FEATURE INTERVIEW
JIM QUICK
AEROSPACE WORKS TO COMBAT THE DEVASTATING EFFECTS OF COVID-19
CDR sent Ottawa Bureau Chief, James Careless, to talk to the head of AIAC, Canada’s leading aerospace group, about how his industry is coping with Covid-19, government policy, declining revenues, association initiatives and much more. Here is that conversation.
Few sectors have been as pummeled by COVID-19 as much as the Canadian aerospace industry. Based on a survey conducted by AIAC (the Aerospace Industries Association of Canada), its membership expects Canadian aerospace revenues to decline by at least 40 per cent in 2020.
To its credit, AIAC has been taking the fight to COVID-19 since the shutdowns took place in March 2020 -- helping the association’s members access stop-gap federal funding while at the same time, lobbying for sustained government support to help the industry weather the pandemic storm. Such support is already being provided to Canada’s aerospace competitors in places like France, whose government has pledged nearly $26 billion to the cause.
CDR: Jim thanks for speaking to CDR again for our annual update on Canada’s aerospace industry. We know that COVID-19 has been devastating to the aerospace industry but specifically, how has the pandemic affected your work on Vision 2025, AIAC’s initiative to promote Canadian aerospace’s continued success in the global market?
JQ: We’ve tried very hard to continue with Vision 2025. To this end, we’ve partnered with Roland Berger, a major international consulting firm that does work on aerospace.
As the world recovers from COVID-19, Roland Berger are helping us track what other jurisdictions are doing to support their aerospace industries, and what do we need to do here in Canada as part of our proposed Aerospace Recovery Plan. We’ve also been discussing this in detail with the federal government.
COVID-19 HAS DEVASTATED THE INDUSTRY
CDR: Just how hard has COVID-19 hit Canadian aerospace?
JQ: It has been devastating for us. We've got 95% of our member companies saying that they are not working at full capacity and that more than 60% of them have already laid off workers. 75% say that they fully expect to have layoffs in the future.
Some reports say that the airline and aerospace industries are probably the most economically affected by COVID-19. AIAC is helping out by keeping our members up to date on what's happening and what financial assistance is available to them but, yes, it has been devastating.
CDR: Given the economic impact of COVID-19, is the AIAC’s push for a federal National Aerospace Strategy more important now than ever?
JQ: Yes, we’ve been saying for several years now that Canada needs to have a National Aerospace Strategy and that it has to be an industrial-based strategy. The reason why is because this is precisely what our competitors are already doing. In response to COVID-19, France and Germany are putting billions of dollars into their aerospace industries and they're citing a national strategy approach as the basis for doing it.
A National Aerospace Strategy is necessary here in Canada because it would provide us with a co-ordinated approach for a very specific ecosystem. It would provide the Canadian aerospace industry with a predictable path going forward and allow us to know what we need to do as a nation.
This matters, because we’re really concerned that Canadian aerospace is in danger of falling behind globally. Right now, we're ranked fifth in the world, making an annual $25 billion contribution to Canada’s GDP and supporting 215,000 skilled, well-paying jobs nationwide.
If we start slipping to eighth or ninth place, we're going to be in some big trouble as a nation. That’s why AIAC has put together the elements of a National Aerospace Strategy. We have presented this to government, and we're telling that if we're going to survive this crisis, these are the kinds of things that we need done.
A NATIONAL AEROSPACE STRATEGY
CDR: How has COVID-19 affected industry associations like AIAC?
JQ: The pandemic is cutting into our members’ revenues, which means that it also affecting us. Our membership revenue is based on the Canadian revenues generated by our member companies. When that goes down, our revenue goes down.
That said, we’re focused on our members right now to help them get through this whole thing. This is why AIAC is acting as an interface between industry and governments, and making sure that our members have critically-important information about the full range of government programs.
We’ve also conducted comprehensive surveys of our members to find out specifically about how our industry is being affected by COVID-19, so that we've got good data to back our discussions with government. We’ve done some polling of Canadians as well, to make sure we understand what they know about our industry and whether they would support us asking government for increased financial support.
CDR: And, the answer is?
JQ: The answer to that is a resounding yes. Canadians know how important the aerospace industry is to our economy and our sense of national pride.
CDR: What else has AIAC been doing during COVID-19?
JQ: Overall, we’ve been quite busy. Our goal is to serve as a concierge support system for our members. To this end, we’ve fielded over 550 inquiries from our members, answering different questions about seeking government help. We have also participated in over 140 conference calls with federal and provincial governments, and 40 to 50 direct calls with ministers’ offices talking about the industry and what needs to be going on.
