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Winnipeg Free Press - PRINT EDITION

Vancouver bidder, union win delay in Aveos sale

By: Ross Marowits

Posted: 08/15/2012 1:00 AM | Comments: 0

MONTREAL -- A Quebec court has delayed the sale of Aveos' engine-repair business until next week to give the union and an unsuccessful bidder an opportunity to challenge the fairness of the proposed sale to Lufthansa Technik.

"From what transpired today, I think it is the best possible outcome and it will give us a chance to make things right here," IAMAW district chairman Chuck Atkinson said outside the courtroom.

The International Association of Machinists and Aerospace Workers and Vancouver-based MTU Aero Engines both challenged the transparency and fairness of the sale process and the veracity of the report submitted to the court by the chief restructuring officer.

Lawyers for the machinists union and MTU will split a half a day next Wednesday to grill Jonathan Solursh and present their case about why Lufthansa shouldn't be awarded the sale.

The court-appointed monitor and lawyers representing the other side will be given time to reinforce their recommendation to Justice Louis Gouin, Justice Jean-Yves Lalonde decided.

At stake are potentially more than 130 jobs in Montreal and Vancouver, mostly those of former Aveos workers.

Aveos terminated about 2,600 jobs across the country, including more than 400 in Winnipeg and some 1,800 in Montreal, when it suddenly obtained creditor protection and closed its maintenance, repair and overhaul bases in Winnipeg, Toronto and Montreal in March.

The judge granted the request for a delay after Air Canada (TSX:AC.B) agreed to extend the deadline for its contract with the winning bidder beyond its Aug. 15 deadline to meet its engine-maintenance needs for the fall season.

The airline's agreement includes an exclusive contract for engine business through 2018.

Lufthansa also agreed to the delay.

The union said the German company wouldn't preserve jobs in Canada, while the competing bid from MTU would save 100 jobs in Montreal and 30 in Vancouver.

But Solursh's report said both bids "appeared to be equal" in terms of job creation in Quebec, although the MTU offer would create up to 130 jobs in Vancouver. In any case, he said those extra jobs won't likely go to former Aveos employees since the B.C. centre focused on airframe overhaul.

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

-- The Canadian Press

Republished from the Winnipeg Free Press print edition August 15, 2012 B5

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