• 1
  • 2
  • 3
  • 4
  • 5
  • 7
 
User avatar
LAXintl
Topic Author
Posts: 23634
Joined: Wed May 24, 2000 12:12 pm

Confirmed: Mitsubishi Heavy Industries to Acquire CRJ Program from Bombardier

Sat May 04, 2019 4:28 am

Leeham News picked up comments of Bombardier CEO Bellemare from its Q1 2019 earnings call yesterday which to probably to no one's surprise at this stage confirms the company will exit the commercial aircraft sector.

On the call Bellemare was quoted as: "Clearly we are divesting out of commercial, we want to focus on business aircraft moving forward."

https://twitter.com/LeehamNews/status/1 ... 4504301568
Last edited by SQ22 on Tue Jun 25, 2019 4:47 pm, edited 4 times in total.
Reason: Title updated
From the desert to the sea, to all of Southern California
 
User avatar
madpropsyo
Posts: 63
Joined: Sat Jun 09, 2018 2:02 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 04, 2019 4:57 am

Well that's unfortunate. On a conceptual level at least BBD has designed some excellent commercial aircraft recently like the Q400 and CSeries. Though they tend to drop the ball on the execution side of the business. The Q is world renowned for being a hangar queen and the CSeries program turned into such a dumpster fire that the final product ended up not even carying the Bombardier name.

Still, if I were a Canadian tax payer I'd probably be quite happy with this news.
 
phxa340
Posts: 1063
Joined: Thu Mar 29, 2012 4:07 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 04, 2019 5:36 am

Good strategy when the economy is great, but the first thing that falters when it deteriorates is luxury items ... like business jets. Commercial jets hold up better in recessions, diversification is important. IMO I get why they are doing this, it just seems so short term focused.
 
JayinKitsap
Posts: 1398
Joined: Sat Nov 26, 2005 9:55 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 04, 2019 5:40 am

BBD has had huge losses in their rail business. It is killing the company.
 
workhorse
Posts: 623
Joined: Sun Jul 10, 2005 11:35 pm

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 04, 2019 9:17 am

So, how the Bombardier Aerospace's industrial footprint will look like in a few years?

I guess the ones who have the most reasons to be worried are Wichita. Learjets aren't selling as much as the Globals and the Challengers and there have been rumors of BBD trying to sell them with no takers yet.

The Globals' production is moving from Downsview to Pearson. I guess Toronto is safe for a while because they won't try to "optimize" a location where they just invested a pile of money into a new facility.

What will happen in Montreal once the CRJs are done? As far as I understand, the Challengers are built in Dorval now, so there's no business jets activity in Mirabel. Does that mean that in some years there will be no more "pure" BBD employees in Mirabel (only CSALP ones)?
 
User avatar
LAX772LR
Posts: 12322
Joined: Sun Nov 09, 2014 11:06 pm

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 04, 2019 9:33 am

Not surprising, but as prior mentioned, what do they do when "the" economy takes a dip.... with quotations because their private-jet business can be vastly affected by even localized economic woes.

Risky move. Predictable. But not sure how it's going to work out longterm.
I myself, suspect a more prosaic motive... ~Thranduil
 
leghorn
Posts: 869
Joined: Sun Jan 22, 2017 9:13 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 04, 2019 10:12 am

Does this mean there is a very low likelihood of them announcing any sort of sales at Paris Air Show. Q400 is gone. CRJ is barely selling.
Do they just have to pin their hopes on a big A220 order for Belfast which is not going to belong to them for much longer.
 
Gr8Circle
Posts: 2604
Joined: Fri Dec 02, 2005 11:44 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 04, 2019 12:44 pm

workhorse wrote:
The Globals' production is moving from Downsview to Pearson.


Really>? Hearing this for the first time......where at YYZ will they be setting up?
 
Gr8Circle
Posts: 2604
Joined: Fri Dec 02, 2005 11:44 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 04, 2019 12:45 pm

workhorse wrote:
The Globals' production is moving from Downsview to Pearson.


Really? Hearing this for the first time......where at YYZ will they be setting up?
 
MIflyer12
Posts: 5410
Joined: Mon Feb 18, 2013 11:58 pm

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 04, 2019 12:52 pm

I'm not sure what you're advocating. Are you saying that companies can't be allowed to pursue matters in court, or at trade commissions? Boeing played it out and lost. BBD's program management failures aren't on Boeing. BBD executed poorly across both commercial aviation and trains and has substantially run out of money (and provincial money, and national government money). Canada let Nortel be liquidated (which, at its peak, had 94,000 employees worldwide); it let Blackberry shrink massively.
 
