Moderators: jsumali2, richierich, ua900, PanAm_DC10, hOMSaR
| Quote: Canadian plane maker Bombardier Inc. on Thursday said it would halt its Learjet 85 business-aircraft-development program due to weak market demand, resulting in a pretax charge of around $1.4 billion and about 1,000 job cuts. |
| Quoting KarelXWB (Thread starter): Pretty heavy, shares just dropped 20%. |
| Quoting aerodog (Reply 2): The weak demand in the light jet sector is not new...it has been around for several years. |
| Quote: People should go to jail. Bombardier execs have been deliberately lying to the media and shareholders for years. It's criminal theft what they've done. |
| Quoting planemaker (Reply 3): From the comment section in the Bloomberg article: Quote: People should go to jail. Bombardier execs have been deliberately lying to the media and shareholders for years. It's criminal theft what they've done. I've been warning about BBD for many years and what is happening is actually worse than I anticipated, unfortunately. |
| Quoting MIflyer12 (Reply 5): That it appeared with the Bloomberg article in no way indicates fact-checking by Bloomberg or editorial agreement by Bloomberg. |
| Quoting TusDawg23 (Reply 1): Will it be keep producing the Challenger? |
| Quoting r2rho (Reply 9): But why now, with flight test already underway? |
| Quote: Bombardier also trimmed its 2015 guidance, including a significant drop in the amount of cash flow it expects from its aerospace division. At least one analyst said this raised the possibility that Bombardier may resort to selling stock to improve its financial cushion — a move that would be negative for current shareholders. The new cashflow estimate for Bombardier Aerospace is US$800 million, down from the previous estimate of between US$1.2 billion to US$$1.6 billion in the prior forecast. Cash flow from the rail division is expected to increase slightly. David Tyerman of Canaccord Genuity said the credibility of Bombardier's management is likely to take a major hit from Thursday's announcement. |
| Quoting KarelXWB (Reply 11): Shares continue to decline, now below $3. |
| Quote: S&P cut Bombardier's long-term corporate credit rating to B+ from BB- late on Thursday, and said its outlook was negative, in part because of the Canadian company's reduced profitability and pricing pressure on new aircraft. It said a tough market and big capital expenditures could weigh on performance again in 2015. |
| Quoting planemaker (Reply 10): Quoting r2rho (Reply 9): But why now, with flight test already underway? It still costs money and cash flow is a concern... |
| Quoting queb (Reply 13): |
| Quoting lightsaber (Reply 14): CFRP wings are now a better known than beer can wings. Did something go wrong with the larger body pieces? |
| Quoting Dash9 (Reply 8): Mothballing the Lear 85 will leave a gap in the protefolio but not a huge one and not one which the market is very healthy neither. A good decision overall, but should have been taken earlier. |
| Quoting queb (Reply 13): The next Learjet will be in aluminum. |
| Quoting queb (Reply 17): No, they had major structural problem with the monocoque fuselage (without frames and stringers). During the production of the first two planes, they realized that the fuselage was not stiff enough, so they decided to add frames and stringers like a traditional fuselage. Result: too heavy aircraft, interior dimensions way too small (even for a Learjet), impossible to meet customers requirements (range, timeline, etc), cracks all around after first flights. Some pilots refused to fly again after their first flight. And that's only what I know, I let you imagine what I don't know. In addition, both prototypes are not certifiable, it was a just a circus. |
| Quoting sf260 (Reply 19): That sounds like big mess up from the start. One can only hope not one of those design engineers was involved in the CSeries progrm. I can imagine BBD will have even more trouble finding customers for the CSeries, faith in BBD is at an all time low now. |
| Quote: Signs of trouble have been evident for some time in the Learjet 85 program, which Bombardier launched in 2007. The company struggled to perfect the manufacturing of the mostly carbon-fiber-composite design. It built them at a facility in Querétaro, Mexico facility that sits 6,000 feet above sea level, an altitude that made it hard to produce enough pressure to force air bubbles out from under the carbon fibers, leaving some material weaker than desired. Around 2012, according to Mr. Beaudoin, Bombardier abandoned its initial design for the jet’s body, opting for a more traditional carbon-fiber construction that required more reinforcement. But the manufacturing snags meant Bombardier had to delay the plane’s first flight to April 2014, flying with the original design, well after the aircraft was originally scheduled to be delivered. The new design never flew. |
| Quoting queb (Reply 13): No because the real problem is technical, the Lear 85 is dead, believe me. |
| Quoting planemaker (Reply 21): Some points from Friday's financial news: Bombardier Inc.’s cash levels are getting “uncomfortably close” to the minimum needed to run the company, |
| Quoting planemaker (Reply 21): something I have been warning of on here for many years |
| Quoting queb (Reply 20): |
| Quoting planemaker (Reply 10): cash flow is a concern.. |
| Quoting KarelXWB (Reply 23): Any idea what this would mean for the CSeries if Bombardier runs out of cash? |
Even without the cash crunch the CSeries was already in a world of hurt on several fronts. BBD will not literally "run out of cash" as they do have various options (from not so good to worse) to survive a cash crunch. As I have mentioned several times, BBD's books are actually quite "engineered". The opaqueness makes it difficult to suss out magnitude, timing and degree of impact of financial events. The timing of this Learjet 85 "pause" and the recent order announcement of 24 CRJ900 are just two recent examples. | Quoting Quantos (Reply 25): To be fair to the current management, there has been so much shuffling around at BBD in the past months that whoever took the original LJ85 decisions, as well as whoever took the continuing decisions to keep the program alive, is probably gone (correct me if I'm wrong). |
| Quoting r2rho (Reply 24): In any case, this is yet another blow to whatever credibility BBD management still had... |
| Quote: In mid-January, Bombardier announced a “pause” for an “indeterminate period” in the Learjet 85 program, interpreted by some market analysts as permanently shelving the project. In light of Montreal’s taking a pre-tax special $1.4 billion write down that represents nearly 90 percent of development costs, as well as announcing a cut of 1,000 jobs at company facilities in Wichita, Kan., and Queretaro, Mexico, it appears the most ambitious Lear model ever is lapsing into a deep coma. |
