit at McGill University, the Centre de recherche sur les transports (CRT) at the Université de Montréal, the Centre de recherche appliquée sur les polymères (CRASP), the Centre de recherche en calcul appliqué (CERCA), the Centre de recherches avancées en micro-ondes et en électronique spatiale (POLY-GRAMES), the Concordia Centre for Advanced Vehicle Engineering (CONCAVE), the Analysis Group for Mechanical Components (GACM), the Centre for Characterization and Microscopy of Materials (CM)2, the Computational Engineering Research Group (GRMIAO), the J.-A. Bombardier Chair and the Concordia Centre for Composites (CONCOM).

College Centres — Some Quebec colleges have research centres that focus mainly on production problems in the aviation sector. For example, the Composite Materials Centre (CMC) of Saint-Jérôme, a technology transfer centre in the composite materials industry, is affiliated with the Cégep de Saint-Jérôme. Collège Édouard-Montpetit houses the Centre technologique en aérospatiale (CTA), which plays a key role in aviation and aerospace research and development and lends its support to SMBs in the aerospace sector.

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TrainingThe industry and the three levels of the education system (secondary, technical and universities) work closely together to provide manpower training. There are three types of training institutions in Quebec: universities, public technical secondary schools and colleges that train production workers and technicians, and public and private flight training schools, providing complete aviation training.

University Programs —Montreal, McGill, Concordia, Laval and Sherbrooke universities have set up a joint master’s degree program in aerospace engineering. Programs in mechanical engineering, electrical engineering, computer engineering and metallurgical engineering are offered as applicable at the bachelor’s, master’s and doctoral levels by the École Polytechnique de Montréal, McGill and Concordia universities and the École de technologie supérieure (ÉTS). The ÉTS and the Polytechnique offer specializations in aerodynamics, aeroelasticity, aircraft construction and dynamic stall, avionics, space technologies, materials and mecatronics.

Technical Studies — Several establishments offer professional and technical programs leading to graduate openings in the aerospace industry. These programs include techniques in machining, tooling, industrial design, mechanical engineering and processing of composite materials.

At college level, the École nationale d’aérotechnique (ÉNA) at the Collège Édouard-Montpetit offers college diplomas (DEC) in en aircraft design, avionics, and aircraft maintenance. It also offers courses leading to “attestation d’études collégiales” (AEC) diplomas as well as several other tailored training programs.

At the secondary level, the École des métiers de l’aérospatiale de Montréal (ÉMAM) offers six training programs leading to professional (DEP) diplomas and three programs culminating in professional specializations (ASP) certificates. The École de formation professionnelle Pierre-Dupuy offers a DEP in aviation mechanics and sheet metal work.

College Diplomas — A number of programs geared to the aerospace sector are taught in Quebec’s colleges. The most comprehensive programs are those at the John-Abbott College, which offers a DEC Aircraft Maintenance program approved by Transport Canada and another in aviation management – the management and training of pilots for commercial aviation.

The Cégep de Saint-Jérôme offers the only composite materials processing program in Quebec. This three-year course, designed to equip students for the job market or university, covers four areas of study: research and design, production, quality assurance, marketing and administration.

The cégeps of Saint-Laurent and Vieux Montréal, and Dawson College have various programs that can lead to jobs in the aerospace industry: industrial maintenance technologies, mechanical engineering techniques, electronic techniques, industrial design.

Flying Schools — The private flying schools for airplanes and helicopters in the Montreal region attract not only local students but also overseas students drawn by the notoriety of the Canadian Pilot Licence, low training costs and, in the case of Francophones from Europe and Africa, the use of French. One public training institute, the Centre québécois de formation aéronautique (CQFA), gives pilot training. The Bombardier, CAE and FlightSafety training centres provide comprehensive simulator training for pilots and mechanics of the business aircraft Challenger 600, 601 and 604, and the Global Express, as well as the regional transport planes of the CRJ200, CRJ700 and CRJ 900 series.

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FinancingIn addition to providing a full range of consulting, support, accompaniment, and trade mission services, the various levels of government offer subsidy programs and refundable credits to companies in the aerospace sector. Businesses in this sector can also rely on a group of specialized financial firms.

The aerospace industry’s needs do not lie solely in support for new product development but also in sales financing, due to a competitor in the regional transport aircraft sector who benefits from a high level of financing for its sales in overseas markets.

Government Assistance — Several government financial assistance programs are available to companies in the sector, some of which are designed specifically for these companies.

Programs such as the Strategic Support for Investment Program (PASI), administered by Investissement Québec — which replaces the Fonds pour l’accroissement de l’investissement privé et la relance de l’emploi (FAIRE, abolished March 31, 2004 — and the IDEA-SME Program of Canada Economic Development are open to all types of businesses. The PASI program is designed to attract foreign investment to Quebec, increase productivity and stimulate companies’ growth. The IDEA-SME Program seeks to encourage small and medium-sized businesses to undertake innovation or research, design and development (RDD) projects, or programs related to product marketing, services or technologies resulting from RDD work.

The Programme d’amélioration des compétences en science et technologie (PACST) by the Ministry of Economic and Regional Development and Research (MDERR) is aimed at companies carrying out activities to promote training and integration of new employees, whilst the Industrial Research Assistance Program (IRAP) by the National Research Council Canada includes a section on the market introduction of projects in the aerospace and defence technologies sector.

The technology investment fund Technology Partnerships Canada (TPC) operated by Industry Canada has nevertheless proven to be the most significant financial assistance program for the aerospace sector. In aerospace and defence, the focus is on technologies relating to 1) high-tech avionics and electronic systems; 2) engines and aircraft engine components; 3) materials, structures, components and aircraft systems; 4) software and simulators; 5) systems and components of the space industry, including communications technologies.

Linked to this program are the Aerospace and Defence Supplier Development Initiative (component of TPC) geared specifically to SMBs in the aerospace and defence sector and the Aerospace Collaborative Technology Development Program (component of TPC), designed to encourage research and development programs for Canadian aerospace and defence suppliers.

The air transportation team of Export Development Canada (EDC) offers financial solutions to Canadian aviation equipment suppliers, manufacturers of aircraft parts and related materials, service providers and supply chains in the aviation sector. EDC also assists this sector with a complete range of financial products and services, including buyer credit and insurance and performance instruments, bonds and online advice services.

Specialized Financing Firms — Another source of financing lies in the contributions of specialized financial backers who direct their efforts towards companies in the aerospace sector.

The Fonds de solidarité des travailleurs du Québec (FTQ) is a development capital corporation whose principal mission is to contribute to creating and maintaining employment in Quebec by investing in small and medium-sized businesses. It takes an active role in helping companies expand into international markets and accompanies foreign businesses wishing to establish in Quebec through its efficient Aérocapital funding program.

