Airbus, Quebec reach $1.2 billion investment deal for A220 jet program - Reuters | Canada News Media
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Airbus, Quebec reach $1.2 billion investment deal for A220 jet program – Reuters

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MONTREAL, Feb 4 (Reuters) – Europe’s Airbus (AIR.PA) and Quebec said on Friday they have agreed to a $1.2 billion investment deal that would allow the Canadian province to remain in the loss-making A220 jet program until the venture is likely to turn profitable.

Under the deal, Airbus would invest $900 million, while the Quebec government would put $300 million into the program, according to a statement.

The deal would defer by four years the period when Airbus buys out Quebec’s 25% stake in the small jetliner from 2026 to 2030, it said.

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The program is not expected to be profitable before 2025.

While the 110-130 seat A220 has benefitted from airlines’ preference for relatively small jets during the pandemic, Airbus has yet to secure low enough prices for many of the plane’s components to push the A220 project into the black. read more

Reuters reported on the deal earlier, citing sources. read more

Contracts with key suppliers such as Raytheon Technologies (RTX.N) were originally set under Canada’s Bombardier , which lacked purchasing power as it tried to enter the mainstream jet market and ceded control of the jet program to Airbus in 2018.

Airbus was expected to use its global marketing network and higher purchasing power from suppliers to move the project into the black, but while sales have soared industry sources say it has struggled to win the concessions it wants from suppliers.

It has secured price cuts of some 20% from key suppliers but is pushing for another comparable cut, while looking at whether some parts could be redesigned to make them more efficient to produce, industry sources said.

The A220 is built both at an Airbus plant in the Montreal area and at the Mobile facility in Alabama.

In 2020, Canada’s Bombardier exited the program, the first all new narrow-body jet in 30 years initially called the CSeries, after it was beset with delays and cost overruns.

The deal gave Airbus a 75% stake in the A220 program and the Canadian province of Quebec was left with the remaining 25% after agreeing to invest $1 billion in the CSeries back in 2015.

Talks about an agreement were reported in January by the Journal de Montreal.

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Reporting By Allison Lampert in Montreal and Tim Hepher in Paris; Additional reporting by David Ljunggren in Ottawa and Ismail Shakil in Bengaluru; Editing by Elaine Hardcastle, Kirsten Donovan

Our Standards: The Thomson Reuters Trust Principles.

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Tesla shares soar more than 14% as Trump win is seen boosting Elon Musk’s electric vehicle company

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NEW YORK (AP) — Shares of Tesla soared Wednesday as investors bet that the electric vehicle maker and its CEO Elon Musk will benefit from Donald Trump’s return to the White House.

Tesla stands to make significant gains under a Trump administration with the threat of diminished subsidies for alternative energy and electric vehicles doing the most harm to smaller competitors. Trump’s plans for extensive tariffs on Chinese imports make it less likely that Chinese EVs will be sold in bulk in the U.S. anytime soon.

“Tesla has the scale and scope that is unmatched,” said Wedbush analyst Dan Ives, in a note to investors. “This dynamic could give Musk and Tesla a clear competitive advantage in a non-EV subsidy environment, coupled by likely higher China tariffs that would continue to push away cheaper Chinese EV players.”

Tesla shares jumped 14.8% Wednesday while shares of rival electric vehicle makers tumbled. Nio, based in Shanghai, fell 5.3%. Shares of electric truck maker Rivian dropped 8.3% and Lucid Group fell 5.3%.

Tesla dominates sales of electric vehicles in the U.S, with 48.9% in market share through the middle of 2024, according to the U.S. Energy Information Administration.

Subsidies for clean energy are part of the Inflation Reduction Act, signed into law by President Joe Biden in 2022. It included tax credits for manufacturing, along with tax credits for consumers of electric vehicles.

Musk was one of Trump’s biggest donors, spending at least $119 million mobilizing Trump’s supporters to back the Republican nominee. He also pledged to give away $1 million a day to voters signing a petition for his political action committee.

In some ways, it has been a rocky year for Tesla, with sales and profit declining through the first half of the year. Profit did rise 17.3% in the third quarter.

The U.S. opened an investigation into the company’s “Full Self-Driving” system after reports of crashes in low-visibility conditions, including one that killed a pedestrian. The investigation covers roughly 2.4 million Teslas from the 2016 through 2024 model years.

And investors sent company shares tumbling last month after Tesla unveiled its long-awaited robotaxi at a Hollywood studio Thursday night, seeing not much progress at Tesla on autonomous vehicles while other companies have been making notable progress.

Tesla began selling the software, which is called “Full Self-Driving,” nine years ago. But there are doubts about its reliability.

The stock is now showing a 16.1% gain for the year after rising the past two days.

The Canadian Press. All rights reserved.

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S&P/TSX composite up more than 100 points, U.S. stock markets mixed

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TORONTO – Canada’s main stock index was up more than 100 points in late-morning trading, helped by strength in base metal and utility stocks, while U.S. stock markets were mixed.

The S&P/TSX composite index was up 103.40 points at 24,542.48.

In New York, the Dow Jones industrial average was up 192.31 points at 42,932.73. The S&P 500 index was up 7.14 points at 5,822.40, while the Nasdaq composite was down 9.03 points at 18,306.56.

The Canadian dollar traded for 72.61 cents US compared with 72.44 cents US on Tuesday.

The November crude oil contract was down 71 cents at US$69.87 per barrel and the November natural gas contract was down eight cents at US$2.42 per mmBTU.

The December gold contract was up US$7.20 at US$2,686.10 an ounce and the December copper contract was up a penny at US$4.35 a pound.

This report by The Canadian Press was first published Oct. 16, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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S&P/TSX up more than 200 points, U.S. markets also higher

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TORONTO – Canada’s main stock index was up more than 200 points in late-morning trading, while U.S. stock markets were also headed higher.

The S&P/TSX composite index was up 205.86 points at 24,508.12.

In New York, the Dow Jones industrial average was up 336.62 points at 42,790.74. The S&P 500 index was up 34.19 points at 5,814.24, while the Nasdaq composite was up 60.27 points at 18.342.32.

The Canadian dollar traded for 72.61 cents US compared with 72.71 cents US on Thursday.

The November crude oil contract was down 15 cents at US$75.70 per barrel and the November natural gas contract was down two cents at US$2.65 per mmBTU.

The December gold contract was down US$29.60 at US$2,668.90 an ounce and the December copper contract was up four cents at US$4.47 a pound.

This report by The Canadian Press was first published Oct. 11, 2024.

Companies in this story: (TSX:GSPTSE, TSX:CADUSD)

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