Weatherwatcher1
Posts: 174
Joined: Sun Mar 03, 2019 5:14 pm

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 04, 2019 1:45 pm

When Bombardier has to take a $500 Million Charge against the CSeries program after announcing the Delta order, it represented $4 Million per order for the program. That indicated that they couldn’t sell the plane for the cost to produce it. It’s not far off from the deferred production cost on the 787 program, but the big difference is that Bombardier didn’t have other high margin programs to boost cash flow while they went through ramp up and reduced production costs.

The Delta order was a desperation move, and signaled that production and engineering costs at Bombardier were too high to compete. It requires significant cash flow to be able to complete with the 737 and A320. Mature High volume rate airplanes have lower unit costs. I believe that The numbers imply that Boeing could build a 737-700 for less than the cost of the CS100. If that is true today, it’s not surprising why Bombardier wants to exit the business.

Having a strong competitor from the E170 and E175 didn’t help the competitiveness of the older CRJ series. The CRJ traces its roots to the 1970s Challenger business jet versus the all new 2000s vintage Embraer product.

I believe all of this can trace back to Bombardier deciding to stretch the original CRJ in the late 1990s whereas Embraer went for an all new plane with the launch of the E170.
Last edited by Weatherwatcher1 on Sat May 04, 2019 1:57 pm, edited 2 times in total.
 
GalaxyFlyer
Posts: 3373
Joined: Fri Jan 01, 2016 4:44 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 04, 2019 1:53 pm

LAX772LR wrote:
Not surprising, but as prior mentioned, what do they do when "the" economy takes a dip.... with quotations because their private-jet business can be vastly affected by even localized economic woes.

Risky move. Predictable. But not sure how it's going to work out longterm.


BBD delivered more business jets than RJ airliners, in up and down business cycles. Bizjets produce more profit on the delivery and during the lifecycle. The service centers are major profit centers. The RJ business is a dead end anyway.

GF
 
robsaw
Posts: 421
Joined: Sun Dec 28, 2008 7:14 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 04, 2019 2:28 pm

madpropsyo wrote:
Well that's unfortunate. On a conceptual level at least BBD has designed some excellent commercial aircraft recently like the Q400 and CSeries. Though they tend to drop the ball on the execution side of the business. The Q is world renowned for being a hangar queen and the CSeries program turned into such a dumpster fire that the final product ended up not even carying the Bombardier name.

Still, if I were a Canadian tax payer I'd probably be quite happy with this news.


As a Canadian taxpayer it doesn't make me happy. With less business, less employment, less spin-off industrial activity HOW do we (the taxpayer) get our "investment" back? Sure, maybe it limits the opportunity for further investment (bailout) that goes nowhere - but this is effectively notice of a write-off for the taxpayer.
 
User avatar
spinotter
Posts: 515
Joined: Wed May 27, 2015 1:37 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 04, 2019 3:34 pm

JayinKitsap wrote:
BBD has had huge losses in their rail business. It is killing the company.


Is that true? Some on a.net seem to have blamed the divestiture of the CSeries on the CSeries itself, that being what was killing the company. They have kept the rail business, and although I have always been an Alstom fan (A vs. B can mean Alstom versus Bombardier as well as Airbus vs. Boeing!), Bombardier seems to win a lot of big contracts in the rail business.
 
Gulfstream500
Posts: 297
Joined: Sat Oct 20, 2018 2:30 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 04, 2019 4:35 pm

spinotter wrote:
JayinKitsap wrote:
BBD has had huge losses in their rail business. It is killing the company.


Is that true? Some on a.net seem to have blamed the divestiture of the CSeries on the CSeries itself, that being what was killing the company. They have kept the rail business, and although I have always been an Alstom fan (A vs. B can mean Alstom versus Bombardier as well as Airbus vs. Boeing!), Bombardier seems to win a lot of big contracts in the rail business.


If they’re divesting from commercial, then what will the fate of the CRJ be??? Same as Q400, just sold to another company???
Can someone please start a wikipedia list of failed startup airlines? I am interested in seeing just how long it would be...
 
User avatar
DL747400
Posts: 657
Joined: Mon Sep 01, 2008 4:04 pm

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 04, 2019 4:45 pm

Weatherwatcher1 wrote:
The Delta order was a desperation move, and signaled that production and engineering costs at Bombardier were too high to compete. It requires significant cash flow to be able to complete with the 737 and A320. Mature High volume rate airplanes have lower unit costs. I believe that The numbers imply that Boeing could build a 737-700 for less than the cost of the CS100. If that is true today, it’s not surprising why Bombardier wants to exit the business.


Very good points. Many are hoping that Airbus will put the resources behind the A220 program needed to increase production rate, lowering productions costs and generally making the A220 more competitive and marketable to airline customers. Right now the limiting factor is low production rate and the inability of airlines to secure delivery slots in the near future. Increased production rate will help that by moving forward the earliest available delivery slots.

