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Bombardier gets another handout...

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Bombardier gets another handout...

Old 7th Feb 2017, 22:43
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Bombardier gets another handout...

https://www.thestar.com/business/201...-montreal.html
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Old 8th Feb 2017, 01:35
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I sure hope this is better for the Canadian economy than it appears to me. I suppose it has to be a trust thing, but I still trust the pilot half my age, and a quarter of my flying time, when I'm buckled into 17A, than I trust the federal government economics thinkers on this deal....
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Old 8th Feb 2017, 18:33
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Sadly, your trust is misplaced...

The reason that this bailout (for that is what it is) is termed a 'loan' is that it enables Bombardier to continue suckling at the public teat without diluting shareholder (read: family) equity.

Any normal business would approach its commercial lenders for support and / or offer additional shares in itself. The fact that Bombardier is unable to do either tells you everything you need to know about the tragic financial state of this white elephant.

The real tragedy is the Government of Quebec is already on the hook for its earlier stakes, as are all those poor schmucks who thought their QC pension contributions were professionally invested and safe; they too will all disappear when this monster finally dies. And die it will.

Ultimately, of course, it will be the Canadian taxpayers who will be left to clean up the mess the charlatans have created. Of course, the perpetrators will mostly be retired on protected Federal pensions by then.
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Old 8th Feb 2017, 19:01
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Yes, I among many others could see this coming. Embrauer has already filed WTO protests, lawyers will clean up as usual. Having Sheila Fraser (ex govt. auditor & lifelong Liberal party member) on the board speaks louder than all the other clues combined.
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Old 8th Feb 2017, 21:41
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This is the second nail in the Liberal's coffin this week (the other being Trudeau's reversal on election reform). If he continues to insult the voters (western Canada especially) the next election may see the Libs shut out of ridings west of Ontario. And it would serve them right...

PS: Grizzz: You chose a PPRuNe handle very similar to mine when you joined up. And it seems by your location that we may both be closely associated somehow with YVR


Last edited by grizzled; 8th Feb 2017 at 23:34.
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Old 9th Feb 2017, 15:40
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@Grizzled, yes on all accounts. Arms length association with YVR, firm I'm a partner in has done many contracts with YVR. Actually I'm the son of a lifelong, departed aviator, one of the old guard from the old south terminal crew.

Trudeau has also managed to alienate many on the right coast who also helped him achieve his current post. Only 3 more years til his next crop of lies is tested by the electorate.
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Old 9th Feb 2017, 16:29
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Grizzz

Check your PMs
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Old 15th Feb 2017, 23:56
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"If you do not take an interest in the affairs of your government, then you are doomed to live under the rule of fools." - Plato

Shiela Fraser? How about a shout out for Daniel Johnson?
What about the senseless waste of tax payer money on things like climate change/global warming? Think we get a return on that nonsense?
Then there's Mirabel airport?
These fools will continue to spend tax dollars wherever they deem worthy. Taxpayers will never have a say. Financial contributors will, party supporters will and it has always been thus, at least in my 65 year experience. I doubt it will ever change. So not much new in this thread I'm afraid.
I choose Bombardier over green house gases as I await my dreaded T4 and Releve.

The Liberals are sinking fast in the polls in Quebec, both provincially and federally. I don't think it matters what they do with their support for Bombardier.

Willie
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Old 17th Feb 2017, 09:05
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Canada federal government said

Canada federal government to grant $372.5 million loan to Bombardier - The Economic Times

Innovation and economic developmen Minister Navdeep Bains said 'i believe Bombardier is indeed back the money will secure thousands of high-paying
technology jobs in Ontario where the Global will be assembled.
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Old 21st Feb 2017, 19:33
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Bombardier Loan A Smart Investment In Canada's Future

The federal government's announcement that it will provide $372.5 million to Bombardier in repayable loans is good news, and a smart investment in the future of this country and its people.

Criticisms of the deal are not only short-sighted, but just plain wrong.

The fact is, Canada needs to invest in aerospace if it wants to be a player in that industry -- an industry that provides good jobs across the country and is the basis of much of the research and development work done in Canada.

