Bombardier offers majority stake in C Series to Airbus
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Well, isn't that nice. They take a billion in government money, then without missing a step start offshoring jobs.
Changing economics mean the Q400 must compete head-on against the much cheaper ATR72, and the reality is in most markets the ATR will win the sale 9 times out of 10.
Similarly, the half-abandoned CRJ struggles against Embraer's offerings (especially with the E2s around the corner) plus they must also compete against newcomers such as the MRJ.
It's either cut cost and offshore some jobs, or completely shut down the programs.
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I wonder if all people contributing to pensions in QC now realize that $1.5-BN of their future incomes now rides on the success of the program. If it were to fail, the knock-on effect of ongoing unfunded general pension liabilities across La Belle Province would be enormous.
With the Transportation Division being valued at $5-BN and the overall Market Cap at $3-BN, the stock market is indicating that the Aerospace Division is worth a (NEGATIVE) $2-BN.
Interesting times...
With the Transportation Division being valued at $5-BN and the overall Market Cap at $3-BN, the stock market is indicating that the Aerospace Division is worth a (NEGATIVE) $2-BN.
Interesting times...
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er, you tooks the words right out of my mouth, I doubt the average PQ resident understands this in either official language, It will extend the problem if what was/is DH Canada gets dragged down by this, not to mention all the sub contractors and employees around the country, yesterday the air was full of C Series on flight tests, lets hope they wrap this up ASAP and start delivering a few!
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Heard yesterday on CBC Radio, a conservative "think-tank" source says that in the last 50 years, (since 1965), Bombardier/Canadair received 80 government "handouts", i.e. funds other than corporate tax benefits that were not necessarily repayable. Yup, in 50 years, 80 handouts.
Last edited by evansb; 2nd Dec 2015 at 20:42.
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Having spent a fair bit of time around the Bombardier plants it seems to me that there would be no need to go ofshore if the work ethic in the various plants could be ramped up a few notches, one hears this from a number of production employees, not just senior management {or mis- management if you prefer} but that there MUST be change there is no doubt!
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Bombardier presses Ottawa for $1-billion in aid for C Series
The Globe and Mail
What's another US$1 Billion between, uh, 'friends'?
Bombardier Inc. is pressing the Canadian government for $1-billion (U.S.) in aid as the aircraft maker works to further bolster prospects for its new C Series plane after securing deals with Quebec and the province’s big pension fund manager, according to a well-placed source.
What's another US$1 Billion between, uh, 'friends'?
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CS100 certified, time to clean house? Long overdue...
Bombardier's Beaudoin seen stepping down as chairman
More from: Reuters
Bombardier's Beaudoin seen stepping down as chairman
WASHINGTON/MONTREAL (Reuters) - Pierre Beaudoin is expected to step down as executive chairman of Canada's Bombardier Inc in early 2016, according to a source familiar with discussions about the issue, a move that could erode family control of the plane and train maker.
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The fallout with Airbus continues.
Airbus Executives call CSeries "an orphan":
The question is... why are they making these public statements now? The Airbus-Bombardier talks collapsed months ago.
Either Airbus is very confident that the CSeries is going nowhere, or just the opposite -- an aggressive Bombardier sales campaign targeting Airbus customers might be behind these comments?
To be sure, approaching Airbus was a strategic blunder...
Airbus Executives call CSeries "an orphan":
Executives at Airbus Group SE, the world’s biggest plane maker, dismissed the Bombardier C Series jet as an “orphan” and said that talks between the two companies aimed at propping up the struggling Canadian aircraft are dead.
Speaking at Airbus’s annual press conference Tuesday in Paris, John Leahy, Airbus’s chief salesman and commercial officer, called the C Series “a nice little plane” that was probably forever doomed to be a poor seller. ...
Tom Williams, Airbus’s chief operating officer, said Bombardier will have to invest heavily in the C Series over the long haul if it hopes to make it a success. “If you take a 10- or 15-year view, if you’re willing to invest in customer financing, training, spares, residual-value guarantees et cetera, that needs a lot of deep pockets and a long-term commitment,” he said.
Speaking at Airbus’s annual press conference Tuesday in Paris, John Leahy, Airbus’s chief salesman and commercial officer, called the C Series “a nice little plane” that was probably forever doomed to be a poor seller. ...
Tom Williams, Airbus’s chief operating officer, said Bombardier will have to invest heavily in the C Series over the long haul if it hopes to make it a success. “If you take a 10- or 15-year view, if you’re willing to invest in customer financing, training, spares, residual-value guarantees et cetera, that needs a lot of deep pockets and a long-term commitment,” he said.
