Gilles Labb had a dream to create a diversified aerospace powerhouse.

The head of Hroux-Devtek Inc. spent decades building the Montreal company into a thriving maker of aircraft landing gear, airframes and industrial turbines with an ambitious growth strategy.

But in a strategic about-face in July, the company announced a plan to focus on its landing-gear business and sell most assets in its other divisions. Mr. Labb said the board, fed up with the companys languishing stock price, decided to sell non-core assets in a bid to boost shareholder value as a pure play.

The decision has had the desired effect. Hroux-Devtek shares have soared more than 50 per cent since the news.

But the move also highlights growing concern about Canadas aerospace sector.

After more than two decades of solid progress, Canadas aerospace industry today is under threat from an increasingly competitive global aerospace market and eager new rivals intent on dominating the sector.

The loss of a promising aero structures research and development hub at Hroux-Devtek weakens Canadas aerospace sector and makes it more vulnerable to hungrier emerging economies, said Mehran Ebrahimi, a professor and director of a group studying aerospace-company management at the University of Quebec at Montreal.

A part of our expertise has just been sold, he said. This is worrying and were seeing more and more of it.

Canadian aerospace manufacturing owes much of its world-class status to Bombardier Inc.s game-changing family of regional jets. Where it once had only one rival Brazils Embraer SA in the regional-jet market, Bombardier now faces competition from new entrants in China, Russia and Japan.

In its business-jet division, Bombardier used to be up against four big rivals. Then, Brazils Embraer got into the game and now companies in China and Japan are also planning to join the fray.

Originally posted here:

Canada’s shrinking aerospace horizon