To say that Bombardier should be allowed to "crash and burn," as some have, is not only heartless for the thousands of workers and their families who would be left in desperate straits as a result, it is bad economic policy.

It is important to remember that Bombardier is one of Canada's largest employers with more than 24,000 workers across Canada -- and those jobs create another 40,800 jobs at and by the suppliers used by Bombardier, as well as through the spending of its well-paid workers.

The real job growth begins as production jobs are created to meet demand for the airliner.
Bombardier is also a world leader in research and innovation. Much of the money announced last week will go to the Global 7000 business aircraft program, scheduled to go into commercial service next year. The rest would go to the CSeries passenger jet, an innovative Bombardier aircraft that marks a major advance in aviation technology worldwide.

Bombardier's first entrance in the lucrative single-aisle commercial aircraft segment -- the CSeries -- puts it in the same market as the Boeing 737 and Airbus 319. The CSeries is an innovative airliner that uses 20 per cent less fuel than comparable jets. Supporting its development not only helps spur research in this country and create good jobs, but it contributes to developing a green economy.

With the CSeries now moving from design to production, the real job growth begins as production jobs are created to meet demand for the airliner, both at Bombardier and at suppliers across Canada.

Just getting to this stage has involved more than 200 suppliers in the CSeries project, creating jobs right across the country.

It's not just me saying this.

Karl Moore at McGill University's Desautels Faculty of Management told the CBC that "If you want to play in the big leagues in this industry -- different than many other industries -- you need government support." He said that the federal government's investment and earlier investments by the Quebec government are "what's necessary and appropriate in this particular industry."

A complaint from Brazil to the World Trade Organization over the federal loan is more bravado that substance. We need to remember that the Brazilian government provides preferential loans to Embraer, its country's airliner producer, as well as infrastructure concessions and defence contracts. It even holds a small stake in the company.

Brazil, like other jurisdictions with significant aerospace sectors, makes such investments for the same reason Canada announced its loan to Bombardier last week: it's a good investment in the future of the country and its economy.

Developing a new aircraft takes years and years of research and development. During that time, money flows out of the company and into the rest of the economy at a rapid rate. While that can be good for the suppliers and subcontractors getting some of that money, it can be a real drain on the company itself.

The work is necessary, however, if aerospace companies are going to continue to develop the products that will keep them competitive in the market, and creating jobs here at home. Investments such as last week's loan are meant to help companies such as Bombardier get over those humps.

It is beyond me how anyone could consider a repayable loan of $372.5 million anything but a great investment.
Once a new airliner is developed and put into production, it can create good jobs for decades as new jets keep rolling off the production line. It is then that we see the real return on the investment.

Consider that in 2015, the total taxes collected as a result of Bombardier operations were $1.6 billion, including business and property taxes, pay-roll contributions, social charges and income taxes paid by employees.

As well, Bombardier's operations accounted for 0.7 per cent of Canada's Gross Domestic product, or $12.4 billion, and the aerospace sector as a whole accounted for 10 per cent of all research and development spending in Canada in 2015.

With numbers like that, it is beyond me how anyone could consider a repayable loan of $372.5 million anything but a great investment.

HuffIngton Post Canada

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Old 21st Feb 2017, 21:17
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For a differing view here's an excerpt from an investment advising service:

"Last year around this time, Bombardier, Inc. stock was languishing around $1; its business was in complete disarray with a potential bankruptcy in its future, its CSeries jets failed to attract new orders, and the train business couldnít deliver a quality product on time if its life depended on it.

Fast forward to today, and Bombardier stock is up a whopping 117.5% over the past 52 weeks ó an indication that the worst may be over for the maker of planes and trains.

Fool.ca contributor Andrew Walker recently discussed whether or not Bombardierís latest rally is sustainable; in the 10 days since the article appeared, its stock has basically gone sideways, suggesting investors might be coming to their senses. Furthermore, with NAFTA looking more and more like itís going to be torn down and rebuilt, Bombardierís position in the world is anything but certain, especially if it continues to over promise and under deliver with customers.

I have never been a fan of Bombardierís because its financial reports are filled with way too many footnotes that the average investor likely doesnít understand and the fact that it relies far too much on corporate welfare from various levels of government to remain competitive. Itís a lethal combo.