Either Airbus is very confident that the CSeries is going nowhere, or just the opposite -- an aggressive Bombardier sales campaign targeting Airbus customers might be behind these comments?
To be sure, approaching Airbus was a strategic blunder...
Thread Starter
The question is... why are they making these public statements now?
Good question.
My guess is that AB initiated the discussions of a few months ago as a 'fishing' expedition. John Leahy is famous for being bombastic and disruptive and the latest effort is just that - get Bombardier at a low point and kick more sand in their face.
My guess is that AB initiated the discussions of a few months ago as a 'fishing' expedition. John Leahy is famous for being bombastic and disruptive and the latest effort is just that - get Bombardier at a low point and kick more sand in their face.
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Ideally, Airbus would love it if they had NO competition. The reality is, they have competition as does every other company building aircraft.
No doubt Boeing, Bombardier, and others would love to have a monopoly, but alas, no such reality. Not even for a dominant player like Airbus.
Yes. Bombardier are building the C series in the face of extremely difficult markets, oil prices, competition, financial markets, you name it. But, they're likely to continue to remain in business, continue to press on until such time as they're bought out, find another investor, or simply close the doors. The slightest negative word about this company whether true or simply utter nonsense hammers their stock price. Idiotic "orphan" remarks by any Airbus executive, or anyone for that matter, is not only uncalled for but simply unprofessional. These comments are made simply in recognition of the threat Bombardier poses to a very small but significant sector of the passenger aircraft market. That in itself must be a compliment.
The safe bet is to predict this company will fail. A good bet is that they will be taken over. But the bet rarely offered is on their survival. I'm not so sure they're as doomed as some think. They might be, we'll see. For the C series isn't the only product this company sells and every time an aircraft sale is reported, it isn't the blow to Bombardier many seem to think it is. If it is, then it's a blow to whomever else doesn't get the sale, including Airbus, Boeing, Embraer, ATR, Mitsubishi, and Sukhoi. However, this point is rarely mentioned by the know-it-all smart alecs.
The fact they haven't sold a single C series in 18 months doesn't mean it's a bad aircraft or an unwanted aircraft. Nor does it mean there is no interest or market for it. This aircraft is going to sell. Of that I have no doubt.
Willie
No doubt Boeing, Bombardier, and others would love to have a monopoly, but alas, no such reality. Not even for a dominant player like Airbus.
Yes. Bombardier are building the C series in the face of extremely difficult markets, oil prices, competition, financial markets, you name it. But, they're likely to continue to remain in business, continue to press on until such time as they're bought out, find another investor, or simply close the doors. The slightest negative word about this company whether true or simply utter nonsense hammers their stock price. Idiotic "orphan" remarks by any Airbus executive, or anyone for that matter, is not only uncalled for but simply unprofessional. These comments are made simply in recognition of the threat Bombardier poses to a very small but significant sector of the passenger aircraft market. That in itself must be a compliment.
The safe bet is to predict this company will fail. A good bet is that they will be taken over. But the bet rarely offered is on their survival. I'm not so sure they're as doomed as some think. They might be, we'll see. For the C series isn't the only product this company sells and every time an aircraft sale is reported, it isn't the blow to Bombardier many seem to think it is. If it is, then it's a blow to whomever else doesn't get the sale, including Airbus, Boeing, Embraer, ATR, Mitsubishi, and Sukhoi. However, this point is rarely mentioned by the know-it-all smart alecs.
The fact they haven't sold a single C series in 18 months doesn't mean it's a bad aircraft or an unwanted aircraft. Nor does it mean there is no interest or market for it. This aircraft is going to sell. Of that I have no doubt.
Willie
Last edited by Willie Everlearn; 2nd Feb 2016 at 19:09.
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Idiotic "orphan" remarks by any Airbus executive, or anyone for that matter, is not only uncalled for but simply unprofessional. These comments are made simply in recognition of the threat Bombardier poses to a very small but significant sector of the passenger aircraft market. That in itself must be a compliment.
An "orphan" product will immediately lose resale value. If potential clients are concerned of this risk, then Bombardier must offer them residual value guarantees.
These guarantees represent liabilities to Bombardier and cost them money whether they are eventually exercised or not. It's very likely that Bombardier are being asked to provide significant monetary guarantees to potential CSeries customers.
Willie,
It's not a bad airplane, in fact, it is an amazingly good one, but it is an unwanted one. Proof: nobody bought has one one in 18 months and a business case for buying one in vanishingly small.
