Guest Posted March 14, 2016 Share Posted March 14, 2016 Perhaps another good reason to be carefull in investing our tax payer dollars. Quote Bombardier Inc slammed by London for ‘shameful’ Tube project: ‘Nothing short of a disaster’ Today, March 14, 2016, 22 minutes ago | Kristine Owram London’s city council has lambasted Bombardier Inc. for “duping” the British capital into awarding it a train-signalling contract that it was incapable of delivering, creating “nothing short of a disaster” for the London Underground. The scathing report, prepared by the London Assembly’s Budget & Performance Committee, doesn’t mince words in its criticism of Bombardier and Transport for London (TfL), the government body that awarded the contract. London Mayor Boris Johnson also didn’t equivocate, telling the committee that Bombardier “totally stuffed it up.” In June 2011, Bombardier’s transportation division was awarded a contract to upgrade the London Underground’s automatic train control, or signalling system. The company said it could do the job by 2018 for 354 million pounds (about $670 million) but it quickly became apparent that it wouldn’t be able to deliver on time or on budget, according to the report, which calls Bombardier’s performance “shameful.” As a result, the contract was cancelled in December 2013, costing the city 85 million pounds. The contract was re-awarded to Thales SA, a French transportation company, but will now be delivered five years late and cost 886 million pounds more than originally planned. “TfL has accused Bombardier of more than incompetence,” the report says. “Bombardier’s inability to deliver the programme will be hugely damaging to its reputation as a world-class signalling supply company, but even more damaging are claims of misrepresentation. TfL believes it was duped by Bombardier from the outset about its expertise and experience.” Related United Airlines orders 25 more Boeing jets, dashing Bombardier Inc’s hopes again Bombardier Inc rejects Toronto Transit Commission request for public explanation of streetcar delays Toronto Transit Commission threatens to sue Bombardier Inc over latest streetcar delay As a result of the delay, TfL estimates that there will be 11 million fewer Underground journeys per year, costing it 271 million pounds in lost fares. The delay will affect the busy District, Circle, Metropolitan and Hammersmith & City lines, which make up nearly 40 per cent of London’s Tube network and carry approximately 1.3 million passengers per day. Bombardier spokesman Marc Laforge declined to comment on the report’s conclusions, but said the contract was ended “jointly and amicably.” “We had completed significant design work but there have been several lengthy discussions during the design phase due to the increased complexity of the project,” Laforge said in an email. “Though we do not agree with the judgements made in the report, we continue to have amicable relations with UK customers, building on a long and successful history of cooperation and a significant presence in the UK market.” ANDREW DRYSDALE / REX FEATURESAs a result of the delay, TfL estimates that there will be 11 million fewer Underground journeys per year, costing it 271 million pounds in lost fares. Bombardier doesn’t break out its results by country, but Europe accounted for $5.3 billion or 64 per cent of its transportation revenue in 2015. London’s damning report comes as the Toronto Transit Commission (TTC) continues to wrangle with Bombardier over a $1.2-billion contract for 204 new streetcars. Only 16 of those streetcars have been delivered even though the original timeline planned to have 67 on the road by last October. The company has blamed “production issues” and has added a third shift to its plant in Thunder Bay, Ont., to speed up production. ANDREW COWIE/AFP/Getty ImagesLondon’s damning report comes as the Toronto Transit Commission (TTC) continues to wrangle with Bombardier over a $1.2-billion contract for 204 new streetcars. An audit conducted by KPMG into the London Underground agreement found that Bombardier won the contract by “significantly underbidding” its competitors on price. “Bombardier was offering a lot more and for a lot less,” the report says. “Its price was substantially lower, its final delivery date was 21 months earlier, it would deliver 32 instead of 31 trains per hour and, unlike its competition, it could do all the work with zero line closures.” However, KPMG found that TfL failed to investigate Bombardier’s ability to deliver on its promises. “If something sounds too good to be true, it probably is,” the report concludes. http://business.financialpost.com/news/transportation/bombardier-inc-slammed-by-london-for-shameful-tube-project-nothing-short-of-a-disaster Link to comment Share on other sites More sharing options...
