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Compete for niche markets (ex: Business jet) and rely on taxpayer subsidies such as government loan guarantees by using « dual-use » regulations.
Canada was granted authority to impose up to C$2.1 billion (U.S.$1.4 billion) in retaliation on Brazilian imports as a result of Brazil’s failure to comply with the August 1999 WTO ruling ( www.csis.org )
The WTO has also found Canada guilty of providing illegal subsidies to buyers of Bombardier jets ( www.csis.org )
Unfair competition for the regional jet market?
Embraer has taken advantage of low labor costs and cheap currency
Bombardier has easier access to First World financing and technology
-Maurício Botelho, Embraer’s CEO:
"The aerospace market right now is very sensitive to change."
-An industry advocacy group in Washington:
"Embraer is the risk-taking company that Bombardier used to be."
Aircraft industry is not particularly capital intensive; less than 20% of GDP
Dependent on dollar
Consolidation complicated by the high degree of offshore ownership
Demand for significant reductions in the cost, while at the same time demanding greater technological and operational sophistication
focus increasingly on process, as well as product technologies, in order to come up with savings in product development, manufacturing and after-sales support
For Canadian industry, one that is focused on niche and foreign markets and dependent on a weak Canadian dollar for a competitive advantage, the only demonstrably effective industry-specific government policy lever has been R&D assistance; R&D is the lifeblood of this industry.