GF
It's not a bad airplane, in fact, it is an amazingly good one, but it is an unwanted one. Proof: nobody bought has one one in 18 months and a business case for buying one in vanishingly small.
GF
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The new engine technology on the C-Series is a huge advancement, it is a very nice plane, that if brought to the market earlier, could've gained traction over the MRJ and the new EMB. Now the MRJ has similar orders and will definitely have an advantage in the Asian market and EMB is still the front runner globally.
Past few years airlines have invested heavily in the 737 and a320, the market for regional jets will still be there to cater to routes that dont require 737/a320 capacities, but unfortunately everyone will get a piece of a small pie. My friend who works at Bombardier said they are basically selling the aircraft at or below cost. Now, before i jump ahead, i am aware that every manufacturer does this because the money is not the in the retail price, but the supply chain profits earned over the life of each aircraft.
When you have Airbus and Boeing selling hundreds to just one airline, they will break even due to volume - you can't say the same for Bombardier. This is their first non-rear mounted airplane fitted with brand new engine technology. It has had a ton of R&D pumped into it, without orders it will take years at this order rate for them to realize profits.
In my opinion, while Bombardier was pushing the market for CRJ's and EMB their EJets, they should've began the C-Series project then, instead they waited too long (filed lawsuits against EMB over unfair competition lol). I am glad not to be a Quebec resident
Past few years airlines have invested heavily in the 737 and a320, the market for regional jets will still be there to cater to routes that dont require 737/a320 capacities, but unfortunately everyone will get a piece of a small pie. My friend who works at Bombardier said they are basically selling the aircraft at or below cost. Now, before i jump ahead, i am aware that every manufacturer does this because the money is not the in the retail price, but the supply chain profits earned over the life of each aircraft.
When you have Airbus and Boeing selling hundreds to just one airline, they will break even due to volume - you can't say the same for Bombardier. This is their first non-rear mounted airplane fitted with brand new engine technology. It has had a ton of R&D pumped into it, without orders it will take years at this order rate for them to realize profits.
In my opinion, while Bombardier was pushing the market for CRJ's and EMB their EJets, they should've began the C-Series project then, instead they waited too long (filed lawsuits against EMB over unfair competition lol). I am glad not to be a Quebec resident
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The fact they haven't sold a single C series in 18 months doesn't mean it's..... an unwanted aircraft.
Really??? That sounds like a pretty good definition of 'unwanted' to most of us!
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Some interesting points posted above.
Boeing stock down 17% over the year despite impressive sales figures.
Airbus stock down 13% over the year despite impressive sales figures.
Regional Airlines (in the U.S.) are being reduced by their mainline partners.
Legacy carriers are starting to adjust regional flying and some have included the CS100/300 in mainline pilot union contracts. (Which has to mean something.)
MRJ is out of scope, three years late and are likely to run into a similar sales drought as Bombardier.
Bombardier has been quietly exiting the RJ market leaving much of it to Embraer and others.
Neo is having engine problems.
Oil prices are not likely to rise for some time to come.
Pilot shortages are becoming the reality many continue to disbelieve.
The airline industry and the way they conduct business is changing dramatically. Which is why that future industry will include C series.
To declare Bombardier's C series a loser based on the status quo is simply idiotic because sales will come as the industry deals with and readjusts to the many and varied realities of today.
Willie
Boeing stock down 17% over the year despite impressive sales figures.
Airbus stock down 13% over the year despite impressive sales figures.
Regional Airlines (in the U.S.) are being reduced by their mainline partners.
Legacy carriers are starting to adjust regional flying and some have included the CS100/300 in mainline pilot union contracts. (Which has to mean something.)
MRJ is out of scope, three years late and are likely to run into a similar sales drought as Bombardier.
Bombardier has been quietly exiting the RJ market leaving much of it to Embraer and others.
Neo is having engine problems.
Oil prices are not likely to rise for some time to come.
Pilot shortages are becoming the reality many continue to disbelieve.
The airline industry and the way they conduct business is changing dramatically. Which is why that future industry will include C series.
To declare Bombardier's C series a loser based on the status quo is simply idiotic because sales will come as the industry deals with and readjusts to the many and varied realities of today.
Willie
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Funny Willie.
I recognize that same sentiment when some years ago a colleague of mine -- noting the rapid growth of the Internet -- proclaimed that "the telecom industry is changing dramatically. Which is why that future industry will include Nortel". After all, Nortel had "game changing" optical gear.
Nortel of course went bust within a year.
Yes, the aviation business is changing, as it always has. No, that does NOT mean the CSeries must be part of it!