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The company Innovatech, which manages a 350-million-dollar venture capital fund, differs in that it offers exclusive financing for technological innovation at startup or technological transfer stage in the fields of information technology, health sciences, advanced technologies and telecommunications.

The Société générale de financement (SGF) provides development capital and invests in structuring projects in cooperation with private sector partners under normal profit conditions.

Government ServicesBecause of the financial and technological resources that it requires, the aerospace industry needs strong government support politically, economically and financially.

The Government of Canada — Industry Canada and the Canadian Commercial Corporation have developed a wide range of programs and services for aerospace industrialists.

Industry Canada’s Canadian Aerospace Collaborative Technology Development Initiative encourages research and development projects by Canadian suppliers (especially SMBs) in aerospace and defence to help them develop the technologies they need to maintain and reinforce their competitiveness worldwide.

The Technology Partnerships Canada (TPC) technology investment fund promotes and supports programs in research, development and innovation in the aerospace and defence sectors, among others. Specifically designed for the aerospace industry, the TPC Aerospace and Defence Supplier Development Initiative will be used essentially to support and increase the technological capacity of the aerospace and defence sectors and to encourage conversion programs whose aim is to reduce companies’ dependence on military contracts.

International Trade Canada offers several different services to help small and large Canadian enterprises expand and achieve success in overseas markets: Team Canada, the Canadian Trade Commissioner Service in Canada, the Canadian Trade Commissioner Service abroad, and the Export and Import Controls Bureau.

Government of Quebec — A team at the MDERR is dedicated exclusively to the aerospace and defence sector within the “Transportation Equipment” group. It organizes trade missions abroad, receives overseas sales teams, works to establish foreign aerospace companies in Quebec, advises industrialists and participates actively in the world’s largest air shows.

Investissement Québec serves as the gateway for foreign and domestic investors who are seeking to develop and prosper in Quebec. This organization works to attract businesses and advise them on an ideal location, and then it initiates the necessary contacts with local authorities, potential partners, venture capitalists, research and development networks, government employees and government public services experts.

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InfrastructureAerospace companies are always highly attractive to governments and local communities due to the quality jobs and fiscal benefits they generate. In the Greater Montreal Area, the sector can rely on infrastructures that facilitate the arrival of new businesses and the establishment of new production units. In Montreal’s South Shore district, already home to Pratt & Whitney Canada and Héroux-Devtek, Longueuil Economic Development (DEL) accelerates companies’ plans for establishment, expansion or innovation by helping them gain rapid access to sites, financing and skilled labour. It also facilitates their access to export markets and accelerates their international business development.

The Technoparc in Saint-Laurent is the largest industrial research and development park in Canada. It was designed and developed to stimulate the growth of leading edge technology in the borough of Saint-Laurent, particularly in the aerospace sector.

AssociationsQuebec’s aerospace industry has the support of three associations. Two of them represent the industry in its relations with government authorities and the public, provide a forum for meetings and exchange of information, and act as information marketing support centre, while the third deals exclusively with issues relating to the labour force.

The Aerospace Industries Association of Canada (AIAC) promotes Canadian aerospace industry goods and services in the global market. The Quebec Aerospace Association (AQA) does the same for Quebec’s companies. Both implement trade missions, ensure the presence of their members in various air shows (Le Bourget, Farnborough, Asian Aerospace, Dubai) and forge links with counterpart associations in other countries.

The AIAC acts in concert with various federal government ministries and agencies such as the Department of Foreign Affairs and International Trade, the Canadian Commercial Corporation, the Export Development Corporation, the Department of National Defence, the Canadian International Development Agency, and the Canadian embassies and consulates. The AQA, for its part, has ties with the Quebec government’s various economic departments and agencies.

The Centre d’adaptation de la main-d’œuvre aérospatiale au Québec (CAMAQ) motivates and supports aerospace industry partners in their efforts to adapt and develop the labour force, identifies their needs and plans for potential shortages of specialists, liaises with the educational milieu, helps develop, scrutinize and update study programs at secondary, college, university and post-university level and promotes the aerospace industry, its jobs and the scientific and technical training it requires.

The Bureau d’initiatives stratégiques (BIS), set up by industrials of the Quebec aerospace industry, has the mission of inciting subcontractors to better meet the needs of the contract originators and in so doing increase competitiveness in the sector. It also aims to develop and keep manufacturing subcontractor activities in Quebec. Its intervention team covers different areas of expertise: strategy, strategic information, engineering, manufacture, quality, management, finance, etc.

The MDERR has set up a working committee, the Comité Aérospatiale Québec, to try to find sustainable solutions for coordinating this key industrial cluster on the CMM territory. The committee, made up of business and organizational leaders, should make the results of its work public before the end of 2004.

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Assessment and Outlook

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While the commercial, 100-plus seat sector is likely to regain strength between now and the end of the decade, with production increasing from 503 to 728 aircraft between 2004 and 2008 and value rising from $30 to $50 billion, the regional aircraft sector will stagnate, falling from 324 to 301 units for the same period and from around $6.3 to $5.9 billion.

Strong growth expected in regional transport

Despite difficult market conditions in the regional transport sector, airlines appear to have the means at their disposal to buy new aircraft. The low-cost airline JetBlue has ordered 100 Embraer 190, while others like WestJet are reported to be considering purchasing large regional transport jets. In all likelihood, the sector will remain a duopoly dominated by Bombardier and Embraer.

The two new arrivals, still in development, the Chinese ARJ121 and the Russian Sukhoi Regional Jet, will at best serve their domestic markets, assisted in their development by General Electric and Boeing respectively. Even if these two models were to penetrate the international market, their development would be restricted by the lack of two vital elements – flexible financing and after-sales service.

The gradual tearing down of the “Scope clauses”, which currently restrict regional transport operations to aircraft of under 70 seats, will open the market to regional transport planes such as the Bombardier RJ700, RJ900 and Embraer 170, 175, 190 and 195, which can carry up to 118 passengers.

These developments make it necessary to reconsider the decision taken four years ago not to launch the BRJ-X, a 90- to 110-seater aircraft. Currently, the CRJ 50- to 90-seat family offers the benefits of having certain elements in common, a narrow fuselage with lower operating costs, and a common wing for the CRJ700, CRJ900 and CRJ705, a 75-seat version of the CRJ900.

The only major competitor in this sector is the Brazilian manufacturer Embraer, who assembled aircraft thirty years ago under license from Piper. The United States and France have managed to hold on to a very specific part of this market. Russia and China harbour great ambitions, although these will almost certainly not be realized.

Business aircraft: new models to guarantee growth

Following the boom of the 1990s, sales in the business aircraft sector have slowed considerably since 2001. In 2006, the market is expected to regain its 1997 position. Only the big players will weather the slowdown, as they have the means to launch new models even when sales are declining.

Between 1995 and 1999, some 15 business aircraft models came onto the market. The years ahead are unlikely to be as prolific, due to the ever increasing financial constraints faced by manufacturers.

