Recently Bombardier announced it is selling its regional jet business to Mitsubishi Heavy Industries in Japan for $550 million.
It sounds like a good deal for the owners but Canadian taxpayers should be asking a few questions.
You may remember that two years ago Canadian taxpayers chipped in $372.5 million to Bombardier by way of an interest-free loan over four years.
Canadian Taxpayers Federation (CTF) issued a press release pointing out the Beaudoin-Bombardier family, which holds a controlling stake in the company, has a net worth of $2.8 billion. Bombardier accepted the first taxpayer subsidy in 1966 and since then has received more than $4 billion from taxpayers.
Federal governments have said in the past that taxpayer funds help to preserve the industry and, of course, jobs.
It feels as though taxpayers are forced to step up to the plate instead of the management at Bombardier.
In March 2017 it emerged the company’s chairman of the board, Pierre Beaudoin, received US$5.25 million in compensation in 2016, representing an increase of US$3.85 million from the year before. The CEO, Alain Bellemare, received US$9.5 million in 2016, an increase of US$3.1 million over the previous year. The chief financial officer received more than US$4 million in compensation.
The extravagant increases were apparently a reward for achieving profit and cash-flow targets in the midst of an agenda to pull the company out of its doldrums. That, by the way, included getting rid of 14,500 jobs around the world by the end of 2018. It is rather ironic to think that less luxurious benefit schemes for the top brass could have kept some of those people employed.
“History will record that all the ‘investment’ made by taxpayers to develop money-losing planes for our ‘national champion’ only resulted in those places ending up in the hands of a foreign company anyway — and while the company gets to keep the profits, taxpayers are left holding the bag,” said Aaron Wudrick, federal director of the CTF.
Increasingly as a society we have become blasé about reports such as this and that is not a good thing. Slash jobs, get taxpayers’ money interest-free, sell off part of the business and make a profit and reward the company brass with huge bonuses and increase their remuneration.
It looks as though the management are rewarded financially for having got government to prop them up with taxpayers’ money — and it looks as though we all take that lying down.
If you own a company and you are rewarded directly for the successfully running of the organization, without taxpayers’ money, then it could be argued you deserve the financial applause. That is not the case here.
There is something terribly wrong with this whole picture and it does not feel as though the federal government is spending taxpayers’ dollars wisely.
An editorial from the Medicine Hat News