In the end, airlines don't care about a manufacturers development and production costs. They care about cost of acquisition, availability and operating economics.
Last edited by DL747400 on Sat May 04, 2019 4:48 pm, edited 1 time in total.
From First to Worst: The history of Airliners.net.

All posts reflect my opinions, not those of my employer or any other company.
 
AWACSooner
Posts: 2411
Joined: Tue Jan 22, 2008 12:35 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 04, 2019 4:47 pm

Good, now they can sell out to Airbus for another dollar and somehow skirt international trade laws in the process. Cause if they sold to Boeing, we all know what the end result would be.
 
User avatar
rikkus67
Posts: 1287
Joined: Fri Jun 09, 2000 11:34 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 04, 2019 5:35 pm

Q400 has been sold to Viking Air, which already has the type certificates from DHC-1 through DHC-7, and the CL-215/215T/415. With all previous DeHavilland Canada products now under one roof, I believe the plan is to revive the historic name. The Q400 will continue to be built at the Downsview plant. It wasn't too far in the distant past that the Dash 8 program was a "Boeing Canada, DeHavilland division" aircraft, even if only briefly...

The Challenger-based CRJ's are long in the tooth, and as more E2's and (now) A220's come online, their days are numbered.

Bombardier had a good run with the commercial program, inherited from DeHavilland and Canadair (the Challenger program being acquired from Learjet)... I hope BBD are able to continue and now focus and succeed with a smaller portfolio.
AC.WA.CP.DL.RW.CO.WG.WJ.WN.KI.FL.SK.ACL.UA.US.F9
 
StarAC17
Posts: 3645
Joined: Thu Aug 07, 2003 11:54 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 04, 2019 6:35 pm

spinotter wrote:
JayinKitsap wrote:
BBD has had huge losses in their rail business. It is killing the company.


Is that true? Some on a.net seem to have blamed the divestiture of the CSeries on the CSeries itself, that being what was killing the company. They have kept the rail business, and although I have always been an Alstom fan (A vs. B can mean Alstom versus Bombardier as well as Airbus vs. Boeing!), Bombardier seems to win a lot of big contracts in the rail business.


Their rail deliveries have either been late and also many of them have had issues.

What we know about aerospace now is that the barriers to entry are astronomically high due to the capital costs needed to develop and manufacture the commercial. BBD found this out and pissed of a lot of Canadian taxpayers with the loans and bailouts. They need to fix their businesses and get their house in order, or they will go under and us Canadians will let them.

Both Airbus and Boeing get assistance from their respective governments to develop and manufacture aircraft (be it subsidies or military contracts) and their is an outstanding documentary on the history of Airbus and Boeing on Prime TV (granted this is A.net so most of us probably know it). Comac might be a player in the future but they will also have state backing (what Chinese business doesn't)
Engineers Rule The World!!!!!
 
Babyshark
Posts: 170
Joined: Mon Oct 29, 2018 4:48 pm

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 04, 2019 7:03 pm

Weatherwatcher1 wrote:
When Bombardier has to take a $500 Million Charge against the CSeries program after announcing the Delta order, it represented $4 Million per order for the program. That indicated that they couldn’t sell the plane for the cost to produce it. It’s not far off from the deferred production cost on the 787 program, but the big difference is that Bombardier didn’t have other high margin programs to boost cash flow while they went through ramp up and reduced production costs.

The Delta order was a desperation move, and signaled that production and engineering costs at Bombardier were too high to compete. It requires significant cash flow to be able to complete with the 737 and A320. Mature High volume rate airplanes have lower unit costs. I believe that The numbers imply that Boeing could build a 737-700 for less than the cost of the CS100. If that is true today, it’s not surprising why Bombardier wants to exit the business.

Having a strong competitor from the E170 and E175 didn’t help the competitiveness of the older CRJ series. The CRJ traces its roots to the 1970s Challenger business jet versus the all new 2000s vintage Embraer product.

I believe all of this can trace back to Bombardier deciding to stretch the original CRJ in the late 1990s whereas Embraer went for an all new plane with the launch of the E170.


^^^ All of that seems legit.

Still seems to me the CRJ200 was first, ERJ145 was better, CRJ700/900 were way better than both, E170/175 was way better than the 700/900, so BBD went all in with an ever better product with the thought if you build a better mousetrap people will eventually come.

They didn't come because thats not how the world works. They build an airplane nobody needed and they got the order book to prove it.

Even Delta didn't want the range, it's not the mission of 100 seaters to go that far, that's a corporate jet way of looking at things. Which from messing with the simulator for it, that's what it is, a corporate jet. It's not an airliner compared to the Boeing and Airbus cockpits. It's just poorly thought out but it seems to be how BBD does things.
 
JayinKitsap
Posts: 1398
Joined: Sat Nov 26, 2005 9:55 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 04, 2019 7:47 pm

spinotter wrote:
JayinKitsap wrote:
BBD has had huge losses in their rail business. It is killing the company.


