January 24, 2008 -- FEDERAL cabinet ministers and senior executives from Boeing and Lockheed Martin announced $341 million worth of work for western Canadian companies on Wednesday-- but left unsaid was the prospect of a massive piece of work that may yet be won by a Winnipeg company.

The announcements were tied to the recent Canadian Forces purchases of four C-17 Globemaster III tactical airlift transport planes from Boeing and 17 smaller C-130J Super Hercules transport planes from Lockheed.

The good news contained in the scant details of the announcement is that the lion's share of those western Canadian contracts will go to two Winnipeg companies -- Boeing Canada Technologies and Standard Aero. The not-so-good news is that they are already doing the work that was announced and likely would have been doing it regardless of the $3 billion worth of industrial benefits in Canada that Boeing and Lockheed Martin are committed to spending.

But the biggest news of the day was the one that was not announced. Prospects are good that Standard Aero will win the 20-year engine maintenance contract for the new fleet of C-130Js that could be worth several hundred million dollars.

Although neither Lockheed Martin nor Standard Aero officials would rate the odds of Standard winning that work, both made it clear that the Winnipeg company would be in the running. Jack Crisler, international vice-president business development air mobility for Lockheed Martin, said "We will run fair and open competition for that work."

But he also acknowledged that Standard is the only maintenance repair and overhaul (MRO) company in North America certified by the engine manufacturer, Rolls-Royce, to work on the particular engines that will run the C-130Js.

And Crisler also said that Lockheed's contract with the Canadian government is for at least 75 per cent of the 20-year airframe and engine maintenance to be directly contracted to Canadian companies.

That's not to say that Rolls-Royce, or someone else won't set up a Canadian engine MRO operation in the meantime. The first C-130Js are not expected to be delivered for three years and the first maintenance activity would be some time after that, so there is time for things to change in the market.

But as it stands, as one Standard official said, "We would be a preferred source."

As is the case with all major government procurements, Boeing and Lockheed are obliged to spend 100 per cent of the value of the aircraft purchases in Canada on advanced technology, preferably contracts that lead to long term industrial development here.

Boeing and Lockheed Martin have made agreements with companies across the country for work valued at about 60 per cent of the total of these two contracts.

Similar announcements to the one in Wednesday were made in Montreal and Halifax earlier this week. Quebec, with the largest aerospace industry in the country -- about 10 times the size of Manitoba's -- is to receive about $660 million and Atlantic Canada will receive about $294 million.

Few details were provided in those announcements, but there was enough Wednesday to understand that in the case of the Winnipeg announcements, the work at Boeing and Standard is already being done -- 787 auxiliary power unit inlet door tooling and production at Boeing Winnipeg and T56 engine maintenance overhaul and repair at Standard.

Neither "contracts" will mean new jobs at either company. Boeing is bursting at the seams with about 1,500 employees in Winnipeg. Standard has been working on T56 engines on various Lockheed Martin planes since 1997 and renews the contract annually. It has close to 300 people doing that work at its Winnipeg plants.

Winnipeg NDP MP Pat Martin complained Wednesday that Manitoba was not getting its fair share, but senior industry officials in the province said they did not believe there was enough evidence to play that card now.

Vic Gerden, president of the Manitoba Aerospace Association, noted that the regional industrial benefits have not been completed.

"I don't think it's fruitful to do that comparison at this point," he said.

That sentiment is probably even more apt in light of the fact that a Winnipeg company looks to be a front runner for a contract potentially worth hundreds of millions of dollars.

Source: Winnipeg Free Press