Fido Posted March 14, 2016 Share Posted March 14, 2016 Makes people in Edmonton wonder why the city just approved a contract to build the next LRT line that included Bombardier cars. Link to comment Share on other sites More sharing options...
rudder Posted March 14, 2016 Share Posted March 14, 2016 http://ca.reuters.com/article/businessNews/idCAKCN0SM2WT20151028 Toronto city council to sue BBD for non-performance. Link to comment Share on other sites More sharing options...
mrlupin Posted March 15, 2016 Share Posted March 15, 2016 I'm not much of a Bombardier fan but these sort of large projects are routinely problematic. I'm sure you can find similar problems with Alstom or Siemens. Linking them with the Cseries is a bit of an apples to oranges comparison. If you want similar companies to Bombardier siphoning money from the public purse you do not have to look very far. From Boeing (KC46): http://aviationweek.com/defense/boeing-s-tanker-cost-overruns-exceed-1-billion Lockheed (the beloved F35 Harper wanted us to buy): http://www.globalresearch.ca/lockheed-martins-f-35-lightning-ii-boondoggle-a-2-trillion-pentagon-waste/5504849 Airbus (A400M): http://static.reuters.com/resources/media/editorial/20100608/A400M.pdf At least with Bombardier we are keeping expertise in the country, we have engineers designing, we are building things, manufacturing,testing etc. There's more to an economy than just pumping oil out of the ground... If the feds can play their cards right and take control away from the Beaudoin family, maybe Bombardier can be set right yet... Since I'm pointing out companies siphoning public funds, why not include the good old oil sands( most industries do it.. (mostly via tax breaks)): http://www.pembina.org/reports/fossil-fuel-subsidies.pdf I can understand some of the frustration over Bombardier, they aren't exactly exemplar in the way they do things (we in Montreal are overpaying for our new metrocars who were awarded to BBD without tender so I feel for the YYZ issue) but our politicians get to write these huge contracts. That might be the part of these transactions that needs revisiting regardless of which party announces the contract. Link to comment Share on other sites More sharing options...
Super 80 Posted March 15, 2016 Share Posted March 15, 2016 4 hours ago, Fido said: Makes people in Edmonton wonder why the city just approved a contract to build the next LRT line that included Bombardier cars. In fairness to Edmonton LRT cars that either can't move or can't be delivered and therefore can't block traffic would be an improvement on the status quo. Link to comment Share on other sites More sharing options...
Fido Posted March 15, 2016 Share Posted March 15, 2016 22 minutes ago, Super 80 said: In fairness to Edmonton LRT cars that either can't move or can't be delivered and therefore can't block traffic would be an improvement on the status quo. What? You don't like waiting for 15 minutes at a crossing just to get across. Link to comment Share on other sites More sharing options...
rudder Posted March 19, 2016 Share Posted March 19, 2016 http://news.nationalpost.com/full-comment/rex-murphy-bombardier-gets-lots-of-love-from-ottawa-while-the-fuel-powering-its-planes-gets-vilified Link to comment Share on other sites More sharing options...
Lakelad Posted March 21, 2016 Share Posted March 21, 2016 . Bombardier still aims to outsource jobs as it seeks bailout from Ottawa Mon Mar. 21, 2016 - The Globe and Mail Nicolas Van Praet and Greg Keenan Bombardier Inc. is pushing to shift major chunks of work on its Toronto-built Q400 turboprop planes to Mexico and China, even as it seeks a billion-dollar bailout from Canadian taxpayers. The transportation giant’s proposal to shift assembly of wings and cockpits for the turboprop planes to facilities in Mexico and China, respectively, would eliminate about 200 jobs at the suburban Toronto factory where those components are assembled now, sources familiar with the situation say. A proposal by the company to outsource wing and cockpit production was rejected by workers at the Toronto plant in October, but Bombardier has not given up on the idea. “They are still determined to offload the wing and the cockpit to Mexico and China,” said one source familiar with the discussions. Such a move could prove hugely awkward for the federal government, which is studying a request by Bombardier for a $1-billion (U.S.) investment in its C Series plane program to match a deal struck with Quebec. The company is trying to shore up more financial resources for the new aircraft to take it to projected break-even in 2020-21. It plans to build between 15 and 20 C Series planes this year. Bombardier wants Ottawa to come on board as a strategic partner in the C Series, and has found itself at the centre of a heated national debate on the merits of receiving public money. At the same time, it is trying to cut costs in many areas of its operations, which will help it rebuild earnings after two straight annual losses. “Of course it looks bad,” Link to comment Share on other sites More sharing options...