Is that true? Some on a.net seem to have blamed the divestiture of the CSeries on the CSeries itself, that being what was killing the company. They have kept the rail business, and although I have always been an Alstom fan (A vs. B can mean Alstom versus Bombardier as well as Airbus vs. Boeing!), Bombardier seems to win a lot of big contracts in the rail business.


The rail division had recent losses of $750 million.
https://business.financialpost.com/inve ... d_articles

NYC is still waiting on deliveries of the final 100 rail cars of 300, supposed to have been delivered by end of 2017, NYC stopped receiving because of problems with the cars they have.
https://business.financialpost.com/tran ... -are-fixed

Toronto is having problems with car welding, also very late deliveries. The fight has been in court for several years. The 2017 settlement had BBD completing delivers by this year, now it is sliding sideways again.
https://www.thestar.com/news/gta/2019/0 ... tcars.html
https://business.financialpost.com/tran ... or-repairs
https://www.railwayage.com/passenger/li ... annel=home

The Long Island RR did a contract with a Siemen's - BBD JV back in 2013 that might get pulled, missed the 2018 deadline for operation, got a 2 year extension before the $27K per day delay if not working then.
https://www.govtech.com/fs/transportati ... bacle.html

I read that BBD identified 5 contracts that have major problems.
 
zuckie13
Posts: 159
Joined: Fri Mar 02, 2018 8:23 pm

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 04, 2019 10:59 pm

JayinKitsap wrote:

NYC is still waiting on deliveries of the final 100 rail cars of 300, supposed to have been delivered by end of 2017, NYC stopped receiving because of problems with the cars they have.
https://business.financialpost.com/tran ... -are-fixed



Add to this that NYC Subway actually banned them from even bidding on the next order of cars they were letting.
 
nasadowsk
Posts: 2
Joined: Sun Mar 10, 2019 1:42 pm

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sun May 05, 2019 12:25 am

spinotter wrote:
JayinKitsap wrote:
BBD has had huge losses in their rail business. It is killing the company.


Is that true? Some on a.net seem to have blamed the divestiture of the CSeries on the CSeries itself, that being what was killing the company. They have kept the rail business, and although I have always been an Alstom fan (A vs. B can mean Alstom versus Bombardier as well as Airbus vs. Boeing!), Bombardier seems to win a lot of big contracts in the rail business.


Partially.

They're a huge player in rail, but:

* They have had numerous issues with deliveries in both North America and Europe.
* They have been all but locked out of future business with the NY MTA, who was a big customer of theirs.
* They were effectively locked out of the last few rounds of rail orders from Amtrak. (Alstom got the HST order, Siemens gets all the locomotives. The single level order is Siemens's to lose)
* A number of major Canadian orders have irritated their customers and they're lost business as a result (including, most embaresingly, a few orders in Quebec).
* Their European business seems to be doing better but SBB, among others, isn't happy right now with them.

Granted, in the US, Kawasaki hasn't had a great run *cough*M8, M9*cough*, Rotem's pulled out, the rest of the Japanese have, CRRC is a big ? mark, and Talgo likely wishes they never bothered with the US market at this point. Stadler seems to be the only ones getting anywhere now. And Siemens.

I'd say the downfall of BBD would make a good book, but let's face it, the Canadian government will keep bailing them out whenever they get into trouble (which is probably why they get into so much in the first place).
 
umichman
Posts: 36
Joined: Sun Apr 07, 2019 2:42 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sun May 05, 2019 12:29 am

robsaw wrote:
madpropsyo wrote:
Well that's unfortunate. On a conceptual level at least BBD has designed some excellent commercial aircraft recently like the Q400 and CSeries. Though they tend to drop the ball on the execution side of the business. The Q is world renowned for being a hangar queen and the CSeries program turned into such a dumpster fire that the final product ended up not even carying the Bombardier name.

Still, if I were a Canadian tax payer I'd probably be quite happy with this news.


As a Canadian taxpayer it doesn't make me happy. With less business, less employment, less spin-off industrial activity HOW do we (the taxpayer) get our "investment" back? Sure, maybe it limits the opportunity for further investment (bailout) that goes nowhere - but this is effectively notice of a write-off for the taxpayer.


Think of it this way, it's better to write it off and walk away rather than to keep making endless "investments" like the Italian government does with Alitalia. Sometimes investments don't work out. You learn from the lesson and move on to other opportunities.
 
rsgolfpunk
Posts: 23
Joined: Fri Oct 06, 2017 10:21 pm

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sun May 05, 2019 12:59 am

Wouldn’t winding down and writing off the CRJ be a better financial move than selling because of the tax advantages? Or is Canada accounting less forgiving?
 
strfyr51
Posts: 3828
Joined: Tue Apr 10, 2012 5:04 pm

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sun May 05, 2019 1:15 am

AWACSooner wrote:
Good, now they can sell out to Airbus for another dollar and somehow skirt international trade laws in the process. Cause if they sold to Boeing, we all know what the end result would be.

and? Whay might that BE?? Did Boeing not do right by MDC? Are they not still selling the F15X?
 