In fact, unless there is a drastic change in business model, the mid-market for the next 15 years may be well served by E2, Neo, and MAX variants. If so, the CSeries will be a niche player at best.
Bombardier is still hoping to sell 3,500 CS100 and CS300s over the next 25 years. Possible? Sure, anything is possible. Really, I am not discounting this possibility.
But what's certain is that today, every aspect of Bombardier's aerospace business is under severe pressure. Other than the CSeries, the CRJ, Learjet, and Q400 programs are not exactly in great shape either. The upcoming reverse-split will keep them from getting delisted (in the short term) but their fundamentals are looking quite bleak at the moment. They are fighting for survival and may not emerge intact.
I recognize that same sentiment when some years ago a colleague of mine -- noting the rapid growth of the Internet -- proclaimed that "the telecom industry is changing dramatically. Which is why that future industry will include Nortel". After all, Nortel had "game changing" optical gear.
Nortel of course went bust within a year.
Yes, the aviation business is changing, as it always has. No, that does NOT mean the CSeries must be part of it!
In fact, unless there is a drastic change in business model, the mid-market for the next 15 years may be well served by E2, Neo, and MAX variants. If so, the CSeries will be a niche player at best.
Bombardier is still hoping to sell 3,500 CS100 and CS300s over the next 25 years. Possible? Sure, anything is possible. Really, I am not discounting this possibility.
But what's certain is that today, every aspect of Bombardier's aerospace business is under severe pressure. Other than the CSeries, the CRJ, Learjet, and Q400 programs are not exactly in great shape either. The upcoming reverse-split will keep them from getting delisted (in the short term) but their fundamentals are looking quite bleak at the moment. They are fighting for survival and may not emerge intact.
Willie, most of Boeing's stock drop has been in the last month - after Boeing announced a big write-down on the 747-8 program, along with a general stock market slump. It spent most of 2015 near it's record high. There could be some unpleasant surprises in flight test, but so far the Max program is ahead of schedule. Contrast that with Bombardier which recently became a "penny stock".
This doesn't exactly paint a rosy picture for the future either:
Why Bombardier Is Struggling to Build Bigger Planes - Bloomberg Business
This doesn't exactly paint a rosy picture for the future either:
Why Bombardier Is Struggling to Build Bigger Planes - Bloomberg Business
Nearly a decade in, the C Series program has yet to gain traction and the company is in tatters. Bombardier is a penny stock, it’s burning cash and has gone cap in hand to the Canadian government for as much as $1 billion in aid to stay afloat. At stake is the survival of a 73-year-old plane and train maker that employs 24,000 people in Canada and contributes C$6.5 billion ($4.7 billion) to the Quebec economy alone.
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peekay4
A negative stock split is a very bad sign.
As a holder of too much of this stock, I'm fuct.
I have to concede, this Titanic Canadian Aerospace company has just hit an iceberg.
In fact, Nortel was brought up in a conversation over dinner.
Dark days ahead for sure.
Willie
A negative stock split is a very bad sign.
As a holder of too much of this stock, I'm fuct.
I have to concede, this Titanic Canadian Aerospace company has just hit an iceberg.
In fact, Nortel was brought up in a conversation over dinner.
Dark days ahead for sure.
Willie
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It's looking unavoidable now. BBD.B dropped another 8% today to 80 cents, down 20% just from last week.
At 80 cents, each penny of movement is 1.25% of the share price. It's potentially oversold but there's only 16 business days left for them to recover above $1 (thanks to the leap year).
I'm thinking a 20:1 reverse-split would be the minimum, to bring back the share price well above $10. Plus the controlling family needs to go.
Of course in theory reverse-splits don't change valuation but I think many mutual funds, etc., still holding BBD.B may finally exit the share, putting further downward pressure in the short term.
Little consolation but Nortel managed to survive for many years after hitting penny stock status, through several reverse-splits and accounting scandals. A lot can still happen either way.
A complete turnaround to former glories from this point would be historic.
At 80 cents, each penny of movement is 1.25% of the share price. It's potentially oversold but there's only 16 business days left for them to recover above $1 (thanks to the leap year).
I'm thinking a 20:1 reverse-split would be the minimum, to bring back the share price well above $10. Plus the controlling family needs to go.
Of course in theory reverse-splits don't change valuation but I think many mutual funds, etc., still holding BBD.B may finally exit the share, putting further downward pressure in the short term.
Little consolation but Nortel managed to survive for many years after hitting penny stock status, through several reverse-splits and accounting scandals. A lot can still happen either way.
A complete turnaround to former glories from this point would be historic.