MONTREAL - A substantial part of Bombardier's CSeries aircraft will be built in the Montreal area after Pratt & Whitney announced Monday that the final assembly and testing of its U.S.-designed engine will take place in an adjacent new facility.
Pratt & Whitney Canada said it will invest $575.3 million in several Quebec facilities over five years, including about half for the construction of a new Mirabel Aerospace Centre.
The centre will assemble and test the geared turbofan engine known as PW1524G, along with the PW800 family of engines.
The 300,000-square-foot building will be constructed in 2009 near the site chosen by Bombardier to assemble the 110-to 130-seat aircraft at Mirabel airport north of Montreal.
The Quebec government is contributing $141.9 million for infrastructure and equipment.
"Today's announcement constitutes a logical expansion of our operations," Pratt & Whitney Canada president Alain Bellemare said at a news conference in Mirabel.
Bombardier's (TSX:BBD.B) decision to assemble the CSeries at Mirabel "was a determinant factor in the decision to locate the plant here," he said at the announcement attended by Premier Jean Charest.
Three others factors included the strength of the Mirabel aerospace area, quality of available labour and government contributions.
All versions of the Pratt & Whitney Canada designed PW800 family of engines, including those developed for future platforms, will be tested and assembled at Mirabel. The Geared Turbofan engine is being designed and developed in Hartford, Conn.
Pratt spokesman Jean-Daniel Hamelin said it only made sense to locate the assembly of the two engines together because they share a core technology.
The total investment is expected to create 565 Pratt & Whitney jobs at three Quebec facilities, including two on Montreal's south shore.
Hiring for the 325 jobs at Mirabel is slated to begin next year and ramp up ahead of the expected certification of the engines in 2011. Production of the CSeries is expected to begin in 2013. The PW800 won't be built until a year later.
Hamelin said Pratt will be in a strong position to hire the highly-technical employees required despite strong demand in Quebec's aerospace sector.
"We have a great product, we are a company that has grown in the past years so basically we will have to work hard to get the manpower and technical employees, but we're confident that we will be able to find the right employees."
Bombardier spokesman Marc Duchesne said Pratt's decision to assemble the engine "right next door is a very positive sign for us."
The transportation giant is looking for hire 600 professional positions, mostly engineers, along with 100 shop floor employees.
When CSeries production hits its peak in 2017, the company expects to add 3,500 direct jobs to its total work force.
Bombardier last week announced plans in Belfast, Northern Ireland, to hire 200 of the 800 employees expected to work on building the wings destined for the CSeries.
The fuselage will be built in China by China Aviation Industry Corp. I (AVIC1).
Lufthansa became the first CSeries customer when it signed a letter of interest for up to 60 aircraft, at a price of US$46.7 million each. The deal is worth more than $2.8 billion if firm and optional orders are exercised.
The fuel-efficient planes are smaller than those currently offered by Boeing and Airbus. Bombardier expects to capture up to half of the market for 6,300 aircraft representing more than $250 billion of revenue over the next 20 years.
Bombardier estimates that about 35 per cent of CSeries planes will be sold in North America, with Europe, China and Asia-Pacific each accounting for 14 to 18 per cent.
One of the reasons Mirabel was selected over Kansas City, Mo., for final assembly was the company's confidence in the skilled labour market of the aerospace industry in Quebec.