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Bombardier in talks to sell last remaining commercial airliner division to Mitsubishi
Quebec-based aircraft company Bombardier is getting ready to divest itself of its final commercial airline division and concentrate exclusively on business jets.
The company is in talks to sell off its CRJ regional jet division to Mitsubishi Heavy Industries.
Mitsubishi confirmed that it is in advanced negotiations to purchase the CRJ, and on Wednesday Bombardier confirmed that talks were underway.
"Before any agreement is reached, a thorough review and analysis is required, as well as the potential approval of Bombardier's Board of Directors," said the statement.
"There can be no guarantee that such discussions will ultimately lead to an agreement."
It's possible a deal could be completed within the next two weeks and be announced at the Paris Air Show on June 17.
Gordon Reid, president and CEO of Goodreid Investment Counsel, said Bombardier had been protected by government handouts but was still losing money.
"It's been protected by what we all know is some nationalistic feelings, politically, culturally, economically in Quebec, with a mind to keeping jobs in that province," said Reid.
"Certainly I think the Quebec government will have something to say about it, but it's a 180 here in terms of direction."
Bombardier acquired the CRJ division in 1986 when it purchased Canadair, then proceeded to purchase other manufacturers in the UK and U.S. and become one of the largest airliner companies in the world, competing with Boeing, Airbus, and Embraer.
Thousands of layoffs amid restructuring
Bombardier has been taking steps to get out of commercial aviation and focus on business jets which are purchased by extremely wealthy individuals, large corporations, and aircraft management companies.
Bombardier would also retain its train division, where growth is slow.
"You just have to turn on news all around Canada, including Toronto as a customer, to hear complaints month after month, year after year," said Reid.
Last year, following a trade dispute where it was singled out by U.S. officials, Bombardier transferred the majority of its shares in the CSeries division to Airbus, which renamed it the A220.
The company then announced a plan to lay off more than 5,000 workers.
In December Longview Aviation snapped up the Q400 turboprop division and the entire Dash 8 program for US$300 million.
Over the past year the value of Bombardier shares has dropped 59.42 percent.
With a file from BNN