The Canadian firm Bombardier unveiled disastrous financial results this Thursday, February 13 in Montreal. In an effort to pay off its US $ 9 billion debt, the company is trying to redirect its operations.
“Sixteen years later, the adventure of the C Series[becomethere[devenul’A220]is officially over for Bombardier ”, announces the Montreal daily The Press. The multinational Quebec has officially sold its remaining participation in this aeronautical program, both to Airbus and to the Government of Quebec this Thursday, February 13. decision “Finalizes our strategic withdrawal from the commercial aeronautics sector”, Bombardier President Alain Bellemare said in a press release.
The reaction of the Union of Machinists is positive. “We already know the intentions of Airbus, which intends to increase its footprint in Quebec, said Quebec union coordinator David Chartrand. So this is the best scenario [au vu] circumstances.”
Under the agreement, Airbus will pay approximately 552 million euros to increase its participation to 75% in the project of theA220, Airbus Canada, as Bombardier frees up new capital commitments in the program worth € 644 million.
But for Bombardier, these amounts appear clearly insufficient to pay off its heavy debt. Especially since the company has just announced a loss of 1.6 billion dollars (1.47 billion euros) in the last quarter of 2019.
Alstom in the process of acquiring Bombardier Transport
The rail division would therefore also be on the way to be sold to the highest bidder. According to the German daily Handelsblatt, French company Alstom is said to be willing to spend up to € 7 billion to acquire Bombardier Transportation, headquartered in Berlin. The American agency Bloomberg specifies, on the basis of sources familiar with the file, that the talks are at an advanced stage.
The Globe and Mail attributes the Canadian giant’s debacle to several factors. First, the Bombardier-Beaudoin family, which controls the business, “Responsible for one of the greatest examples of wealth creation and destruction in Canadian business history, should have left long ago ”. On the other hand, as had predicted by a former CEO of Bombardier, Paul Tellier, the company should have understood, with its C Series program, that“Airbus and Boeing simply would not tolerate competition in the market for smaller airliners.”
Renowned Toronto daily concludes that if Bombardier’s rail and business jets are sold, there won’t be “Practically nothing” Of which The Journal de Montréal qualified of“One of the most famous Quebec flagships in the world“.