Caution and enthusiasm for Bombardier’s new boss, Éric Martel
Installed at the helm of Bombardier, the new president and chief executive officer Éric Martel wanted to express to his employees the enthusiasm he felt when he returned home. However, the COVID-19 pandemic forced him to be cautious.
“Our world has radically changed in recent weeks,” wrote the former head of Hydro-Québec in a message he addressed to the workers of the aircraft and train manufacturer and which was also published on the network. social LinkedIn. It is essential to align ourselves with the right priorities to first stabilize our activities and then grow our business. ”
Without ever alluding to his predecessor Alain Bellemare, Mr. Martel, who twice mentions his wish to introduce a “culture change” at Bombardier, also lists the six priorities on which he will focus over the next 12 months .
Unsurprisingly, the latter wishes to turn the page on the quality problems plaguing Bombardier Transportation. He also wants to complete the sales of assets in progress, including the sale of the rolling stock division to the French giant Alstom.
When these deals announced by Bellemare are completed, the company, which carries a heavy long-term debt of US $ 9.3 billion ($ 13 billion), will be exclusively focused on business jets – a sector vulnerable to vagaries of the economy.
The new boss of the multinational also signals that it will be necessary to “align” the production of the aviation division “to market demand to be more profitable and generate more stable cash flows” – which may suggest that an adjustment staff will also be required.
“Everything is a bit on hold at the moment and it is too early to have this conversation,” said Bombardier spokesperson Olivier Marcil when asked about adjusting production.
Company temporarily ceased production at its Canadian factories until April 26, sending 12,400 unemployed workers, while putting its fiscal forecast on hold as non-essential businesses closed in Quebec and Ontario to limit spread of the new coronavirus.
In Canada, the Global 7500 business aircraft – on which Bombardier has high hopes – is assembled in Toronto and is completed in Montreal, where the Challenger family of aircraft is also assembled. The American site in Wichita takes care of the Learjet.
Even though the Global 7500, whose retail price is around US $ 73 million ($ 103 million), is sold until 2022, several analysts anticipate lower deliveries at Bombardier this year.
Seth Seifman, of the American bank JP Morgan, expects 91 devices in 2020, while his previous forecast reported 162 units. In 2021, the analyst anticipates 129 deliveries, compared to 164 previously.
As of December 31, the order book for Bombardier’s business jet division was US $ 14.4 billion ($ 20.3 billion).
Last year, the company delivered 142 business jets, five more than in 2018, with an estimated value of US $ 5.7 billion ($ 8 billion), according to the latest data from General Aviation. Manufacturers Association.
Bombardier shares closed on the Toronto Stock Exchange at 42 ¢ on Monday, up 3.7%. The stock continues to trade at a low that has not been observed for at least 25 years.