User avatar
admanager
Posts: 239
Joined: Sat Aug 20, 2011 11:28 pm

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sun May 05, 2019 1:43 am

zuckie13 wrote:
JayinKitsap wrote:

NYC is still waiting on deliveries of the final 100 rail cars of 300, supposed to have been delivered by end of 2017, NYC stopped receiving because of problems with the cars they have.
https://business.financialpost.com/tran ... -are-fixed



Add to this that NYC Subway actually banned them from even bidding on the next order of cars they were letting.

and add to that VIA Rail Canada just ordered 32 Siemens trainsets, passing on BBD
https://www.viarail.ca/en/about-via-rail/fleet-renewal
 
CRJ900
Posts: 2347
Joined: Wed Jun 02, 2004 2:48 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sun May 05, 2019 8:25 am

Will BBD still be responsible for offering technical support for the CRJ700/900/1000 as many of those aircraft will fly for 15-20 years? They still have 40-50 CRJ900 to deliver.
Come, fly the prevailing winds with me
 
mxaxai
Posts: 1068
Joined: Sat Jun 18, 2016 7:29 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sun May 05, 2019 9:59 am

StarAC17 wrote:
spinotter wrote:
JayinKitsap wrote:
BBD has had huge losses in their rail business. It is killing the company.


Is that true? Some on a.net seem to have blamed the divestiture of the CSeries on the CSeries itself, that being what was killing the company. They have kept the rail business, and although I have always been an Alstom fan (A vs. B can mean Alstom versus Bombardier as well as Airbus vs. Boeing!), Bombardier seems to win a lot of big contracts in the rail business.


Their rail deliveries have either been late and also many of them have had issues.

What we know about aerospace now is that the barriers to entry are astronomically high due to the capital costs needed to develop and manufacture the commercial. BBD found this out and pissed of a lot of Canadian taxpayers with the loans and bailouts. They need to fix their businesses and get their house in order, or they will go under and us Canadians will let them.

Both Airbus and Boeing get assistance from their respective governments to develop and manufacture aircraft (be it subsidies or military contracts) and their is an outstanding documentary on the history of Airbus and Boeing on Prime TV (granted this is A.net so most of us probably know it). Comac might be a player in the future but they will also have state backing (what Chinese business doesn't)

Exactly. It's not just a few very large rail orders but virtually every time I hear of delayed train deliveries these are from Bombardier.

I notice that you left out Mitsubishi. I'm not sure if the MRJ is what they expected but at least Mitsubishi has a very large and diverse parent company that can ride out the losses. Both MRJ and CSeries are probably good examples that designing & manufacturing large commercial aircraft without any government support or prior experience is a painful process. The resulting technology may be good but you'll burn a lot of the (private) investor's money.
 
robsaw
Posts: 421
Joined: Sun Dec 28, 2008 7:14 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sun May 05, 2019 3:21 pm

rsgolfpunk wrote:
Wouldn’t winding down and writing off the CRJ be a better financial move than selling because of the tax advantages? Or is Canada accounting less forgiving?


Your assuming there is a lot of profit now and anticipated in the next few years that would benefit from the loss associated with a write-down of the CRJ business and good-will. It all depends on the carrying-value of the assets associated with the CRJ business. A BIG write-down would imply large amount of assets/good-will AND the inability to find a buyer willing to pay anything near the book value of the business. When it comes to business, I've always been told that "cash is king". If the CRJ business could bring in a lot of cash it would be sold.
 
VSMUT
Posts: 2813
Joined: Mon Aug 08, 2016 11:40 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sun May 05, 2019 3:36 pm

CRJ900 wrote:
Will BBD still be responsible for offering technical support for the CRJ700/900/1000 as many of those aircraft will fly for 15-20 years? They still have 40-50 CRJ900 to deliver.


Not necessarily. But I doubt they would pull the plug entirely. Shouldn't cost them too much to offer it as long as they still build business jets. But selling it off could be possible, and not unheard of. Isn't Viking Air responsible for technical support for some older DHC/ex-Bombardier types?
 
StarAC17
Posts: 3645
Joined: Thu Aug 07, 2003 11:54 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sun May 05, 2019 3:51 pm


I'd say the downfall of BBD would make a good book, but let's face it, the Canadian government will keep bailing them out whenever they get into trouble (which is probably why they get into so much in the first place).


No they won't.
The current Trudeau government if re-elected (that is a big if) does not have any political capital to bail out a Quebec based company simply based on the optics and reality of the SNC-Lavalin scandal. Also BBD has done what a lot of companies have done. Taken the bailout/investment and then cut jobs, outsourced to lower paying jurisdictions and given executive bonuses. Quebec can do what they want but the rest of the country has no taste for bailing out BBD again.
Engineers Rule The World!!!!!
 
