Bombardier Deal With Airbus Demonstrates Procurement’s Value

Posted on October 17, 2017


“In exchange, it will offer Bombardier’s 100- to 150-seat plane its global procurement, sales and marketing and customer support expertise.” – Bombardier hands control of C Series airliner to Airbus, Globe And Mail October 16th, 2017

Right off the bat, I am not going to suggest that the just-announced deal between Canada’s Bombardier and France’s Airbus hinged on procurement. Let’s face it, the upwards of 300 percent tariffs that the US Government has imposed on the former’s C Series jet sale to Delta that has everyone up in arms – except maybe Boeing, was incentive enough for making this deal happen the second time around.

However, with a transaction of this magnitude in which there was “no cash consideration,” I found it interesting that Airbus’ global procurement capability was cited as one of the leading benefits Bombardier would receive in consideration for selling a 50.01-percent interest in the C Series limited partnership to the European multinational corporation.

This is just further proof of procurement’s growing (and strategic) importance in a dynamic and complex global marketplace.