Bombardier loses $4.9B US in 3rd quarter; Quebec to invest $1B US in CSeries program - Business - CBC News

Wow what a waste of taxpayers money, they better overhaul that corporate office! i also hear the TTC is suing Bombardier for millions:

TTC to sue Bombardier over delayed streetcars - Toronto - CBC News

Its unbelievable.

1 Billion won't be enough. An estimated loss of 3 Billion $ over the next 3 years is the number they need to cover.

Yeah, they must be lining up more financing. I believe they are still planning to sell parts of the rail division.

Also the first payment from Quebec won't be until April 2016. They will run out of cash by then if they don't get an additional investment. I hear they've approached the Federal government for bridge financing.

Any future earnings from the CSeries must now be split in half with Quebec. That already tight margin in Bombardier's business plan is now miniscule. They'll never come close to getting their money back... they've effectively doubled the number of planes they have to sell to regain their investment.

what does the moon care if the dogs bark at her ?
 

Bombardier Announces Financial Results for the Third Quarter Ended September 30, 2015
-Revenues of $4.1 billion; backlog of $61.8 billion
-Solid liquidity at $3.7 billion
-C Series flight testing 97% complete and certification imminent
-Recorded $3.2 billion charge for C Series program
-Cancellation of Learjet 85 aircraft program announced
-Management team strengthened with appointment of Nico Buchholz as Senior Vice President and Chief Procurement Officer

"Today, we are proud to announce that the government of Québec will invest $1 billion in the C Series aircraft program. This partnership comes at a pivotal time, with the C Series on the verge of certification. The market is there, our leadership is in place, we have the best product and with the support of the government, we are ready to make this aircraft a commercial success," Mr. Bellemare.

"we are ready to make this aircraft a commercial success" ahahahaa....a decade too late :D

Quebec to ask Ottawa to pitch in another $1 billion to Bombardier bailout

More from: Quebec to Seek Canada Match on $1 Billion CSeries Bailout - Bloomberg Business

No Porter Jets @YTZ. So mostlikely Porter will cancel their C-Series order 12 fix, 18 options)

http://m.metronews.ca/#/article/news...p-airport.html

http://www.theglobeandmail.com/repor...service=mobile

Sounds like a lot of incoming from World Trade Organization... Wait and see...

Slightly off-topic, but I'm curious as to how CL-215 and CL-415 used prices might react to the North Bay plant being shuttered...

No idea how many such aircraft remain in service - the very nature of their usage results in a pretty steady and high attrition rate - but something like 125 215s were built up to 1990 and 76 415s from 1993.

I believe Cascade Aerospace did some conversions to give us the CL-215T. Might be a niche market for some such outfit buy the production rights to the CL-415.

The CL-415 was perfected for its specialized role and, let's face it, those forest fires ain't gonna stop anytime soon.

Someone, somewhere... :ok:

Actually fire fighting planes tend to be extremely durable and last for a very long time. There are water bombers from the 1940s which are still in service today, 70+ years later.

As far as I know Bombardier had zero CL-415 pending orders before closing the factory. Zero! That gives an idea about the size of the market.

Plus there are alternatives from China, Japan, Russia, even from the US, for both amphibious and non-amphibious fire fighting planes of various sizes.

Probable the very next large order will have best concessions, but why to sell at a loss one of the finest aircraft in the air? Soon CSeries100 will be certified then production is ensured for 2-3 years, which is close to ideal ratio between enough backlog vs. delivery date.
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Because you can't selll them at a profit, that's why.

GF

Trudeau is quoted as saying that Bombardier will have to make a 'Strong Business Case' if the Feds are to match the QC-bailoutxxxx, buy-in sorry, with another C$1-Bn.

Is that just his hopey, changey doublespeak for something on paper to justify more corporate welfare??? Or will they actually do something concrete to tackle the unacceptable dual-class shareholding structure that leaves the same family powerbase intact with yet more handouts?

On va voir. :ugh:

It's a BS statement for public consumption. There is no way Trudeau won't fund Bombardier after that kind of statement.

If the Ottawa doesn't fund Bombardier now, that would signal to the market that Bombardier does not have a "strong business case" for the CSeries, which would effectively kill the program.

There is about zero chance Trudeau wants to be seen as someone who killed the CSeries, given thousands of union jobs at stake.

