Evidence of meeting #39 for National Defence in the 40th Parliament, 3rd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was program.
A recording is available from Parliament.
4:40 p.m.
President and Chief Executive Officer, Canadian Sales Office, Composites Atlantic Limited
The proof, and I was just coming back to this, is that we work for all manufacturers of original equipment worldwide. EADS does not impose any restrictions on us.
Business is business.
4:40 p.m.
President and Chief Executive Officer, Canadian Sales Office, Composites Atlantic Limited
No, I didn't go this week. They do repair and overhaul.
December 9th, 2010 / 4:40 p.m.
President and Chief Executive Officer, Héroux-Devtek Inc.
Yes, we have two people there.
4:40 p.m.
President and Chief Executive Officer, Héroux-Devtek Inc.
I go to Fort Worth almost every month.
4:40 p.m.
Bloc
Claude Bachand Bloc Saint-Jean, QC
As for the numbers that I gave earlier, were you briefed there on the current cost of the aircraft and on the dangers I spoke about relating to the commission looking at decreasing the deficit? Did you just visit the assembly line, or were you told about the progress on the project for these aircraft and on the financing package?
4:40 p.m.
President and Chief Executive Officer, Héroux-Devtek Inc.
Meetings are held regularly. The suppliers are invited to take part in meetings with Lockheed Martin. They inform us of the status of the programs. Obviously, we move in those circles. What you have just shown me is not really a surprise. We are aware of this and are following it very closely. The program is a very big one for us. We are following it very closely to make sure we keep our market shares.
4:40 p.m.
Bloc
Claude Bachand Bloc Saint-Jean, QC
I'll now come back to industrial and regional benefits. Do you object to the fact that the Bloc Québécois is requesting that there be minimum guarantees of industrial and regional benefits?
I really want the government to say that the memorandum of understanding does not provide for that, but it doesn't do you any harm that the Bloc Québécois is telling the Minister of National Defence that we want minimum guarantees.
If I think about your reasoning, you are saying that you are part of the elite group of the global aerospace industry. You will get contracts, and you are so confident that you're saying that you don't need industrial and regional benefits. Still, I imagine that you are not offended that pressure is being put on the Minister of Industry and that a minimum is being requested. Do I understand this correctly?
4:40 p.m.
President and Chief Executive Officer, Héroux-Devtek Inc.
The Quebec region, and the Montreal region, make up more than 50% of the industry. It's also a very competitive industry. Since Quebec is competitive, it is going to win its fair share of contracts. In my opinion, we also need to understand that some major contractors in Quebec, such as Bell Helicopter, represent a large part of the market. But Bell Helicopter doesn't build fighter aircraft. With that in mind, we need to adjust the percentages.
As you know, I am president of the Aéro Montréal board of directors. I am convinced that our industry in Quebec will be able to get its fair share of the contracts.
4:40 p.m.
Bloc
Claude Bachand Bloc Saint-Jean, QC
How many industries in Quebec do you think could take part in the F-35 project?
4:40 p.m.
President and Chief Executive Officer, Héroux-Devtek Inc.
I know of several. CMC is there. Our company is there.
4:40 p.m.
President and Chief Executive Officer, Héroux-Devtek Inc.
CAE, Pratt & Whitney, we could go on. There are a number of them in Quebec. I don't think that I can list all of them for you today.
4:40 p.m.
President and Chief Executive Officer, Canadian Sales Office, Composites Atlantic Limited
There are level 1 companies, like Pratt & Whitney. Your company is also a level 1 company. After that, there are levels 2, 3 and 4.
4:40 p.m.
President and Chief Executive Officer, Héroux-Devtek Inc.
There are suppliers, too.
4:40 p.m.
Conservative
The Chair Conservative Maxime Bernier
Yes, all those companies are in the Montreal aerospace sector. How fortunate they're in your neck of the woods.
4:40 p.m.
Conservative
LaVar Payne Conservative Medicine Hat, AB
Thank you, Mr. Chairman, and thank you to the witnesses for coming today.
I know it's an important time for your organizations, particularly with the joint strike fighter, and what it means in terms of business for Canadian companies, for employees, and the opportunity to certainly get the new technology and participate in this joint strike fighter program. As you said, your industries can compete and have competed worldwide.
There are a few questions in terms of general information that I'd like to find out from you folks. All of you can take an opportunity to answer this.
I did hear about some subcontractors that potentially your organizations work for. I think, Mr. Beach, you said there were something like 22 companies. I don't know how many employees that is, but what would happen if in fact we cancelled the joint strike fighter in terms of those kinds of contracts?
I'd also like to find out from Monsieur Labbé and Monsieur Guitton, what is the number of subcontractors that you have and the impact of the loss of a contract?
4:45 p.m.
President, Handling Specialty Manufacturing Ltd.
I can speak first.
The supply chain on the joint strike fighter was extensive. The area we are in, in Grimsby and around the Great Lakes, has been very well known for the automotive industry and the supply chain to feed that industry. It has been damaged significantly by the impact of the losses to the auto industry and a lot of these firms have tried to diversify. We did this back in the early 2000s. I'm very thankful that we took those initiatives to go in different directions and to diversify. About 90% of our throughput in the nineties was automotive and today it's less than 10%.
Those supply chain people were highly reliant on the automotive industry and on Handling Specialty for the primary contracts we would produce—large assembly lines and marriage lines for the automotive. When we were able to obtain these large contracts to take the place of those automotives that had gone away, we provided survival to a lot of supply chains. They are very dedicated to us.
They're also the supply chains we're using today for their intellectual property to come to us with ideas and programs that make us more competitive. In this day and age it's not about just you and your intellectual property, it's about one plus one equals three. Our ability to look to our supply chain and come together with ideas and innovation makes us more competitive on a global platform. So at Handling Specialty we care very much about our employees, but we spend a lot of time and energy with our supply chain.
It was very important to us that Tom Burbage took the time to shake hands with each and every one of them during our joint strike fighter special day. It really does speak to what the joint strike fighter can do.
There are three principals sitting here before you, but there is a large level of supply chain. I can tell you that when we ramp up for major projects, it's difficult for small business to go out and surge their payroll that quickly, so we subcontract work. Although we may have doubled our capacity in terms of manpower, we did go to the supply chain. We bring in contractors and people who know us. That sponsors good economic stability.
I hope I helped you with that answer.