ExMilitaryEng
Posts: 542
Joined: Mon May 01, 2017 7:12 pm

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sun May 05, 2019 5:18 pm

StarAC17 wrote:

I'd say the downfall of BBD would make a good book, but let's face it, the Canadian government will keep bailing them out whenever they get into trouble (which is probably why they get into so much in the first place).


No they won't.
The current Trudeau government if re-elected (that is a big if) does not have any political capital to bail out a Quebec based company simply based on the optics and reality of the SNC-Lavalin scandal. Also BBD has done what a lot of companies have done. Taken the bailout/investment and then cut jobs, outsourced to lower paying jurisdictions and given executive bonuses. Quebec can do what they want but the rest of the country has no taste for bailing out BBD again.


I'm always amazed why canadian medias keep focussing on Bombardier's "subsidies" when Ontario automobile assembly plants (US owned, doing little/no R&D in Canada) receive way more.

Or about those $Bs given to two (in BC and NS) shipbuilders for subpar / late work on the Navy shipbuilding program... (when Davie's Shipbuilding can do the work on time, on budget and better than specs - like they did with the "Asterix").

Does anyone think that Bombardier receives more (in proportion) subsidies than its aerospace OEM competitors?
 
marcogr12
Posts: 205
Joined: Sun Mar 04, 2018 2:36 pm

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sun May 05, 2019 5:33 pm

It would be a shame if they closed down production line of the CRJs..They are a fine regional jet in their category,light,speedy and the latest atmosphere cabin gives a more modern and airy look to it..I've flown many times, esp.the CR9 and it's not as claustrophobic as people think it might be.
Assuming they could sell it to someone else,who would take production of the CRJs? Boeing got E-jets, Airbus got the C-Series...
Flying is breathing..no planes no life..
 
GalaxyFlyer
Posts: 3373
Joined: Fri Jan 01, 2016 4:44 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sun May 05, 2019 6:46 pm

CRJ900 wrote:
Will BBD still be responsible for offering technical support for the CRJ700/900/1000 as many of those aircraft will fly for 15-20 years? They still have 40-50 CRJ900 to deliver.


I think it is a regulatory requirement for TC holders to support the type for a set period of time. Beech bought up all the Starships to avoid the support liability
 
b747400erf
Posts: 3133
Joined: Wed Jun 19, 2013 4:33 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Mon May 06, 2019 2:24 am

AWACSooner wrote:
Good, now they can sell out to Airbus for another dollar and somehow skirt international trade laws in the process. Cause if they sold to Boeing, we all know what the end result would be.


Do not worry, Boeing will get another defense contract where executives go to jail after retiring from the military and putting on a suit and tie, to help them recover from the Max and 787 issues. Calling the kettle black is a national pastime for some Americans.
 
Weatherwatcher1
Posts: 174
Joined: Sun Mar 03, 2019 5:14 pm

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Mon May 06, 2019 3:56 am

CRJ900 wrote:
Will BBD still be responsible for offering technical support for the CRJ700/900/1000 as many of those aircraft will fly for 15-20 years? They still have 40-50 CRJ900 to deliver.


There is profit to be made selling spare parts. That business alone pays for the repair and engineering support. If Bombardier exits the business, I see someone buying the Intellectual property for parts.
 
JayinKitsap
Posts: 1398
Joined: Sat Nov 26, 2005 9:55 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Mon May 06, 2019 4:07 am

Weatherwatcher1 wrote:
CRJ900 wrote:
Will BBD still be responsible for offering technical support for the CRJ700/900/1000 as many of those aircraft will fly for 15-20 years? They still have 40-50 CRJ900 to deliver.


There is profit to be made selling spare parts. That business alone pays for the repair and engineering support. If Bombardier exits the business, I see someone buying the Intellectual property for parts.


Viking bought the Q400 for that reason, I am curious if the Q400 line stays running.
 
User avatar
Revelation
Posts: 20932
Joined: Wed Feb 09, 2005 9:37 pm

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Mon May 06, 2019 11:18 am

Meanwhile, Airbus wonders who will be willing to invest in not just buying the A220 wing factory, but willing and able to invest in the A220 ramp up at the wing factory, now that BBD is throwing in the towel with regards to Belfast.
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
ExMilitaryEng
Posts: 542
Joined: Mon May 01, 2017 7:12 pm

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Mon May 06, 2019 4:00 pm

Revelation wrote:
Meanwhile, Airbus wonders who will be willing to invest in not just buying the A220 wing factory, but willing and able to invest in the A220 ramp up at the wing factory...


I would pretend that selling this factory is a very sound business decision from a strict volume/economy of scale point of view.