In contrast, the market for very light corporate aircraft seems to be bubbling, despite numerous programs launched by new manufacturers that have not yet managed to make it through all the stages of development. These include the SJ30, the Eclipse, the VisonAire Vantage, the Century Jet, the Safire S-26, the Diamond D-Jet, the Aviation Technology Javelin, the Adams A700 and the Israel Aircraft Industries / Avocet ProJet. The only project that seems to be moving forward is the Mustang, produced by an established manufacturer, Cessna Aircraft.

In this market niche, Quebec faces established competition from the United States and France. Even Brazil has announced its intention to break into the market.

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In the civil helicopter market, the situation is difficult for North American manufacturers such as Bell Helicopter Textron Canada, which took a beating on the 206, 407 and 427 models. Eurocopter now has six models in its US$1 million to $3 million range and is concentrating its efforts on developing new products. AgustaWestland diversified its 109/119 range.

Engines: an increasingly wide range of products

Quebec’s involvement in engine manufacturing lies mainly in the commercial sector, even though some turbines are installed on military aircraft.

The turbofan engines of Pratt & Whitney Canada equip mostly small and medium-sized business aircraft, although the PW300 may be installed on regional transport planes. The development of ultra light business aircraft will confirm Pratt & Whitney Canada’s position in this market, currently only occupied by Williams International.

The commercial turboprop market is stagnant and will undoubtedly shrink with the decline in market demand for regional transport propeller planes such as the Dash8, ATR and Beech 1900D. The convertible BellAgusta BA609 will increase sales opportunities for Pratt & Whitney Canada’s PT6 engine.

In the helicopter sector, turbines made in Quebec will equip an increasing number of aircraft.

As regards technology, since the industry in Montreal focuses mainly on the civil market, it does not need to reach the highest levels of technology, except in the specific field of engines.

Projects underway in several sectors

The Global 5000, Challenger 300, CRJ-900, Bell 427IFR and PW308 made by Pratt & Whitney Canada, which have just started to be delivered or will be very soon, will take the industry to new heights. Other projects, still in planning or development stage, such as the Bombardier 100-seat regional transporter, the AB139 and the Bell Helicopter MAPL Project, and Pratt & Whitney Canada’s PW600 and PW800 will ensure the expansion of Quebec’s aerospace industry well beyond 2010.

The Canadian Forces’ Maritime Helicopter Project (MHP), whose goal is to replace the fleet of maritime patrol Sikorsky CH124 Sea King helicopters (now almost forty years old), will provide manufacturing and supply contracts for Quebec firms thanks to federal and provincial government initiatives, associations such as the AIAC and the AQA, and the industry itself. A $4 billion-plus contract was awarded on July 23, 2004 to the American firm Sikorsky, which put forward its S92 SuperHawk, dubbed Cyclone. The Canadian Forces preferred the Cyclone to the AgustaWestland EH101. Quebec companies such as L3 MAS Canada (formerly Bombardier Aerospace Defence Services), GE Aircraft Engines Canada and Simgraph have teamed with Sikorsky in the deal.

Commercial Transport — The development of the super-jumbo A380 made by the European consortium Airbus Industrie will have very little impact on Quebec’s aerospace industry, aside from the contract with Pratt & Whitney Canada to supply the auxiliary power unit (APU) and with CAE Électronique for simulation software. Since Canadian carriers are highly unlikely to buy such an aircraft, the European manufacturer will certainly not come looking for partners or suppliers in Quebec.

The launch of the Boeing 7E7, however, will offer major business opportunities to Quebec aerospace companies, which are long-standing suppliers of the Seattle-based manufacturer.

The Boeing 7E7, designed to replace the Boeing 757 and 767, will be a medium-capacity aircraft available in three versions, from medium to very long range. The Canadian federal government and the AIAC will be actively involved in helping Canadian and Quebec industries to conclude the maximum number of contracts under this program, which will span more than twenty years, with the construction of at least two thousand units following the commissioning of the first airplane planned for 2008.

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Military Aviation — In the defence sector, the development of the European four-engine turboprop military transport plane, the A400M, made by Airbus Military Aircraft — 225 of which will be ordered by seven European countries partnering the program — attracted the attention of Pratt & Whitney Canada, which put forward one of its engines to power the plane. Finally, it was a European engine, still in the design stage, that was chosen. Intent on breaking the USA’s lead in the field of military tactical transport, Airbus proposed its A400M as a replacement for the Canadian Forces’ Lockheed Martin C130 Hercules.

A huge military program led by the US offers extremely attractive opportunities to Quebec’s aerospace industry: the multi-role combat aircraft Lockheed Martin F35 “Joint Strike Fighter” will be made for the US Air Force, Navy and Marine Corps, as well as for the British Royal Navy. Chosen over the competing proposal by Boeing, the F35 will enter active service in the US forces towards the end of the decade. In the short term, this means the replacement of 3,000 F-16, F-18, A-10 and AV-8 belonging to the US and British forces, and in the medium term, an international market of at least 3,000 additional aircraft. Manufacturing and service supply contracts have already been awarded to firms in Quebec. The federal and provincial governments, the AIAC and AWA see these contracts as a guarantee of prosperity for Canada’s aerospace industry, and consequently for that of Quebec. Despite the recent contract to modernize its fleet of McDonnell Douglas F18 Hornets, which will be withdrawn from service by the year 2017 or thereabouts, the Canadian Forces will have to start envisaging the replacement of these aircraft.

A period of consolidation

The aerospace industry, as many other manufacturing industries, is experiencing a period of sweeping change due to the globalization of its activities and the consolidation of its companies.

At a time when Quebec’s aviation industry sales are rising, local content has not followed at the same pace, for an increasingly large share of Quebec’s aircraft and equipment are coming from abroad. Suppliers and subcontractors are finding themselves increasingly up against not only companies from countries with long-standing aeronautical traditions such as the United States, the United Kingdom, France, Germany, Italy and Japan, but also companies in emerging markets, such as Brazil, China, Taiwan, India and Eastern European countries; these countries not only have lower labour costs but they also benefit from government policies guaranteeing them financial assistance and local market protection.

Ensuring competitiveness

It is essential to ensure the competitiveness of Quebec’s – i.e. Montreal’s – aerospace industry. This can be done in the following ways:

• By creating an environment that encourages and stimulates competition; • By removing the barriers that prevent Quebec businesses from participating in civil or military

programs abroad; • By international industrial cooperation and the transfer of technology; • By adequately financing Canadian exports, and consequently those of Quebec and Montreal, to put them on an equal footing with their competitors faced with airlines eager to obtain financing

for the purchase of new aircraft; • By creating financing programs to guarantee companies the opportunity to continue to develop

innovative products; • By developing synergy between the capabilities of Quebec’s aerospace industry and the needs of

the Department of National Defence; • By helping SMBs to access the latest equipment and production methods in order for them to

meet the demands of the international market; • By creating a stimulating environment for research and development.

