Tuesday, May 07, 2019

Another Storied Canadian Aerospace Company Twists in the Fiscal Wind

          By Henry Stewart

Anyone remember those grand old days when Montreal PQ based Bombardier Aerospace actually built planes?

As outlined in the May 6th, 2019 Leeham News and Analysis post, "The decline and fall of Bombardier," those days are mostly done.

According to the post, with the announcement that its Belfast manufacturing facility and a smaller one in Morocco are for sale, Bombardier retains control over the manufacture of only the CRJ regional series of airliners. However, analysts expect that this facility will also be sold in the near future.

According to the post:
Bombardier pioneered the regional jetliner and dominated the turboprop sector.
(But Brazilian based Embraer surpassed the former and ATR (the Blagnac, France based ATR Aircraft) the latter.
A bold move to jump into the lower end of the market dominated by Airbus and Boeing, coupled with bad management and over-extending the balance sheet, nearly bankrupted the company.
As outlined in the January 29th, 2018 post, "A Pyrrhic Victory for Bombardier," that last near catastrophe was only averted when Bombardier "partnered" with Toulouse, France based aerospace powerhouse Airbus SE.

Earlier this month, as outlined in the May 2nd, 2019 Bombardier press release, "Bombardier Reports First Quarter 2019 Financial Results and New Strategic Direction for Aerospace, the formation of Bombardier Aviation," the company announced that it was consolidating  its aerospace assets "into a single, streamlined, and fully integrated Bombardier Aviation business unit."

Except, of course, for the parts that it's not trying to sell in an effort to cover its over extended balance sheet. Those components include the Belfast manufacturing facility and, as outlined in the May 6th, 2019 Globe and Mail post, "Bombardier to be supplied by Morocco plant after sale: minister," the smaller manufacturing facility in Morocco.

As outlined in the post, "Canada’s Bombardier Inc will sell its wing component plant in Morocco to a manufacturer that will continue to supply Bombardier after a sale, Moroccan Industry Minister Moulay Hafid Elalamy said on Monday."

The new owner will be revealed in three weeks.

Bombardier reported $2.1Bln US ($2.83Bln CDN) in revenues in the three month period ending March 31th, a drop of 11% over the same period last year.

Henry Stewart is the pseudonym of a Toronto based aerospace writer.

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