News
Former Aveos employees protest proposed sale

Aug. 14, 2012, Montreal – Former Aveos employees plan to demonstrate outside a
Quebec courthouse Tuesday as their lawyers oppose a recommendation
to sell the insolvent aircraft maintenance firm's engine repair
business to Lufthansa Technik.

The head of the machinists union said it may seek a delay or
injunction to prevent the sale of this segment of the business
despite Air Canada's insistence that a deal be concluded by
Wednesday.

Chuck Atkinson, district chairman of the International
Association of Machinists and Aerospace Workers, said the German
company won't preserve jobs in Canada while a competing bid from
Vancouver-based MTU Aero Engines would.

But the court-appointed chief restructuring officer says both
bids "appeared to be equal" in terms of jobs creation in Quebec,
although the MTU would create up to 130 jobs in Vancouver.

In any case, Jonathan Solursh says those extra jobs won't likely
go to former Aveos employees since the B.C. centre focused on
airframe overhaul.

In a report to the court, he says MTU's offered price was about
half the price offered by Lufthansa.

Lufthansa doesn't have an engine repair facility in Canada but
plans to set up a small shop in Montreal employing about 15 workers
to fulfil part of the service requirements of Air Canada.
Most of the work will be carried out at its facilities overseas.

MTU doesn't service the airline's engine model and would need to
make significant investments in tooling, training, certification and
infrastructure to service the Air Canada contract. These extra costs
have "materially diminished" funds available to bid on the Air
Contract, Solursh said.

Also, MTU required that the sale of some Aveos tooling and
equipment be included, which would reduce the liquidation value
available to creditors.