Federal export financing programs must be maintained, for not only do they cost nothing to taxpayers in the long term, but they also ensure that highly qualified and well paid jobs are created and maintained in Canada, especially in the Montreal region. Companies should be able to benefit from a type of TPC for military programs, as manufacturers currently have to incur the expenses and risks of this development alone.

Furthermore, Canadian companies’ access to international programs must be assured. As aerospace technology is often a direct result of military programs, industrialists must turn increasingly towards the defence sector.

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Interregional Links

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ks Elsewhere in QuebecThe integrators, equipment and systems suppliers, and most of Quebec’s aerospace industry’s strategic infrastructure are located on CMM territory. The subcontractors occupy sites in Montreal’s eastern district, in Saint-Laurent and in Laval; however, other subcontractors operate in Montérégie.

Specialized subcontracting in Montérégie

The Montérégie region is home to a significant number of SMBs offering specialized subcontracting services that require cutting edge technology, mainly in the field of engine manufacture. The region also benefits from the presence of contract originators such as Pratt & Whitney, General Electric and Héroux-Devtek and is recognized for its R&D in turboprops and landing gear.

The Canadian Space Agency and the Centre de technologie en aérospatiale are based in Saint-Hubert, and the Consortium for Research and Innovation in Aerospace, in Longueuil.

Market outlook

The components and subsystems designed in Montérégie go mainly to airplane and helicopter manufacturers based in the Montreal metropolitan region and the United States. The maintenance and repair of different components are also carried out in Montérégie. Under the Accord program, Montérégie intends to be a “determining partner” for Montreal in value-added manufacturing for the aeronautical industry.

The Accord program (Action concertée de coopération régionale de développement) was created jointly by the Société générale de financement (SGF) and the Ministry of Economic and Regional Development and Research (MDERR). The program will establish a regional production system that is competitive in both North American and world markets by identifying and developing niches of excellence in each region that will become those regions’ mark of distinction.

Regional infrastructure

The airports of Quebec and Trois-Rivières have existing infrastructure that could be attractive to companies wishing to set up business in those regions. Quebec airport is home to Nordtech Aerospace, a company specializing in aircraft maintenance, which could be of interest to other companies involved in the maintenance or repair of aircraft and aircraft components at one level or another. At Trois-Rivières airport, the takeover of OMF by Symphony could create a centre for aerospace industry in the Mauricie region.

Although the City of Quebec may develop its aircraft maintenance business further, it will remain the primary centre for aerospace outside the Greater Montreal Area, which will always be the indisputable leader of the aerospace industry in Quebec.

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Perceptions

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Relational Assets

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Rela

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ets A Major Transition

The “Aerospace” cluster for the Greater Montreal Area includes all the elements necessary for its development, whether it be manufacturers, government agencies, educational establishments, research institutes and centres, or financing bodies. The most important aspect of the innovation process is to ensure that all the links in the chain maintain solid connections with one another in order to ensure progress for the cluster as a whole.

Renewed Relations Between Contract Originators and Subcontractors

The traditional relationship between contract originators and subcontractors has undergone a major transition during the last few years, whereas affiliations between prime contractors and systems and equipment manufacturers, as well as subcontractors have changed from a relation of dependency to one of partnership.

In this context, contract originators are putting increasing demands on suppliers, who are required to change their status from simple executors to full partners. As such, they have to take part in research and development work, bear a part of the risk and share some of the investment costs, and meet the high satisfaction criteria of the prime contractors, who are constantly seeking to reduce manufacturing costs, speed up production and attain even higher standards of quality.

The subcontractors must therefore continually invest in equipment, training and information technology, in addition to seeking to constantly increase productivity. Some years ago, the role of the subcontractor was mainly restricted to developing products designed according to specifications provided by the contract originator. This situation resulted in the subcontractors becoming highly dependent on the contract originators.

Nowadays, however, some large contractors prefer their orders not to exceed more than 40% of the total business volume of their subcontractors. For certain subcontractors in Quebec, client diversification is becoming a problem due to lack of time and insufficient production capacity, and the fact that contract originators are increasingly concentrating on their core business while relying on their subcontractors to develop high-tech expertise in their respective fields.

The subcontractors must learn to accept this new type of relationship. They need to become involved in research and development and in sales representation and expand into world markets in order to attract new clients from outside the province.

In the past, relations between contract originators and subcontractors led the subcontractors to form the Quebec Aerospace Association (AQA) to defend their common interests. Bombardier’s plans for a family of 100-seat aircraft, the C Series, will necessitate dialogue and greater cooperation between the prime contractors and the subcontractors. It will therefore be necessary to develop the relationship further to ensure that it is based on collaboration and no longer on confrontation.

There are currently several networking opportunities open to the members of Montreal’s aerospace cluster: the annual general meeting and information sessions of the Aerospace Industries Association of Canada (AIAC), dinner meetings of the Quebec Aerospace Association (AQA), aerospace-related events organized by the MDERR, by Industry Canada and by the chambers of commerce. The various committees of the AIAC and AQA also offer discussion forums for members.

Forge closer links between the SMBs and the research sector

The creation of the CRIAQ in the field of R&D has enabled a constructive dialogue between industry, government agencies and the research sector. The large firms have come to understand the importance of training, innovation and technology, essential for their survival and expansion.

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For the smaller companies, innovation and technology are not such a high priority and for many managers they represent more of an expense than an investment, the benefits of which will only be reaped in the long term. Furthermore, due to a lack of skills and a limited number of engineers in their ranks, the smaller companies find R&D difficult to manage. The CRIAQ is thus attempting to establish ways for R&D to become part of the culture of these small businesses.

This approach must be adopted within each company, whatever its size.

Adjust training to better meet industry’s needs

To meet training needs, there are the École des métiers de l’aérospatiale de (EMAM) at the secondary level and the École nationale d’aérotechnique (ENA) at the technical and college training level. Five universities, including four in Montreal – McGill, Concordia, the Université de Montréal, and the École de technologie supérieure (ÉTS) –, have set up a joint master’s program in aviation technology.

These institutions train graduates, whose professional skills are recognized and highly appreciated by employers. The universities appear to be meeting industry’s needs perfectly, and there is practically no more hiring of engineers from outside the country.

The problem seems to lie in technical training. The number of new student technicians has dropped significantly following media reports on the upheavals in the aerospace industry following the events of September 11, 2001.

The Centre d’adaptation de la main-d’œuvre aérospatiale au Québec (CAMAQ), which unites representatives from industry and educational institutions, has managed to build solid links between industry and education. In fact, it is recommended that educational institutions adjust their training to industry needs to avoid staff shortages in a few years’ time.

