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Bombardier not Interested in Fairchild Dornier

Canada's Bombardier views with equanimity the possibility that Boeing will muscle in on one of its key business segments by buying a stake in Fairchild Dornier.

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The Canadian transport giant is a big player in Germany, but mainly in railworks and wagon construction

Canadian aerospace and rail-technology group Bombardier Inc. on Monday made it clear that it wouldn't be coming to the rescue of Fairchild Dornier, the privately owned German-U.S. company, which needs financial partners to fund its ambitious project to develop a new family of regional aircraft.

"We currently have no interest in buying into Fairchild Dornier," said Bombardier chief Robert Brown on the fringes of an meeting in Frankfurt.

He said there had been contact between the two countries, and acknowledged that Fairchild Dornier would fit in well with Bombardier, but he stressed that formal talks had not taken place.

According to a report in Aviation Week magazine, Boeing Co., the world's biggest plane maker, is set to buy a "significant stake" in Fairchild Dornier. This would see Boeing muscling in on Bombardier's territory, since it would mark its first foray into the market for regional jets, in which Bombardier is global leader.

But if Boeing does have any plans in this direction, Bombardier does not see them as a threat to its own position. "We're not afraid of Boeing," said Brown. Following political pressure, Bombardier is now reviewing its decision to close the plant of its German unit, DWA Deutsche Waggonbau, in the town of Ammendorf in Saxony, eastern Germany.

In mid-November, the Berlin-based Bombardier Transportation GmbH unit announced plans to lay off around 1,000 workers. And though the workforce at Ammendorf will probably be trimmed, the group actually plans to expand its German workforce from the current level of around 9,300, Brown said on Monday.

But Bombardier still plans to sell off the Vetschau plant in the eastern German state of Brandenburg, Brown said. He said three parties are in the running to buy the plant, but he didn't name any names.

In Bombardier's dispute with DaimlerChrysler AG over the valuation of rail technology unit Adtranz, which Bombardier bought in 2001, Brown is not ruling out the possibility of an out-of-court settlement.

But he said if a settlement is not reached, he is prepared to fight the dispute to the bitter end, taking his group's claim to the International Chamber of Commerce. Bombardier is seeking 1 billion euros in damages. It claims that DaimlerChrysler overstated the value of Adtranz at the time of the sale.

The Canadian group agreed to pay 790 million euros in cash but was unable to view Adtranz's accounts until after the Federal Cartel Office approved the deal. It therefore said at the time of purchase that the price could still be subject to change.

Bombardier has said that its claim of damages was largely based on material breaches of contractual representations and guarantees, including a significant deficiency in the value of adjusted net assets. The group will file the claim under an arbitration process governed by the rules of the International Chamber of Commerce.

DaimlerChrysler has dismissed the damage claim as "absurd and groundless in every respect."

But Brown believes his company's claim has a strong chance of success. He stressed that despite its complaint about the valuation of Adtranz, he considers the acquisition to have been the right thing to do strategically.

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