Liberals continue to talk to Saudis about GDLS contract amid late payments
General Dynamics in London, Ont.
LONDON, Ont. - It’s been 18 months of uneasiness for some local companies that supply parts to London’s General Dynamics Land Systems (GDLS) for the manufacturing of light armoured vehicles for Saudi Arabia.
But with Canadian government officials continuing to engage with Saudi Arabia, there is some hope relations are improving between Canada and the kingdom.
One supplier to GDLS says he had been receiving “trickle payments” from GDLS since July and has only been paid about half of what he is owed by the company.
After talking to CTV News Thursday, he did get a phone call from a contact at the company stating that he would be paid in full soon.
The supplier, who does not want to be identified for fear it might harm his relationship with GDLS, says normal payment terms are set for the first week of the month and he’s holding out hope he will get his money next week.
Another supplier, Andy Mavrokefalos, of Attica Manufacturing Inc., says his account with GDLS is now up to date, although he has experienced delays in the past.
London North Centre Liberal MP Peter Fragiskatos says delayed payment is not uncommon in large-scale defence contracts.
“I’m not talking specifically about this contract. I am just talking in general terms,” he says.
“There have been other businesses throughout the past year that have experienced some challenges. I can say unequivocally that overall the state of the local and national supply chain as it relates to GDLS remains healthy.”
Financial and other reports show Saudi Arabia is behind in payments to the tune of more than $3 billion for the light armoured vehicles (LAVs).
When asked if taxpayers would eventually have to foot the bill, Fragiskatos says the question is hypothetical.
“It’s extremely premature to have that conversation. That’s a misplaced conversation at the present time. My focus is on the workers (including suppliers). My focus is on doing everything I can to advocate for their interest,” he says.
Fragiskatos says his government remains engaged with Saudi officials. “I hope that rapport continues and it leads to a good outcome as far as the interest of local suppliers is concerned. I am working day in and day out…to make sure workers’ interests are protected.”
In 2014, the Concervative government signed a deal with GDLS worth $15 billion to provide LAVs to Saudi Arabia. That deal was upheld by the Liberal government despite concerns of human rights abuses.
Still, there is some local fear about the news that the Saudis are far behind in payment. It means long-term planning is difficult, says a supplier.
“A big issue is being so inconsistent and not knowing if and when the money comes.”
Mavrokefalos says while his account is up to date, there is uneasiness about the late payments from the kingdom.
“Of course it would be concerning in any business,” he says.
When asked for comment about payment for suppliers from GDLS Canada, the company replied with this statement: “We do not discuss our relationships with suppliers.”