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Strategic Elements

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A Common Strategic PlanTo solve problems and remedy weaknesses affecting the aerospace industry in the Greater Montreal Area, a unique strategic plan must be implemented to develop the cluster, along with specific steps to improve performance in this sector.

Solutions have been proposed by several players, separately, within their respective fields.

Adopt a global vision for the aerospace industry

For the moment, no common global vision for the aerospace industry in Quebec has been formulated and no single organization stands out as advocate for the industry. It is interesting to note, nonetheless, that in setting forth their objectives the AIAC and l’AQA are attempting to give the industry a common vision. After putting forward some strategic avenues, the MDERR set up an steering committee made up of company directors and managers of organizations in the sector. This working group, whose logistics are assured by the MDERR, is known as the Comité Aérospatiale Québec. It has met four times as of this writing.

During this time, the President and CEO of Bombardier, Paul Tellier, suggested proposals to guarantee the future of the Canadian aerospace industry. Before the Board of Trade of Metropolitan Montreal, he launched an appeal for the creation of new R&D funding partnerships, with the sharing of risks and profits between the public and private sectors, along the lines of the Technology Partnerships Canada program. He also proposed the setting up of consortiums consisting of local and foreign prime contractors, suppliers and governments for the development of products, derivatives and subsystems. Paul Tellier asked the Canadian federal government and provincial governments to maintain their level of investment in production facilities and to innovate when it comes to creating incentives, adding that these initiatives should be accompanied by a significant component to help finance sales.

Just as the Government of Canada has stated, it is important that Quebec establish a provincial policy for the aerospace industry. Some organizations seem to be moving on this issue and are calling for such a policy. Among them are the Quebec Aerospace Association (AQA), the Fédération des travailleurs du Québec (FTQ) and the Board of Trade of Metropolitan Montreal.

The federal Minister for International Trade, James Peterson, and Michel Audet, Quebec Minister of economic and regional development have held meetings with industry players. Paul Tellier’s proposals could be a starting point for a strategy beneficial to Quebec’s aerospace industry.

It is also worth pointing out that the needs of the industry are not uniform and monolithic. The demands of Bombardier or Pratt & Whitney Canada do not always correspond to those of an integrator or a small subcontractor.

To be effective, a common strategy has to be accepted by all the players that make up the aerospace cluster in Quebec, and by extension Greater Montreal. A number of countries have devised and implemented development strategies for their aerospace industries; Europe appears to be the most striking example, but other countries such as Japan, South Korea and Brazil are not to be outdone either.

Consequently, maintaining and developing the aviation industry in Montreal and in Quebec can only be achieved through targeted and concerted efforts by all the parties involved, both public and private, and the elaboration of one common vision, without which this industry runs the risk of being overtaken by other countries.

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Obtain continued government support

Despite its successes, Canada’s (and consequently Montreal’s) aviation industry faces major challenges with respect to government funding. It is up against competitors who benefit from huge state financing, notably in R&D and in export and investment. The United States Department of Defence, for instance, invests $45 billion US in R&D, some $6.5 billion of which goes directly to Boeing, Raytheon and United Technologies. European countries invest large sums in European aircraft manufacturers through research programs, and directly and indirectly finance the development and launch of new aircraft in the Airbus range. Brazil finances the sales of Embraer through aircraft funding programs.

As for civil aircraft construction, the situation is very similar for R&D in the commercial field, where Canadian industry as a whole shared $165 million CAN in 2001 in contributions from the federal government.

Additionally, as Canadian industry does not benefit from large government orders and its small domestic market is primarily focussed on civil aircraft, which means it does not benefit from military R&D funding, it is essential to adopt a national funding policy. This situation is exacerbated in a context where the airlines are increasingly putting the burden of financing on the manufacturers. It would be highly desirable to see the implementation or enrichment of R&D or aircraft sales financing programs by federal and provincial governments.

Attract foreign integrators

For some years now, large prime contractors like Bombardier have been seeking to reduce the number of their suppliers and are now looking for “integrators” who are capable of delivering complete subsystems and who will share the financial risks.

The ultimate danger is that these subsystems will end up being assembled abroad, due to a lack of integrators in Quebec. But it is becoming increasingly difficult for SMBs to transact directly with Bombardier, and they are turning to Bombardier’s main suppliers such as Héroux-Devtek.

In the context of the development of Bombardier’s new 100-seat aircraft, the C Series, it will be necessary to establish local integrators of the size of Héroux-Devtek, currently the only one in Quebec, or attract others from overseas, such as Mitsubishi, which currently supplies the wings for Bombardier’s Global Express from its facilities in Japan.

The arrival of foreign integrators should ideally be accompanied by a strategic alliance of Quebec companies, to guarantee subcontracting activities in Quebec and the transfer of technology and know-how.

Open Montreal’s industry up to the rest of the world

Clearly, the aerospace industry in Canada and Quebec is turned resolutely towards international markets in an attempt to find opportunities for its products with Bombardier, Pratt & Whitney Canada, Bell Helicopter Textron Canada, CAE, CMC Electronics, Héroux-Devtek and a certain number of smaller companies whose products can be found around the world.

Nonetheless, in the context of increased business globalization, where contract originators are now weaving their webs of suppliers throughout the world with a view to getting easier access to overseas market opportunities, it is indispensable for managers of small and medium-sized businesses in the Quebec aerospace sector to increase their strengthen their international presence.

This goal will only be achieved by their participation in fairs and exhibitions and in trade missions overseas, by receiving foreign delegations and taking part in seminars on international affairs, and by expanding their levels of innovation and technology.

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Establish overseas presence

Certain SMBs in Quebec’s aerospace sector could consider setting up offices abroad with a view to fostering closer links with large contractors or integrators, but up to now very few have taken this step. This approach can be made by setting up facilities, buying out a local company, or undertaking a joint venture. It would enable subcontractors from Quebec to establish closer relationships with large contract originators outside Quebec and to better position themselves as potential suppliers.

Promote foreign facilities in Quebec

Canadian-owned companies generate around 45% of sales in Canada. US-owned companies alone account for 42% of the industry’s total business volume.

In Quebec, Pratt & Whitney Canada, Bell Helicopter Textron, Honeywell, and Howmet are US-owned, Rolls-Royce Canada is British-owned, and Thales Avionics, Messier-Dowty and Turbomeca are French-owned, not to mention several other smaller companies that have come under foreign ownership, such as NMF, Tubetronics, Airborne, Arell, Performance LT, and Atelier d’usinage Aero.

Foreign presence in the Quebec aerospace industry is becoming an increasingly significant reality as the years go by. Bell Helicopter Textron, Messier-Dowty and Turbomeca, among others, have added their presence to corporations such as Pratt & Whitney Canada, Rolls-Royce Canada and Bendix Avelex (now Honeywell), all firmly established for many years. It is also worth noting that in 2004 the company Areo-Mecachrome set up a new $21-million factory in Montréal-Nord, employing 110 people. Areo-Mecachrome is a subsidiary of the French group Mécachrome International, founded in France in 1937 and present in two other sectors of activity: competition cars (since 1971) and series cars (since 1990).