rudder Posted March 21, 2016 Share Posted March 21, 2016 Quite a PR game being played by both sides. Even the Liberals may be trying to 'compartmentalize' any aid as C-series specific. That would be a mistake. When the auto companies were bailed out, was it just for specific models? No. This is a time of reckoning for BBD and the Beaudoin family. It is not like there are not or have not been other direct and indirect subsidies provided by the Feds. This is different. They have the beggar bowl out. The private equity market has turned its back on BBD (for valid reason). The Feds should demand a share of BBD in exchange for any cash provided. How BBD decides to use that cash is up to the BOD, which should also be reconstituted. Obviously liquidity is the immediate concern. And BBD could buy back the stake in the future if they so decide. Hopefully at a profit to the Canadian taxpayer. Supporting public companies with direct cash is not an investment in infrastructure. It is a bailout. Bailouts come with conditions and premiums. Link to comment Share on other sites More sharing options...
DEFCON Posted March 21, 2016 Share Posted March 21, 2016 Reports like this sicken me. It appears that Bombardier is just another corporate loser standing hat in hand before government claiming it's too big and important to Canada to fail, but to ensure shareholders are secure in their investment, BBD tells us they need to build their products elsewhere, Canadian workers be damned. Why aren't Mexico and China stepping up to the plate to pick up their fair share of the cost of reinvestment in BBD in return for the work they obviously want? Link to comment Share on other sites More sharing options...
Boney Posted March 21, 2016 Share Posted March 21, 2016 If Canadians are bailing them out, then jobs remain in Canada, else let the markets decide your fate. Link to comment Share on other sites More sharing options...
rudder Posted March 21, 2016 Share Posted March 21, 2016 Imagine if Chrysler Canada or Ford Canada had said "we want your taxpayer money but we will also be moving some of our vehicle production lines to the US and Mexico"........ Is BBD really that out of touch with reality? Once again - huge mistake to allow BBD to attempt to compartmentalize the aid discussion as "C-series only". I looked - there is no such thing as C-series stock on the TSX. Link to comment Share on other sites More sharing options...
boestar Posted March 21, 2016 Share Posted March 21, 2016 I believe the idea was to becoming a "risk sharing" partner in the C-Series much like Shorts Brothers or Pratt & Witney. They would have a stake in the success or failure of the endeavour. My understanding is that this is what the Quebec Government has done. Link to comment Share on other sites More sharing options...
rudder Posted March 21, 2016 Share Posted March 21, 2016 26 minutes ago, boestar said: I believe the idea was to becoming a "risk sharing" partner in the C-Series much like Shorts Brothers or Pratt & Witney. They would have a stake in the success or failure of the endeavour. My understanding is that this is what the Quebec Government has done. Just because that is what the QC government has done does not mean that it is either reasonable or appropriate for the Feds to spend their tax dollars similarly. QC also offers huge tax breaks to BBD (and others) to maintain their manufacturing presence in La Belle Provence. Financially speaking, QC is the Greece of Canada. "risk sharing" is something that private companies do. Not governments using taxpayer dollars. The auto bailout initiative was to support a going concern with a demonstrated successful product that required short term liquidity support due to temporary dramatic drop off in historical demand. It had nothing to do with 'risk sharing". Whether the C-series will ever be a commercial success is yet to be determined. And if not, then what? The government needs to diversify its potential negative exposure by demanding a stake in BBD. The C-series may fail, but there is break-up value in BBD that will repay the government in full for its investment. http://www.theglobeandmail.com/report-on-business/international-business/asian-pacific-business/bombardiers-new-jet-receives-no-interest-from-asian-buyers/article29306176/ Link to comment Share on other sites More sharing options...
rudder Posted March 21, 2016 Share Posted March 21, 2016 Spin - spin - spin http://www.theglobeandmail.com/report-on-business/bombardier-defends-outsourcing-plan-amid-bailout-request/article29313530/ Link to comment Share on other sites More sharing options...