Currently, BBD just cannot generate sufficient volume in Belfast to achieve optimal volume (and acheive lower unit costs inline with Airbus’s drive to lower A220’s costs…)

Tier-one suppliers (like GKN, Spirit, AVIC etc) could make a much better use of Short Bros capacities/talent pool. In addition, they do not compete with any OEMs - as BBD does. They probably also have a superior expertise in running those types of factories, plus already possess an extended client (OEMs) list that won't perceive they're giving work to a competitor.

Airbus will surely keep a close watch of the process to ensure its interests are protected (ie A220’s wings production…). Otherwise (or if Boeing/AVIC are highest bidders?) Airbus will most probably buy the whole thing.

(FWIW, I was reading somewhere that BBD probably wanted more than what Airbus was offering – thus the current open sale process)
 
Breathe
Posts: 492
Joined: Sat Mar 18, 2017 8:06 pm

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Mon May 06, 2019 4:09 pm

In the medium to long-term it looks like Bombardier will either sell or demerge their aerospace division and become a railway focused business.
 
UPNYGuy
Posts: 273
Joined: Thu Jan 06, 2011 4:14 pm

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Mon May 06, 2019 4:48 pm

...and this right here is how Airbus gains sole control of the A220
 
User avatar
Revelation
Posts: 20932
Joined: Wed Feb 09, 2005 9:37 pm

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Tue May 07, 2019 2:44 am

ExMilitaryEng wrote:
Tier-one suppliers (like GKN, Spirit, AVIC etc) could make a much better use of Short Bros capacities/talent pool.

I guess we'll soon see if the market feels the same way as you do, or not.

Buyers will get to see what it costs Shorts to make these parts along with what they've agreed to sell them at, along with future commitments for volume ramp ups, etc.

ExMilitaryEng wrote:
FWIW, I was reading somewhere that BBD probably wanted more than what Airbus was offering – thus the current open sale process

So either BBD is over-valuing the Shorts enterprise or Airbus is under-valuing it.

My money is on BBD over-valuing it, for the obvious reason, they need as much cash as they can get their hands on.

UPNYGuy wrote:
...and this right here is how Airbus gains sole control of the A220

They already have the right to buy BBD and QC out of the A220 at market price in a few years, so they already have the ability to gain sole control if they chose to exercise it.

This is why it makes sense for BBD to not sabotage the A220 project: the hope of getting a good purchase price from Airbus.

Yet given the direction that BBD is heading, they may not have much of a choice but go for the short term cash grab instead of protecting the long term value of the A220 program.
Wake up to find out that you are the eyes of the world
The heart has its beaches, its homeland and thoughts of its own
Wake now, discover that you are the song that the morning brings
The heart has its seasons, its evenings and songs of its own
 
User avatar
spinotter
Posts: 515
Joined: Wed May 27, 2015 1:37 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Wed May 08, 2019 5:53 pm

ExMilitaryEng wrote:
StarAC17 wrote:

I'd say the downfall of BBD would make a good book, but let's face it, the Canadian government will keep bailing them out whenever they get into trouble (which is probably why they get into so much in the first place).


No they won't.
The current Trudeau government if re-elected (that is a big if) does not have any political capital to bail out a Quebec based company simply based on the optics and reality of the SNC-Lavalin scandal. Also BBD has done what a lot of companies have done. Taken the bailout/investment and then cut jobs, outsourced to lower paying jurisdictions and given executive bonuses. Quebec can do what they want but the rest of the country has no taste for bailing out BBD again.


I'm always amazed why canadian medias keep focussing on Bombardier's "subsidies" when Ontario automobile assembly plants (US owned, doing little/no R&D in Canada) receive way more.

Or about those $Bs given to two (in BC and NS) shipbuilders for subpar / late work on the Navy shipbuilding program... (when Davie's Shipbuilding can do the work on time, on budget and better than specs - like they did with the "Asterix").

Does anyone think that Bombardier receives more (in proportion) subsidies than its aerospace OEM competitors?


The truth? Some people will support any anglophone business and want every francophone business to go down the drain. Everybody knows that this is the case.
 
ExMilitaryEng
Posts: 542
Joined: Mon May 01, 2017 7:12 pm

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Wed May 08, 2019 8:28 pm

spinotter wrote:
The truth? Some people will support any anglophone business and want every francophone business to go down the drain. Everybody knows that this is the case.


I'm impressed that while US based, you still have figured out that continual nasty game from Toronto's centric Canadian medias against Québec based businesses... We indeed have to vary our sources of information. Kudos to you.
 
User avatar
spinotter
Posts: 515
Joined: Wed May 27, 2015 1:37 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Wed May 08, 2019 9:12 pm

ExMilitaryEng wrote:
spinotter wrote:
The truth? Some people will support any anglophone business and want every francophone business to go down the drain. Everybody knows that this is the case.


