Belfast's Misplaced Anxiety
Today the Irish Times published a story talking about Bombardier workers being ‘stunned and shocked’ at the news that Bombardier has put up the Shorts plant for sale. I hope these same people also got to see the news from Reuters this morning. And, crucially, the news about China.
The sky is not falling in Belfast.
The global aerospace supply chain is tighter than it has ever been. Record orders for 737 and A320 aircraft ensure that the supply chain has this tension. Even with the MAX grounded, that tension has not let up.
The Shorts plant has some great technologies, and the supply chain is attracted to any technologies. Moreover, the Shorts plant is crucial to the future of the Airbus A220. Airbus is trying to ramp up A220 production at Mirabel and building another A220 FAL in Mobile. These two factories will need lots of Belfast-made wings. The Shorts plant also supplies Airbus with other parts.
Which leads to considering that Airbus or its affiliate, Stelia Aerospace, are the most likely buyers of the Shorts plant. Bombardier will entertain bids from anyone. But for Airbus, seeing the plant go to anyone outside its orbit adds to its supply chain risk. Remember the reaction when Boeing bought KLX? Airbus now has to fear the Chinese and Boeing. And if an investment firm stepped in with an attractive offer, that would also not help Airbus. I see Airbus as the natural buyer, and probably in hurry to do a deal.
Bombardier rescinded the layoffs at Shorts. The new owners may want to ramp up production and therefore probably keep the plant staffed to do this.
In summary, Shorts workers’ anxiety is probably misplaced. Their plant is a highly attractive facility. Especially now with the supply chain so tight. Confirming this is the interest from US, China and other companies. Finally, workers at the Shorts plant should be relieved because Bombardier is adjusting its business. Any new buyer of their workplace will focus on getting the production ramped up and optimizing output to supply the record backlog.