WEBINARS A HIT WITH MEMBERS
CDR: And, we understand you’ve also held more than 18 member webinars and events since COVID-19 started?
JQ: Yes, and they’ve been a great hit with our members. We’ve hosted Ministers Bains and Garneau on conference calls, the Parliamentary Aerospace Caucus with co-chairs from all four major federal parties, and international experts like Roland Berger telling everyone what’s happening in aerospace in the rest of the world.
The Aerospace Caucus is particularly important to our industry, because there are 48 MPs who have aerospace employers in their ridings. Our goal is to get this caucus to really focus on the elements of a successful National Aerospace Strategy. The live online session we did with their four co-chairs saw 80-90 AIAC members take part.
We’ve had financial experts from Ernst & Young talk about COVID-19 government programs, and legal experts delve into related human resources issues.
We had Peter Hall on. He's the VP and Chief Economist at Export Development Canada. He does great work in this area, which is why AIAC has asked him to speak with our members numerous times.
AIAC has hosted experts from other industry associations talking about what they do and what's happening in other jurisdictions. For instance, my colleague Eric Fanning was on. He’s President and Chief Executive Officer of the Aerospace Industries Association in the US.
We’ve had speakers from Europe, and the Chair of the Farnborough International Airshow, Hayley Boyton. And, we haven’t just heard from them. Our members have actually spoken with them as well during these events.
CDR: All of these webinars were virtual events, which begs a question: How has COVID-19 changed the way in which AIAC communicates with its members?
JQ: It all started when the crisis really hit in March, 2020. One of the things that we wanted to do was to ensure direct, timely communications to our members. So, we created a digital newsletter that went out to our members every single day. It covered vital pandemic-related information from government and other sources.
Now that things have slowed down, we’ve cut back to three newsletters a week. But, we can scale up to daily if we need to. We’ve also done the online webinars and other events that I mentioned earlier.
CDR: We’ve heard that, in addition to the newsletter, AIAC has launched a specialized COVID-19 industry resource website, produced podcasts that are available online, and been very active on social media?
JQ: Yes, we have. It comes down to directing all available resources to serve our members as best we can. We started doing that back in March 2020, and we’ve been doing it ever since.
WHAT’S IN THE FUTURE
CDR: Looking ahead, what is coming up for AIAC in your ongoing battle with COVID-19?
JQ: Well, we’re going to persuade government to accept our economic recovery plan for the Canadian aerospace industry.
We believe that we have an excellent plan. We believe it is one that will propel us forward from a global perspective, and in the global market. So we're going to keep doing that. And we will also continue to work with international aerospace associations on cross-jurisdictional issues.
Our extensive online communications will continue. The newsletters and the webinars and the podcasts. And, we’ll continue to meet with key federal people like Ministers Bains and Garneau, and Finance Minister, Chrystia Freeland. We want to see aerospace specifically mentioned in the Speech from the Throne and the next Federal Budget – and get a National Aerospace Strategy in place.
That’s the kind of work that we're doing on a going-forward basis, as we do our best to keep the momentum rolling. There are just too many good jobs and cutting-edge expertise within the Canadian aerospace industry to not save. We have got to do everything we can to get through this crisis, and position Canadian aerospace to prosper in the post-pandemic world that will arrive someday. Because this is what our competitors are doing in France, Germany, and other countries.
PROSPERING IN A POST-PANDEMIC WORLD
CDR: The position that the pandemic has put Canadian aerospace in, reminds us of a quotation attributed to Winston Churchill during the darkest days of WW II: “If you’re going through hell, keep going.”
Do these words sum up your association’s approach to COVID-19?
JQ: It does.
When the AIAC’s members are saying, “… we're going to lose 40% of our revenues this year and we're going to have to lay off all the talent that we spent years and decades trying to recruit,” it certainly feels like the Canadian aerospace industry is going through the kind of hell Churchill was speaking of.
But you know, this is a very resilient industry and we will come out of it. We will keep going until we get to the other side. And we will get there. To make this happen, our industry needs support from the government. That's what we're focused on getting right now.
We also want to assist in Canada’s post-pandemic economic recovery, when the government is able to turn its attention to that. We think we're well positioned to help our Canadian aerospace industry. This is why we've got proposals filed with the right federal ministers and the Prime Minister's office.
The AIAC is going to keep doing that, as well as creating new events to share vital and timely information with our members. We're also going to continue to work with the provincial and regional associations to make sure that they're informed about and supportive of what we do. So that's pretty much what we've got in front of us.
CDR: Thank you.
James Careless is CDR's Ottawa Bureau Chief
