Bombardier Cuts 5000 Jobs and Q-Series Program Sold

[DEFCON]

Dagger - Canada got an old and probably problematic pipeline for 4.5 billion and we're the winners?

 

mrlupin; as I said earlier; I was never a fan of the management leading Bombardier's aerospace programs.

To take your conclusion one step further;  never mind the money the program really needed to remain viable, neither government should have been willing to place their final investments into the CSeries unless & until the company agreed to a change in the senior management lineup.

 

 

[Guest]

43 minutes ago, DEFCON said:

Malcolm

Do some factoring yourself ... the jobs building the pipeline didn't materialize,  Kinder Morgan walked away with 4.5 Billion in cash and we were left with the debt.

With the loss of the C Series the nation lost the technological edge and jobs that would have gone on producing for Canadians long after the pipeline was completed.

Seems to me the Country would have been better off investing 4.5 billion in something material.

when the pipeline goes ahead then please factor in the jobs etc. 

[DEFCON]

Yes, I'll re-factor if & when those jobs materialize.

[Guest]

Just now, DEFCON said:

Yes, I'll re-factor if & when those jobs materialize.

And while you are at it, how about itemizing the $$$ for $$$ return for the money we gave to Bombardier and of course also Chrysler.  I would bet the ledger will be on the - - - side.

[DEFCON]

Malcolm - I keep trying to say; I fully appreciate the history of bailouts at Bombardier.

Histrionics aside; this time out Canada could have turned the page and moved forward 'responsibly' by demanding the change in management everyone knew was necessary long ago.

 

 

[QFE]

On ‎11‎/‎9‎/‎2018 at 11:14 AM, J.O. said:

Wow, just ... wow.

?????

[UpperDeck]

It amazes me that people will decry government involvement beyond the distribution of tax dollars for the protection of life and property and the provision of infrastructure.....call themselves conservatives.....and then expect micromanagement of a corporation seeking public assistance.

To me, government should not be in the business of corporate lending ( or servicing industrial sites) but if and when it does, it should be guided by the normal standards for lending including creditworthiness. Ask a banking consortium for funding and if their due diligence doesn't support the loan, it won't be made regardless of how pleasant the CEO.

[DEFCON]

I don't think you should be amazed as most conservatives probably do share your sentiment;  it's just that free enterprise is not the Canadian way, so if we're going to pick and decide which corporation is the most worthy, I'd rather my taxes had been used to sponsor & protect the C-Series program versus an old  pipeline.

   

[boestar]

Bombardier cuts the jobs.  Longview (viking) picks them up.  The only change is the name on the top of the pay stub.  Viking will continue the line with, I am sure, some restructuring.  The company name will revert to something along the lines of Viking Aircraft - DeHavilland division.

All jobs will remain in Canada.

[vanishing point]

https://business.financialpost.com/pmn/business-pmn/ceo-behind-purchase-of-bombardiers-q400-line-to-keep-production-in-canada

[Guest]

Quote

 & MRO

• Airframes
• ANALYSIS: Q400 rises with Bombardier's transport aircraft retreat

ANALYSIS: Q400 rises with Bombardier's transport aircraft retreat

• 15 November, 2018
• SOURCE: Flight Dashboard
• BY: Jon Hemmerdinger
• Boston

Bombardier's decision to sell two commercial aircraft could benefit its already-successful business jet unit and see the venerable Dash 8 find new life under Viking Air.

But the Q400 and CSeries sales also suggest Bombardier may exit commercial aircraft entirely by selling its CRJ, a programme that could prove attractive to burgeoning airframers.

"Viking is a natural… They are creating an interesting turboprop enterprise," says Richard Aboulafia, vice-president at consultancy Teal Group. "Are we seeing the birth of a new airline

His comments follow Bombardier's 8 November announcement of plans to sell its Dash 8 programme (including the Q400 and related assets) to Viking Air affiliate Longview Aviation Capital.

Having sold majority CSeries ownership to Airbus in July, the CRJ would become Bombardier's only commercial aircraft.

Bombardier also plans to slash 5,000 jobs and shift focus to its rail, business aircraft and aerostructures businesses, chief executive Alain Bellemare recently said.

Q RISING?

Analysts think the Dash 8 will be in capable hands if sold to the Viking Air affiliate as expected in the second half of 2019.

Viking has reinvigorated other low-production former Bombardier turboprops like CL fire bombers and Twin Otters.