Foreign companies setting up facilities in Quebec or buying out Quebec-based companies are often a means of introducing new specializations and innovative technologies, and injecting capital. In the near future, especially in light of the development of Bombardier’s C Series of 100-seat family of airliners, it would be desirable to attract integrators to the Greater Montreal Area who would most likely become risk-sharing partners with the Montreal-based manufacturer, and who could be supplied by local subcontractors.

Strengthen the subcontracting offer

The aerospace industry boasts one of the world’s best subcontracting structures. Every degree of subcontracting is present in this strict hierarchy, from the prime contractors and equipment manufacturers to the subcontractors. In Quebec, the main worry at the moment is the restricted number of integrators and the wide fragmentation of the industrial base, comprised mainly of SMBs.

This state of affairs means that large contract originators must turn increasingly towards foreign equipment manufacturers. The supply chain is therefore broken in Quebec and the subcontractors have to deal more and more with foreign integrators. This problem is made even more complex by the fact that the base of the subcontracting sector in Quebec’s aerospace industry is made up of too great a number of small companies with limited and unequal levels of expertise. Not enough companies are situated at intermediate level, with business volume varying between $20 million and $50 million. Quebec-based subcontractors therefore need to expand to achieve business volume between $50 million and $100 million in order to interest the contract originators, who want to do business with an increasingly restricted number of subcontractors who can deliver turnkey subsystems.

Such fragmentation causes business activities to move outside Quebec, as it is often extremely difficult for SMBs to follow the large contractors’ expansion rates in addition to meeting their increasingly complex requirements and incurring the resulting technical, financial and commercial risks. It is a question of survival and prosperity, both for the contract originators and for the subcontractors.

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It is becoming increasingly apparent that the large corporations will probably not be able to survive without a well established network of subcontractors, who are the powerful determining motors for the development of robust industries that need to attract and retain the contract originators. The proximity of quality subcontractors not only saves transportation costs, but also offers significant benefits with respect to innovation, technology transfer and time.

Conversely, if subcontracting firms conclude projects with contract originators who have substantial resources, the subcontractors will then have the necessary power to become world class companies themselves. The development of a real synergy between contract originators and local subcontractors thus encourages a favourable environment for the growth of the industry as a whole.

Encourage SMBs to do research

In an industry that relies on cutting edge technology through innovation, the Greater Montreal Area needs to equip itself with top class R&D capabilities.

Public organizations such as the Institute for Aerospace Research and the Aerospace Manufacturing Technology Centre (AMTC) of the NRC, the Consortium de recherche et d’innovation en aérospatiale au Québec (CRIAQ) and the Centre technologique en aérospatiale affiliated with the Collège Édouard-Montpetit, are dedicated to technology application and were created to foster and advocate research and to transfer the benefits to industry.

Through lack of information and internal resources, however, very few companies have been able to benefit from these services until now. Unfortunately, SMBs either do not seem to understand the importance of R&D, or they do not have the necessary resources to branch out in this direction. They should be made aware of the services offered by the above public organizations, which have the know-how and resources to help them take on research activities.

Accentuate the research component of R&D

Montreal’s innovation capabilities have consolidated the region’s leadership in the aerospace sector. Pratt & Whitney has certified 40 new engines over the last eight years and 20 others are being developed. Bombardier has certified an average of one aircraft per year since 1992. CAE ranks among the 20 Canadian firms that invest the most in R&D, around 10% of its earnings.

Although some Montreal companies such as Pratt & Whitney Canada and CAE dedicate significant resources to research, however, most confine their activities primarily to development.

Bombardier invests a large amount of money in developing and testing new aircraft, but relatively little in research, which it leaves to its international network of subcontractors. In the Montreal aerospace industry, the “Development” component seems always to take priority over “Research.”

To rectify this situation, it would be beneficial to create national “technology demonstrator” programs, such as those in the United States, which bring together businesses and research organizations across the country. It is also essential that researchers’ innovations be transferred as quickly as possible to companies, in order to produce the maximum benefit.

Increase management capabilities within companies

The quality of management is of utmost importance in a globalization context where subcontractors are placed in direct competition with their foreign counterparts. The prime contractors tend to limit their requests to a restricted number of larger subcontractors, who are able to provide significant added value, or pre-assembled or complex parts. This situation requires new management methods in light of the subcontractors’ need to invest increasingly in internal procedures, new technologies, innovation and market development.

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The majority of subcontractors are too busy finding solutions to immediate problems to concentrate on long-term vision, international business development, client needs, innovative capabilities, high-tech production methods or new partnerships. The lack of concise information and business intelligence tailored to their needs does not make the development of a global and international vision any easier.

Facilitate access to property for SMB directors

For many Quebec aerospace contractors, who are planning to sell their businesses in the near future, the future is a dilemma. Often founded in the 1970s, these businesses interest larger Quebec firms or foreign companies seeking to form closer ties with Quebec or even US prime contractors.

For this reason, certain Quebec companies holding strategic positions in the industry become the property of foreign interests. Even though the injection of fresh capital can contribute to the technological development needed to support the growth of local industry, some companies bought by foreign interests become just gateways to the Quebec market, the orders being placed in Quebec but the work often being carried out outside the province.

Reduce the foreign content of finished products

The aviation industry is one of the most integral sectors of the economy. Montreal’s major manufacturers must rely on foreign sources for the key input they need. In the early 1990s, approximately 38% of the materials and services bought by the Canadian aviation industry were imported; today, imports exceed local supply.

Make the public aware of the importance of local aerospace industry

An overview of information available on the Quebec aerospace industry, and consequently that of Montreal, reveals a serious lack of reliable and recent economic information.

There are very few statistics available enabling detailed study of aerospace industry performance in the province. Additionally, there are insufficient indicators or mechanisms in place to measure this performance.

Insufficient diffusion of strategic information within the aviation cluster is also a serious problem, for it is this information which contributes to developing long-term vision and giving efficient direction to development activities, whether it be at company or regional level.

Also worth pointing out are the lack of public awareness and lack of interest on the part of the local and international press with regard to Montreal’s aerospace industry. If they are to support their aerospace industry, the Montreal and Quebec public need to understand it better and appreciate the positive impact it has on the economy, jobs and technological development. Intelligent media coverage would make the industry better known to the public and decision-makers, on a local and world scale.

Change young people’s perceptions about employment opportunities

The presence of available, well-trained labour in Greater Montreal’s aerospace industry is essential to its development. Therefore, the quality and quantity of institutional training must always respond adequately to the industry’s needs. Furthermore, educational institutions should be aware of company training programs, so they can adapt their programs or teaching methods to industry practices.

