Bombardier: Spirit Aerosystems may renegotiate government loan
- Published
The chief executive of Bombardier's new owner has suggested it may try and renegotiate a £113m government loan for the development of a wing factory
The buyer of Bombardier's Northern Ireland operations has suggested it may try to renegotiate a UK government loan made to the company.
Spirit Aerosystems agreed on Thursday to buy the Bombardier plant.
In 2008 Bombardier received a £113m loan for the development of a new wing factory.
Spirit's chief executive said there may be an opportunity to revisit the terms of the loan and make repayments more efficient.
The loan was for the building of the wing factory for the CSeries passenger plane.
The CSeries project was later sold to Airbus and the plane was renamed the A220.
A loan repayment is made every time an A220 is delivered to a customer.
'There may be opportunities'
Speaking to industry analysts Tom Gentile said: "Once we take ownership, we'll work with the UK government to figure out a way to mitigate those and make them the most efficient.
"There may be some opportunities for us to front load that or negotiate different things based on what we're going to do with the assets in Belfast."
Mr Gentile said Spirit would also have to look at the ongoing cost of pensions.
Mr Gentile said Bombardier's new owners plan on "zeroing out" the current pension deficit
Part of the deal with Bombardier involves Spirit paying around $130m (£100m) to clear an existing pension deficit.
Mr Gentile said: "We're zeroing out the pension deficit that currently exists today, so we start with a clean slate.
"Then we'll work with the union and the pension trustee in the UK and the pension regulator to determine the path forward to mitigate the ongoing expense of the pension."
What is Spirit AeroSystems?
One of the world's largest tier-one manufacturers and suppliers of aerostructures
Founded in 2005, as a spin-out of aerospace company Boeing
Employs more than 15,000 people worldwide, with operations in the UK, Malaysia, France and the US
About 12,000 of its workers are based at the company's headquarters in Wichita, Kansas
He said the firm had experience with UK pensions through its Scottish operation in Prestwick.
He added: "We also work very closely with the union - Unite which is in Prestwick and is also in Belfast."
- Published31 October 2019
