A shadow of Its former self, Bombardier declares turnaround over

by Bloomberg Feb 17, 2020

With just one business left, Bombardier Inc. has officially declared its selling spree over.

The Montreal-based company, which once made everything from snowmobiles to commercial aircraft, will focus solely on corporate jets following its announcement of two separate deals to sell off parts of its business in less than a week. And with the proceeds earmarked toward reducing a $10 billion debt load, Chief Executive Officer Alain Bellemare struck an upbeat tone on Monday after announcing the sale of Bombardier’s rail business to French train maker Alstom SA.

“It is a transformational deal for Bombardier,” Bellemare said during a call with analysts. “It marks the end of our turnaround and the beginning of a new and bright chapter for the company.”

Bellemare presided over many transactions, including the sale of its turboprop-plane business to Longview Aviation Capital Corp. last year, as well as agreements to offload its regional-jet operation and a wing plant in Northern Ireland. Last week, he completed Bombardier’s exit from commercial aerospace by ceding its stake in the Airbus SE A220 program.

On Monday, Bellemare touted Bombardier’s remaining business aviation portfolio, which includes its flagship Global 7500, the largest corporate jet. After a two-year delay and cost overruns, delivery started in December 2018 and the company is now ramping up production.

And that is not for sale, he indicated.

“We’ve completed the turnaround,” he said when asked about considering an offer for the division. “We wanted to ensure that we would have the right tools to de-leverage the business and this is what we’re announcing today. We really like our business aircraft business and we will continue to focus on this.”

The company’s aviation units employs more than 10,800 people in Quebec, anchoring an aerospace industry that’s more than 43,000-workers strong. The provincial government, which retains a 20% stake in the A220 program and had vowed to protect Bombardier and Airbus jobs in the province, also went for a hopeful note.

“I understand what Quebeckers feel when seeing an important chapter of Bombardier’s history closing, but one has to look to the future,” Economy Minister Pierre Fitzgibbon said in a release. With 18,000 employees across the world, “Bombardier will remain a significant industrial company and a leader in research and development on a Canadian scale.”