The educational sector should incite and back discussions with partners from the aerospace industry in its efforts to take on and train skilled labour, and to plan for specialized staff needs and staff shortages in the field. It will need to liaise with training organizations and take part in elaborating, examining and updating study programs at the secondary, college, university and post-university levels.

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The aerospace industry, its jobs, and related scientific and technical training should be promoted among young people so as to guarantee a continuous flow of new students towards schools teaching aerospace-related programs.

Since the events of September 11, 2001, trade schools have seen a slight drop in registrations, no doubt due to media reports of the difficulties faced by the air transport and manufacturing sector. Often ill-informed, young people are staying away from trade and technical aerospace schools in the belief that this industry cannot offer them interesting or well-paid career opportunities.

An information campaign and presentations made on tours of secondary schools will restore the facts in the minds of career advisers, students and their parents.

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Avenues for Growth

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th Remaining a Key PlayerBriefs and analyses drawn up by the AQA, the CAMAQ, the CRIAQ, the BIS and government organizations, and comments made by company directors, heads of research centres and teaching institutions enable the evaluation of possible avenues for growth for the Greater Montreal aerospace industry.

In a now global industry, impacted by the arrival of new competitors and where factors of quality, cost and technical innovation are inescapable realities, nothing can be left to chance any more. The aerospace cluster of Greater Montreal must therefore choose the right avenues for growth if it is to maintain its rank among the world’s largest aerospace players and conquer new markets.

It is useful to underline at least two external factors that may have an influence on the aerospace industry in Montreal, which are out of the control of its stakeholders.

First, there is the barrier of pilots’ collective agreements in the United States. The pilots’ unions of the major airlines in the US are using “Scope clauses” to prevent the arrival of regional aircraft of more than 70 seats, since the crews of these types of aircraft are paid less than other crews.

Second, the congestion of European airspace and the overloading of its facilities limit the growth of the regional market. European air traffic authorities have already attempted to impose tariffs that would make regional aircraft uncompetitive on many routes.

Build Bombardier’s 100-seat aircraft in Montreal

It is essential that the 100-seat Bombardier C Series be developed and manufactured in the Montreal region if the aerospace industry of this region is to maintain its position as a key player. The launch of this new range will enable Bombardier to penetrate the market for 100- to 135-seat airliners, a market currently occupied by Airbus Industrie’s A318 and A319 and Boeing’s 717-200 and 737-600 ranges

This aircraft, which will call on technology never before used by Bombardier, such as fuselage parts made of composite and electric flight commands, should decrease operating costs by 15% over those of competitors and by 20% over the planes it will be replacing – the Boeing 737 Classic, the Douglas DC9, the McDonnell Douglas MD80 and the Fokker 100. Bombardier estimates that the market for aircraft of 100 to 150 seats will be equal to the sale of 6,000 planes, for a value of US$250 billion over the next twenty years.

The aircraft’s development and construction in the Montreal region should lead to the creation of Quebec integrators and the arrival of others from abroad, who will bring new expertise with them. This new program will bring about the development and application of new technologies in addition to the creation of around 2,500 jobs at Bombardier itself, according to the manufacturer’s own figures, for assembling the aircraft. The economic benefits will depend on Greater Montreal’s industry to meet Bombardier’s needs in services, subsystems, equipment and parts.

After having put on hold its first project for a 100-seat aircraft, the BRJ-X, four years ago, Bombardier has since last year revived the idea of producing such an aircraft type. More precise details are available, giving a better idea of the look and characteristics of this aircraft family, which will be available in two versions: one with 110 to 115 seats and another, longer version with a capacity of 130 to 135 passengers. Both will be available as short-range (1,800 NM) and long-range transcontinental (3,200 NM) versions.

The announcement of the official launch of the C Series and the site of its construction should be made during the first quarter of 2005.

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Design and develop new products

The innovation and continuous introduction of new products is one of the driving forces behind the aerospace industry. Over the years, Quebec’s aerospace industry has been able to offer a continuous flow of new, often avant-garde products. Bombardier, effectively the pioneer in regional jet transportation, launches new models or derivatives almost every year. Pratt & Whitney Canada has had the honour of designing and manufacturing the most popular turboprop engine in history, the PT6, and has built up, over time, a complete range of small- and medium-power engines.

This aptitude for innovation is not restricted to the major players. Many SMBs are recognized for their project innovation, especially in software (Engenuity, Ad Opt, Adacell Canada). This seems to be a growing trend, illustrated by the development of Pratt & Whitney Canada’s PW300 and PW600 turbines and CAE’s visual Tropos system.

The upcoming launch of Bombardier’s Global 5000 business aircraft, Bell Helicopter Textron Canada’s development of the light turbine helicopter family resulting from the Maple program, and the imminent launch of the C Series 100-seat regional aircraft by Bombardier will all contribute to preserving the aerospace industry in Quebec as one of the most dynamic in the sector.

The aerospace industry, both in Montreal and across Quebec and Canada, is nonetheless suffering from a serious shortage of integrators, a new element in prime constructors’ aircraft production methods, and from too large a number of SMBs.

Turning towards the military aviation sector

Montreal’s aerospace industry, unlike that of the United States or certain European countries, cannot rely on domestic military orders. Its businesses must nevertheless turn towards US and international military programs, which generate new technologies.

After a ten-year wait, the cancellation of a contract in 1993 by the newly elected government of Jean Chrétien and various changes made to the specifications, the Canadian Forces’ Maritime Helicopter Program (MHP) contract to replace the Sikorsky CH124 was finally awarded in July 2004 to the Sikorsky company for the H92 SuperHawk, ten years after the cancelled purchase of the Cormoran.

Another contract pertaining to the purchase of light transportation aircraft, pitting the European EADS CN235 against the US-Italian Lockheed Martin Alenia C27J Spartan, is expected to be awarded before the end of the year.

The Canadian Forces must now start to consider modernizing or replacing its ageing fleet of some forty tactical transport planes, the Lockheed Martin C130E and C130H Hercules. Lockheed Martin is proposing its most recent version of the Hercules, the C130J, and Airbus Military Aircraft is putting forward its four-engine turboprop currently under development, the A400M.

Faced with the inability of the Canadian Forces to move heavy weapons systems over long distances, the Department of National Defence seems to be interested in buying a few strategic transport aircraft. Boeing offers its heavy four-engine C17 Globemaster III, and Airbus Military Aircraft, its A400M.

Purchased in the early 1980s, the Canadian Forces’ McDonnell Douglas F18 Hornet fighters, which are being modernized, may not now be replaced by the Lockheed Martin F35 Joint Strike Fighter (JSF) until around 2018.

Quebec industry must, however, count on the arrival of these fighters, whose entry into the US Air Force is planned for the end of the decade. Over 3,000 of these aircraft should be bought by different sections/corps of the United States Army and 3,000 by overseas clients. Canada, a third-level partner in this vast program, is likely to acquire around 80 aircraft somewhere in the region of 2015-2020.

