Bombardier Aircraft Delivery Delayed
Millionaire Michael
Huffington, the former congressman backing Arnold Schwarzenegger's
California gubernatorial campaign, has other things on his mind
besides the Governator. He's now fully immersed in a legal fight
with Bombardier over the long-delayed delivery of a brand new
$30-million Global Express that was struck by lightning.
The Canadian Globe And Mail reports both Huffington and
Montreal-based Bombardier have filed in court accusing each other
of failing to bargain in good faith. At issue, the delivery date of
Houghton's jet. The situation has dragged on for more than four
years.
Huffington (right) says in a letter he wrote Bombardier that
"substantial pain has occurred in [his] relationship" with the
aerospace company.
John Lawson, the former head of Bombardier's business jet unit
who ended up trying to mediate the dispute on Huffington's behalf,
said in a July 16 e-mail to Bombardier, "Michael has reluctantly
come to the conclusion that Bombardier does not want him as a
customer, which causes him some personal hurt."
The Globe and Mail reports Huffington wrote to Peter
Edwards, president of the Montreal-based company's business jet
division, on June 15th. He reportedly said he would continue doing
business with Bombardier "even in the light of Bombardier's severe
financial difficulties." Those problems were, at the time, just
becoming apparent to Bombardier's customers.
On The Other Hand...
Bombardier says it bent
over backwards to accommodate Huffington. The Global Express's
fuselage skin and structure were damaged during transportation, and
that the aircraft subsequently suffered a lightning strike that did
further damage.
The company accuses Huffington of making unreasonable demands
and not responding in a timely fashion to its efforts to put his
Global Express into service.
Huffington's purchasing agent and Bombardier first signed a
purchase agreement in late 1995, with delivery of the jet scheduled
for November of 1998, according to the allegations.
The millionaire also accuses Bombardier of trying to hide the
damage to the aircraft and that he only learned of the damage from
hired consultants.
Bombardier says in its court filing that lightning strikes are
not unusual and that any damage to model 9125 was repaired and the
jet met all airworthiness requirements.
Bombardier also says it offered Huffington a choice: Accept
delivery of the original repaired model -- aircraft 9125 -- or get
the next one, number 9126, instead.
Call the lawyers.
Each party separately
told the other over the summer that the purchase agreement had been
terminated, according to the US court filings.
A May, 2003, Bombardier invoice contained in supporting
documentation to the Quebec Superior Court filings offers a rare
glimpse into usually confidential details about the premium jet,
which has a cruise speed just below the sound barrier and can reach
altitudes of more than 50,000 feet.
The invoice is for $29.75-million, of which Huffington's agent
had already put up $12.6-million in progress payments. Huffington
got a discount of $6.8-million and had to pay withholding tax of
$676,776. Total cost of the Global Express: $11.1-million.
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