Guest Posted March 21, 2016 Share Posted March 21, 2016 3 hours ago, rudder said: Imagine if Chrysler Canada or Ford Canada had said "we want your taxpayer money but we will also be moving some of our vehicle production lines to the US and Mexico"........ Is BBD really that out of touch with reality? Once again - huge mistake to allow BBD to attempt to compartmentalize the aid discussion as "C-series only". I looked - there is no such thing as C-series stock on the TSX. I guess the difference is that Bomardier is being up front unlike some of those in the automotive industry who took what ever monies they were offered and then moved some of their production south. Link to comment Share on other sites More sharing options...
conehead Posted March 21, 2016 Share Posted March 21, 2016 3 hours ago, rudder said: Imagine if Chrysler Canada or Ford Canada had said "we want your taxpayer money but we will also be moving some of our vehicle production lines to the US and Mexico"........ Just to clarify, I don't believe Ford took any of the government bailout money at that time. Link to comment Share on other sites More sharing options...
Lakelad Posted March 21, 2016 Share Posted March 21, 2016 . Quote "The Liberals are so concerned with keeping information about a Bombardier bailout from Canadians that they are outsourcing the analysis to an American company. This is consistent with the Liberals' vote against transparency at Industry Committee and their continued blockade of information regarding the bailout." 'Ottawa taps U.S. firm to evaluate Bombardier aid package ' Link to comment Share on other sites More sharing options...
mrlupin Posted March 22, 2016 Share Posted March 22, 2016 Maybe that way removing controlling interests from the Beaudoin family will be easier? If it's recommended from an outside, credible source it could deflects blame from a future uncertain outcome. Link to comment Share on other sites More sharing options...
Guest Posted March 22, 2016 Share Posted March 22, 2016 Can you just imagine the screams if the Conservatives had hired a US company to look into this for them. I can remember PM Harper being accused of being too friendly to US interests and how his campaign was mirrored on the US campaign style. Surely folks we have people in Canada as well qualified as the US Investment bank to vet this for us. In fact if you look at our banking profits, I would bet that our Canadian Banks are much more qualified to look at the "Risk Factor", after all they are very profitable. Link to comment Share on other sites More sharing options...
MD2 Posted March 22, 2016 Share Posted March 22, 2016 I agree that Canadian banks are (better) qualified to do the assessment, not to mention that the government itself, which is supposed to run the finances of the entire country, should have its own resources to make an investment decision. Link to comment Share on other sites More sharing options...
Super 80 Posted March 23, 2016 Share Posted March 23, 2016 Find a Canadian bank that doesn't have a conflict of interest with Bombardier, or any large Canadian company. My employer has to hire US based advisors pretty often because there is just too much cross-pollination up here. Link to comment Share on other sites More sharing options...
Guest Posted March 23, 2016 Share Posted March 23, 2016 6 minutes ago, Super 80 said: Find a Canadian bank that doesn't have a conflict of interest with Bombardier, or any large Canadian company. My employer has to hire US based advisors pretty often because there is just too much cross-pollination up here. So how about you naming , names so to speak. I didn't know that all the Canadian banks did business with Bombardier. Link to comment Share on other sites More sharing options...
Super 80 Posted March 23, 2016 Share Posted March 23, 2016 Naming names of what? The US based banks and advisors we use? Link to comment Share on other sites More sharing options...
MD2 Posted March 23, 2016 Share Posted March 23, 2016 Why can't the government, with all its advisors, make an educated and informed decision itself? Link to comment Share on other sites More sharing options...
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