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Companies in the Montreal region, which use cutting-edge technology and avant-garde manufacturing methods, would benefit greatly from involvement in this program. The American “National Missile Defense” program, commonly called the “Space Shield,” that Canada is invited to become a partner to, could become a source of contracts for research, manufacture and technological transfer for Quebec aerospace industries.

It would enable them to gain access to or develop leading-edge technologies which would open the doors to major foreign or international military programs, which have been benefiting from ever increasing levels of spending since the events of September 11, 2001.

A Much-Needed Common VisionAfter years of sustained growth, raising it among the world’s four largest aerospace centres, Montreal’s aerospace industry will have to meet certain challenges if it is to face an increasingly complex and crowded market.

If it is to promote one common vision of the aerospace industry, Quebec needs to set up and recognize a single, strong advocate to speak on its behalf, a goal that the Comité Aérospatiale Québec is trying to accomplish. Discussions and meetings should lead to the elaboration of a common vision, which would be powerfully and appropriately defended by the organization, made up of all the sector’s stakeholders, in its relations with government bodies and the general public.

Without the rapid and well-informed development of a veritable long-term vision in the aerospace sector and the establishment of a single leader speaking on its behalf, the Greater Montreal Area runs the risk of losing its own industry, one of the jewels of its economy, an industry that generates high quality jobs and wealth and that contributes to an economy focused on knowledge, awareness and winning world markets.

Based on a model such as that of the Aerospace Industries Association of America (AIA) in Washington or the Groupement des industries françaises aéronautiques et spatiales (GIFAS) in Paris, a Quebec entity should be in a position to represent the whole industry, to inform and to offer training and services to its members, to encourage the development of the industry and cooperation between its members, to promote itself in Canada and in the rest of the world, to defend its cause when dealing with government bodies, to interact with training and research organizations, to lead economic research and to establish communication channels with the general public and local and international media.

In Quebec, the only association that brings together a certain number of aerospace industry members is the AQA, which represents essentially just the SMBs for the time being, but which aims, under the leadership drive of its new president, to unite all industry players, regardless of size, with a view to improving communication and cooperation among contract originators, suppliers and subcontractors. In concert with the federal Aerospace Industries Association of Canada (AIAC), the Quebec Aerospace Association appears, at first sight, to be best placed to speak on behalf of the whole industry in Quebec and therefore that of Montreal. But no cards have yet been played.

One thing is clear: that the organization or a federation of organizations chosen will need to unite not only the prime contractors but also the integrators, equipment manufacturers and the subcontractors involved in the aerospace sector in Quebec. As well as representing the industry when dealing with government bodies, the organization concerned will be responsible for generating synergies among its members, promoting the industry inside and outside the province to governments, industries and foreign companies, collecting information on the industry, leading economic research and ensuring the industry’s visibility vis-à-vis the public and local and international media.

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Appendix

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Appe

ndix Sources

Studies and AnalysesAérospatiale. Profil d’une industrie. [Aerospace: Profile of an Industry] Investissements Québec. 2003.Aérospatiale. Montréal métro 2003. Profil stratégique. [Aerospace: Metropolitan Montréal. 2003 Strategic Profile] Montréal International. 2003.L’industrie aéronautique québécoise. Profil industriel. [The Aviation Industry in Quebec. Industrial Profile] MDERR. April 2003.L’aérospatiale au Québec. Une concentration exceptionnelle de leaders mondiaux. [Aerospace in Quebec. An Extraordinary Concentration of World Leaders] MDERR. 2001.AIA Aerospace Facts and Figures 2003-2004. Aerospace Industries Association. Washington, 2004.AIAC Annual Report 2004. Aerospace Industries Association of Canada. Ottawa, 2004.AIAC Guide 2004. Aerospace Industries Association of Canada. Ottawa, 2004.Source Book 2004. Aviation Week & Space Technology. McGraw-Hill, New York, 2004.The European Aerospace Industry : Facts and Figures 2004. AECMA. European Association of Aerospace Industries. Brussels, 2004.

Internet SitesAerospace Industries Association of Canada (AIAC). www.aiac.ca Quebec Aerospace Association (AQA). www.aqa.ca Centre d’adaptation de la main-d’œuvre aérospatiale du Québec (CAMAQ). www.camaq.org Industry Canada. Aerospace and Defence. www.ic.gc.ca Investissement Québec. www.invest-quebec.com Aerospace sector (MDERR). www.mic.gouv.qc.ca/aerospatiale/fr/secteur.htm Technical Support from the Ministries InvolvedMartin Landry, Advisor, Industrial File Development Ministère du Développement économique et régional et de la Recherche (MDERR)Claude Mercier, Advisor, Transport Equipment, Ministère du Développementéconomique et régional et de la Recherche (MDERR)

Technical Support from the Ministries InvolvedMartin Landry, Advisor, Industrial File Development, Ministère du Développement économique et régional et de la Recherche (MDERR)Claude Mercier, Advisor, Transport Equipment, Ministère du Développementéconomique et régional et de la Recherche (MDERR)

Individuals Consulted

Sue Dabrowski, General Manager, Quebec Aerospace Association (AQA)Pierre Dicaire, Business Development Officer, Institute for Aerospace Research (NRC)Gilles Labbé, President and Chief Executive Officer, Héroux DevtekHany Moustapha, Pratt & Whitney Canada, Director, TechnologySerge Rioux, Interim Director, École nationale d’aérotechnique (ENA)Guylaine Saint-Onge, President and General Manager, Bureau d’initiatives stratégiques (BIS)Serge Tremblay, General Manager, Centre d’adaptation de la main-d’oeuvre aérospatiale (CAMAQ)

Aerospace •50

Appe

ndix Credits

Editorial Director

Research and Copywriting

Research Assistants

Language Editing

Graphic Design

Michel Lefèvre

Philippe Cauchi

Jean-Philippe Meloche Charles-Albert Ramsay Julie Ranger Frédéric Simmonot Dominique Chichera

Daniel Ringuet

Metropolitan Cluster Technical Committee

Michel-Marie Bellemare Economist – Regional Policy,

Ministère du Développement économique et régional et de la Recherche

Daniel-Joseph Chapdelaine Advisor – City Planning and Institutional Relations,

Ministère des Affaires municipales, du Sport et du Loisir

Yves Charette Coordinator – Economic Development,

Communauté métropolitaine de Montréal

André Gagnon Advisor – Industrial File Development,

Ministère du Développement économique et régional et de la Recherche

Michel Lefèvre Advisor – Economic Development,

Communauté métropolitaine de Montréal

Christine Phaneuf Advisor – Local and Regional Development,


Ramata Sanogo Economist – City Planning and Institutional Relations,


Francine Rivard Director – Regional Development Coordination,

Société générale de financement du Québec

Aerospace Cluster - Bienvenue sur le site de la Communaut©

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