Fast and powerful, the Q400 has enjoyed recent sales success. Some 525 remain active and backorders stand at about 60 aircraft, according to Flight Fleets Analyzer.

Analysts wonder if Viking will update the Q400, perhaps adding a new engine or developing new variants, or stretching the aircraft.

"Will they be caretakers to the Dash 8, or will they make an enterprise out of this?" Aboulafia says of Viking. "Maybe they can make a go at it."

Perhaps Viking might develop Q400 variants for border patrol, medivac or reconnaissance work, says Addison Schonland, partner at consultancy AirInsight Group.

A 55-seat passenger-cargo combi might appeal to Twin Otter operators or carriers in India and Africa, he says.

As for the CRJ, Bellemare insists Bombardier will still "actively participate" in regional jet sales. But the company needs cost concessions from suppliers to turn around the money-losing programme, he says, adding that "strategic options" remain on the table.

That language suggests openness to selling the CRJ should suppliers not deliver, analysts say.

But who would buy a programme with only 55 backorders?

Actually, the CRJ's value lies primarily with its global support network and tight relationships with buyers, particularly US buyers, says Schonland.

Such assets could prove valuable to Mitsubishi Aircraft as it sells its MRJ, Schonland suggests.

Indeed, many Bombardier staffers recently took jobs with Mitsubishi Aircraft and its partners, according to a lawsuit Bombardier filed this year against Mitsubishi Aircraft.

Mitsubishi Aircraft might welcome a base in Montreal, hire former CRJ workers and likewise demand cost cuts, he says.

Commercial Aircraft Corporation of China (Comac), which makes the ARJ21, might also have interest. The ARJ21 has the same GE Aviation CFM34 engines as the CRJ.

"You are not buying the CRJ because of the tube and the engines… You are buying that whole structure globally," he says.

Schonland suspects airlines have a dog in the fight. They might order more CRJs partly to maintain competition and stave off price hikes by Embraer.

CRJ aside, Bellemare shows no interest in dropping Bombardier's aerostructures unit, which includes the Northern Ireland sites that supply parts for A220s, Learjets, Challengers and Globals.

The aerostructures business generated $430 million third quarter revenue, up 23% year-on-year.

BACK TO BUSINESS

Comparatively, Bombardier's business aircraft unit seems a model of stability. With a nine-model lineup, it holds among the broadest portfolios among peers and is poised for growth.

"Bombardier sees a much better business case for investing in the business jet market, with higher margins, stronger pricing and a path to being number one in the segment," says aerospace analyst Rolland Vincent.

Bombardier is “encouraged” by market activity, with third quarter orders exceeding revenue by $200 million, Bellemare says. The division ended the period with an “industry leading” backlog valued at $14.3 billion, says chief financial officer John Di Bert.

Bombardier's Global 7500 is leading the charge. The $72 million, 7,700nm (14,245km) range twin recently received Canadian and US certifications, ending Bombardier's “heavy investment cycle”. The GE Aviation Passport-powered aircraft, which has the largest cabin and longest range of any traditional business jet, is helping boost Bombardier’s profitability, with a backlog of more than 100 aircraft.

Bombardier expects to deliver a couple 7500s this year, then boost production to 15-20 aircraft in 2019 and to 40 aircraft in 2020.

“It’s a premium aircraft and… sells like a premium aircraft. So that should pull the margins for BBA upward,” says Di Bert, citing rates of “10% plus” in 2021 onwards.

Bombardier also expects a boost from its Global 5500 and 6500, set to enter service next year. The Rolls-Royce Pearl 15-powered 5500/6500 have new cabins, avionics and wings, built by Mitsubishi Heavy Industries.

Derivative designs like the 5500/6500 are “good examples” of what might come next from Bombardier, says Vincent.

Bombardier indicates much of its aerospace engineering team will move to its business aviation division.

“This will ensure that [the unit] has all the necessary capabilities to continue leading innovation,” says Bellemare.

The Challenger family are upgrade contenders, and Bombardier could launch a large cabin offering in the 4,000-4,500nm-range market, countering Textron Aviation’s Hemisphere.

Bombardier insists its 7,900nm-range Global 8000 remains part of its development programme, but the company might struggle to justify the update expense unless the aircraft gets a significant range boost.

Also uncertain is the Learjet 70/75, which has sold in low volumes but now has updated Garmin G5000 avionics. There remains “magic in the Learjet brand”, but Bombardier has not successfully tapped that value recently, Vincent says.