Bidding wars

It’s pretty nasty stuff but it is part of economic development. Bombardier is clearly playing cities off each other in a public way to see where they can get the best deal.

A $240 million plan to entice a Canadian airplane maker to Kansas City flew through the Legislature on Wednesday as politicians praised it as Missouri’s best chance to land a super-sized development deal.

Political optimism aside, there is no guarantee that Bombardier Aerospace will choose to take Missouri’s incentives instead of those offered by its home country.

Bombardier, the world’s third-largest civilian plane manufacturer, is looking for a place to make its new series of 110- or 130-seat passenger jets. Missouri is offering a large swath of grassland near Kansas City International Airport as an alternative to Bombardier’s previously expressed preference of Mirabel, Canada, just north of its Montreal headquarters.

Missouri’s deal would provide up to $240 million in tax credits over eight years, beginning in 2013, based on the number of employees hired at the assembly plant. Bombardier would repay the tax credits, plus a 5.1 percent rate of return, by giving Missouri a fixed amount of money for each plane it sells from the plant.

Along with the state aid, Kansas City would issue bonds under which the city owns the property and lease it back to Bombardier.

Sponsoring Rep. Ron Richard predicted Missouri has about a 75 percent chance of landing the assembly plant.

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0 Responses to Bidding wars

  1. Kit says:

    Do you think Bombardier will return the millions in Government handouts its received over the years to stay in Quebec when it moves jobs south???
    It’s probably counting on another generous give away to stay.
    Another reason not to give corporate well-fare, most have not loyalty.

  2. nbt says:

    They threatened the Canadian government with this nonsense back in February.

    It’s quite comical considering they’ve received almost a billion dollars from Canadian taxpayers, so I guess we can fully assume they’ll pay it back in full before they dare move one job out of Canada, n’est pas??

    Furthermore, this isn’t the first time they’ve done this. In October 2005, Bombardier announced it was building an assembly plant in Mexico that would displace 500 Canadian workers.

    So the big question is: does using Canadian tax dollars to help create jobs in Mexico and the U.S sound like smart policy?

    The best way to answer the above is to encourage you to go check out the CTF’s corporate welfare report ‘On the Dole.’ It may open up your eyes to a few realities.

  3. Anonymous says:

    Bombardier seem to do this a lot. Arent they doing the same thing in Northern Ireland too?

  4. Anonymous says:

    This is where the ED people earn their money; vetting the opportunity.

    These guys are auctioning off to the highest bidder all over the world. Once a global leader in transportation technology, they are faultering.

    They even had a Fredericton office years ago and when the money ran out, they are no where to be found.

    It is easy to find companies willing to scoop up incentives. We need to find well-intentioned businesses that be profitable in New Brunswick regardless of the incentives; the incentives should simply be the icing on the cake. A tough assignment but that is what we pay ED people to do.

  5. richard says:

    Bombardier is just playing by the rules of the game. Apart from scale, what is the difference between what they are doing and the actions of a small businessman wheeling and dealing with local politicians/ town managers to get a favourable easement or zoning treatment? Ratepayers might still be losing either way. The bottom line is whether the communities receive a net benefit, not whether Bombardier moves on after a decade or two.