I'm impressed that while US based, you still have figured out that continual nasty game from Toronto's centric Canadian medias against Québec based businesses... We indeed have to vary our sources of information. Kudos to you.


I am US-based but also reality-based. It is self-evident from the way that majorities and minorities have always behaved. And particularly the Anglo-American sense of superiority and desire to quash the opposition. We white English-speaking most superior beings on earth... it's sad that people have to elevate themselves in that way above other people, n'est-ce pas?
 
leghorn
Posts: 869
Joined: Sun Jan 22, 2017 9:13 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Sat May 11, 2019 1:38 pm

mxaxai wrote:
StarAC17 wrote:
spinotter wrote:

Is that true? Some on a.net seem to have blamed the divestiture of the CSeries on the CSeries itself, that being what was killing the company. They have kept the rail business, and although I have always been an Alstom fan (A vs. B can mean Alstom versus Bombardier as well as Airbus vs. Boeing!), Bombardier seems to win a lot of big contracts in the rail business.


Their rail deliveries have either been late and also many of them have had issues.

What we know about aerospace now is that the barriers to entry are astronomically high due to the capital costs needed to develop and manufacture the commercial. BBD found this out and pissed of a lot of Canadian taxpayers with the loans and bailouts. They need to fix their businesses and get their house in order, or they will go under and us Canadians will let them.

Both Airbus and Boeing get assistance from their respective governments to develop and manufacture aircraft (be it subsidies or military contracts) and their is an outstanding documentary on the history of Airbus and Boeing on Prime TV (granted this is A.net so most of us probably know it). Comac might be a player in the future but they will also have state backing (what Chinese business doesn't)

Exactly. It's not just a few very large rail orders but virtually every time I hear of delayed train deliveries these are from Bombardier.

I notice that you left out Mitsubishi. I'm not sure if the MRJ is what they expected but at least Mitsubishi has a very large and diverse parent company that can ride out the losses. Both MRJ and CSeries are probably good examples that designing & manufacturing large commercial aircraft without any government support or prior experience is a painful process. The resulting technology may be good but you'll burn a lot of the (private) investor's money.

https://www.mro-network.com/airframe/fi ... bombardier
this article suggests Mitsubishi is a good candidate for the CRJ because it makes the tailplane. No interest expressed for or against by Mitsubishi.
 
User avatar
UPlog
Posts: 347
Joined: Sat Jan 27, 2018 5:45 am

Re: BBD CEO: "We are divesting out of commercial, focus on business aircraft moving forward"

Fri May 17, 2019 3:04 am

Building aerospace division solely around bizjets not exactly the most safe thing to do. Look at how after 9/11, 2008 economic crisis and US Tax law changes how bizjet sales tanked. Its a very volatile business.
 
User avatar
clickhappy
Posts: 9130
Joined: Thu Sep 13, 2001 12:10 pm

Mitsubishi to buy the CRJ program?

Wed Jun 05, 2019 7:42 am

The Air Current is reporting that Bombardier and Mitsubishi are “deep into exclusive negotiations” with regards to Mitsubishi buying the CRJ program.

What a crazy story. I wonder if they would move the line to Japan?
 
c933103
Posts: 3787
Joined: Wed May 18, 2016 7:23 pm

Re: Mitsubishi to buy the CRJ program?

Wed Jun 05, 2019 8:07 am

If Mitsubishi take over Bombardier CRJ program's supply chain and global support network then it could be beneficial to the MRJ program, in addition to offering scope compliant aircraft product in the 50-76seats class, and also help Bombardier to set itself free from civil aviation?? But it's still very hard to believe in
Say NO to Hong Kong police's cooperation with criminal organizations like triad.
  • 1
  • 2
  • 3
  • 4
  • 5
  • 7

Popular Searches On Airliners.net

Top Photos of Last:   24 Hours  •  48 Hours  •  7 Days  •  30 Days  •  180 Days  •  365 Days  •  All Time

Military Aircraft Every type from fighters to helicopters from air forces around the globe

Classic Airliners Props and jets from the good old days

Flight Decks Views from inside the cockpit

Aircraft Cabins Passenger cabin shots showing seat arrangements as well as cargo aircraft interior

Cargo Aircraft Pictures of great freighter aircraft

Government Aircraft Aircraft flying government officials

Helicopters Our large helicopter section. Both military and civil versions

Blimps / Airships Everything from the Goodyear blimp to the Zeppelin

Night Photos Beautiful shots taken while the sun is below the horizon

Accidents Accident, incident and crash related photos

Air to Air Photos taken by airborne photographers of airborne aircraft

Special Paint Schemes Aircraft painted in beautiful and original liveries

Airport Overviews Airport overviews from the air or ground

Tails and Winglets Tail and Winglet closeups with beautiful airline logos