Yet you canít ignore a $31 billion backlog ó can you?

But thatís Bombardierís game. Keep pushing the ball farther down the road while preaching the same old ďthings are getting betterĒ speech, and retail investors will continue to blindly follow it."


Re the Feds loaning (Canadian taxpayer's) money to the company: Whether Bombardier is or is not a potentially good investment is an entirely different question than whether I want public funds (my money) to support the company. I for one certainly do not.
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Old 23rd Feb 2017, 02:11
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Can't help having flashbacks to the '70s when the UK & French governments had to keep funding Concorde even though it looked more & more that no other orders would be forthcoming. Their ultimate concern was not supporting the program per se but keeping the local economies in both Bristol and Toulouse going. A number used was that every Pound or Franc got circulated nearly three times before, of course, ending back in the Government coffers as taxes.
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Old 3rd Mar 2017, 19:41
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er340790

Don't think for a minute Bombardier are crying at any trough. Posting quotes like yours only shows how little you understand the role of companies like Bombardier play in the overall Canadian economy and aerospace industry.

But hey, whatever floats yer boat.

Willie
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Old 7th Mar 2017, 20:06
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Will the Mitsubishi Regional Jet effect the sales of Canadair/Bombardier's Regional Jet? Is this a separate thread?
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Old 7th Mar 2017, 20:52
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Probably not, it has a significant "scope clause" problem in the main market--the US. The MRJ cannot be light enough to be a contender.

GF
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Old 7th Mar 2017, 22:37
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MRJ is already affecting sales:

1. Scope clause is primarily for US regionals only. Around 100 of MRJ's orders are from outside of the US. That's 100 sales to a segment previously dominated by the CRJ.

2. Even in the US, SkyWest and TSA have ordered 150 MRJs instead of CRJs. And they are still holding on to those orders -- hoping for scope changes -- so effectively they are lost sales to Bombardier.

Unless (and until) Bombardier has an appetite to re-engine the CRJ, the RJ market segment will get dominated by E2 and MRJ in the future.
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Old 8th Mar 2017, 01:46
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Barring another 9/11 event, score Will. Not. Change. ALPA won't give in this one outside of bankruptcy style contracts. SKW and TSA cannot fly those MRJs AND retain their contracts with their mainline carriers. Even BBD said that about scope in their annual report.

Re-enginning the CRJ has some significant challenges, especially as new high-compression designs are heavier than the CF-34 derivatives--a difficult problem for an aft mounted design.

GF
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Old 8th Mar 2017, 03:15
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Galaxy,
Not sure there is any need to re-engine any of the CRJs even the 100/200 Series have pretty good numbers especially given their low current acquisition cost. Even if no more were built, there should be a significant aftermarket Sales & Service typically equivalent to the original (not secondhand) sales price.
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Old 8th Mar 2017, 08:36
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It doesn't matter if scope clauses will eventually change or not. Skywest and TSA have recently re-affirmed their positions in the MRJ90, in addition to their E2 orders. That means they will not be ordering CRJs any time soon == effective lost sales for Bombardier.

And by the way, Bombardier is floating the CRJ re-engine concept:

Bombardier looks at upgrade for regional jets

Thursday, January 26, 2017

MONTREAL -- Bombardier Inc. is weighing options for a new engine on its regional jets in a move that could give its commercial aircraft lineup a boost until its flagship C Series starts making money, people familiar with the matter said.

The plane maker is analyzing how it can update its family of Canadair Regional Jets to make them more enticing for airline customers in the years ahead, according to the people, who asked not to be named because they aren't authorized to speak publicly about the review. In the absence of funds for an all-new, clean-sheet design for a regional jet, the company is exploring a big overhaul of its existing 60- to 100-seat CRJ planes centred on new engines, the people said.

"[Bombardier has] to do something" with the CRJ aircraft, said Richard Aboulafia of aerospace consultancy Teal Group. "The idea of using an eighties vintage engine in the next century when everyone else has adopted new technology, that's just a non-starter." ...
More from: Bombardier looking at options for revamp of regional jet, sources say | The Globe and Mail
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