So Ottawa will be funding Bombardier regardless of any business case. The questions now are how much and in what form? (e.g., direct investment, loan, loan guarantees, tax credits, etc.) The answers to those questions will also determine if any governance changes will happen.

To placate the critics, they may also wait for some "good news" (e.g., a sizable order or maybe the upcoming CS100 certification) to time any funding announcement.

Oh the perils of marketing, global economics, fuel prices and timing....

...Ditch the four turbo-jets for two high by-pass turbo-fans, add some leading edge slats, spoilers and a glass cockpit, and we have got a world-class RJ!
http://i1047.photobucket.com/albums/...O_JetLiner.jpg

IT IS JUST THAT EASY. NOT.

Update
 

The Canadian Press

MONTREAL - Bombardier Inc. (TSX:BBD.B) has signed a deal that will see the Caisse de depot et placement du Quebec invest US$1.5 billion in the company for a stake in its rail business.

Under the agreement, the Caisse will receive shares that will be convertible into a 30 per cent stake in a newly created holding company for Bombardier Transportation.

Bombardier says the deal concludes its review of options for Bombardier Transportation, which sells subway cars and other mass transit systems.

"This investment by CDPQ, which has a long history as one of our major investors, is a testimonial to the growth potential of the rail industry and to Bombardier's leadership in seizing the opportunities this market offers on a global scale," Bombardier chief executive Alain Bellemare said in a statement.

"Bombardier and CDPQ have one common objective: leveraging Bombardier Transportation's innovative portfolio of products and services, engineering talent and worldwide presence to drive margin expansion."

Bombardier has been struggling to complete development of its new CSeries passenger jet which is over budget and behind schedule.

Last month, the Quebec government agreed to give Bombardier US$1 billion to help complete development of the CSeries in exchange for a 49.5 per cent stake in that project.

The investment announced Thursday includes terms that give the Caisse a minimum return of 9.5 per cent as well as provisions tied to the performance of Bombardier Transportation.

"The strong performance incentives that are at the heart of this transaction and management's plan to improve execution have a single focus: creating more value at Bombardier Transportation," Caisse chief executive Michael Sabia said in a statement.

If the business does better than its plan, the Caisse's stake on conversion of its shares decreases by 2.5 per cent per year, down to a minimum of 25 per cent. The convertible shares' minimum return also falls from 9.5 per cent to a floor of 7.5 per cent.

However, if Bombardier Transportation underperforms the Caisse's stake on conversion of its shares will increase by 2.5 per cent per year, up to a maximum of 42.5 per cent. The convertible shares' minimum return would increase up to 12 per cent under those circumstances.

The deal values the rail business at $5 billion.

The new holding company will be governed independently by a new board to be composed of seven members, three of which will be named by the Caisse.

Bellemare will be chairman and Bombardier Transportation president Lutz Bertling will continue in his current role

That gives some perspective to the $4.9 billion loss Bombardier posted this past quarter due to the Aerospace division writedowns.

The CSeries essentially wiped out an equivalent to the entire value of Bombardier's most valuable business.

BBD.B stock now in negative territory after a short-lived rally this morning.

[QUOTE=peekay4;9178807
So Ottawa will be funding Bombardier regardless of any business case. The questions now are how much and in what form? (e.g., direct investment, loan, loan guarantees, tax credits, etc.) The answers to those questions will also determine if any governance changes will happen.

To placate the critics, they may also wait for some "good news" (e.g., a sizable order or maybe the upcoming CS100 certification) to time any funding announcement.[/QUOTE]

Any concerns for the issue of illegal subsidies to be raised by Embraer and/or Sukhoi or Mitsubishi?

Yes, it is a concern, but governments are allowed to invest in companies, or to provide other forms of funding (such as some of those mentioned above).

The question is whether or not such funding is at "fair market value".

E.g., to keep things simple, let's assume Bombardier invested about $5 billion into the CSeries, then wrote down a $3 billion loss, implying the program's remaining value to be around $2 billion. Then Quebec's $1 billion investment into the program for 49.5% share does not seem out of line, and might not be considered an illegal subsidy.

Or, suppose the Canadian government agrees to provide $500 million in loan guarantees to Bombardier customers. That in itself is allowed, if the terms & conditions are reasonably in line with market benchmarks. However if the loan interest rate is far below market rate, for example, then there is a net benefit to Bombardier which may be considered an illegal subsidy.

And in today's news ...

Well, isn't that nice. They take a billion in government money, then without missing a step start offshoring jobs.