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TTC: Flexity Streetcars Testing & Delivery (Bombardier)

I was bored the other day, so I photoshopped what a "shorter" version of the current LFLRV would look like. I am not sure if there is any advantage to a shorter streetcar, but I thought I would put it here as food for thought.
TTC New Streetcar (Light).jpeg
 

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drum118 said:
I support not buying Bombardier any time soon.

They sell the rail division that make money to support a failing air division.

Look what Greed and trying to control the market does to you.

Even Australia is having problems.
Click to expand...

Markets love clarity/certainty.

I think what they are seeing is that conglomerates involved in different businesses are often undervalued by the market. So with the costs associated with the new jet programs (Learjet and C series) the market gets focused on that and loses site of the rail division. Separating the companies (either by spinning the rail into it's own publicly traded entity or by an outright sale) you more clearly value the two components on their own.

Real simple example from the near past that I profited on (a wee bit....didn't have a ton of cash to play with) was when Wendy's owned Tm Horton's. At the time Wendy's was being valued as a hamburger and chips company.......and their valuation was based on that.....they were far from a dominant player there....but they owned this profitable coffee and donuts chain. Rather than push spaghetti up a hill (ie. try and get the markets to fully value TH in their Wendy's valuation) they spun TH off. Those of us that owned Wendy's shares were granted a proportionate share of the new TH's......the day after TH started trading on its own (and, therefore, did not impact the Wendy's share price) the value of Wendy's shares did not drop a penny.....proving the market was not adding any value by them owning TH. For those (like me) who sold their Wendy's shares immediately...we got the same cash value as we would have the day before and, effectively, got our TH shares for free.

From the outside looking in, BBD views itself now as primarily an aerospace company that owns a rail company....all the new hires have aerospace backgrounds and all the "bets" they are making are in aerospace. The market, I believe, also views them as such and that is how they are valued. Aerospace is their Wendy's and rail is their Tim's. By spinning (in some fashion) rail off/out, they will force the market to value/pay for that separate division.
 
drum118 said:
I support not buying Bombardier any time soon.

They sell the rail division that make money to support a failing air division.

Look what Greed and trying to control the market does to you.

Even Australia is having problems.
Click to expand...

So why doesn't Bombardier just get rid of their air division? Selling a successful part of your business, to prop up the failing part doesn't make any sense to me. Of course, I'm not a businessperson though.
 
wopchop said:
Because it is easier to convince people to buy successful businesses?
Click to expand...

It is certainly easier to sell in the public markets a company with a proven track record with predictable repeatable cash flows.

If you look at the tech companies....they start with an idea....they get some seed money....then they access private capital to grow the business...then when they have a cashflow story to tell they issue a prospectus telling that story and access the markets in an IPO.

There is no evidence that the aerospace business is "failing"....it is in a capital intensive stage where the money they need to invest in the C series and Learjet programs is greater than the cash the division is generating....public markets like to value companies on a like to like basis as some multiple of earnings....when the earnings are negative this is difficult. We are yet to see if the negative earnings are short term till the planes start rolling or if it is permanent.
 
And the aerospace division could likely be worth a lot more than the rail division if they are able to turn things around.
 
TheTigerMaster said:
No. This makes me sad. :(
Click to expand...

Me too. I'd be crushed if Bombardier got rolled into Siemens or Alstom's product offerings. Their design language is the most attractive, in my opinion, of the 3. I'm a reluctant Light Rail supporter (because it's typically what deals the death blow to Monorail, ICTS/ALRT or other AGT-type systems), but I can get behind Waterloo's system (and the Eglinton Crosstown) because of the choice of rolling stock. I just love the look of the FLEXITY Freedom. If it were anything else, I'd lose almost all interest in both projects.
 
Duck said:
Me too. I'd be crushed if Bombardier got rolled into Siemens or Alstom's product offerings. Their design language is the most attractive, in my opinion, of the 3. I'm a reluctant Light Rail supporter (because it's typically what deals the death blow to Monorail, ICTS/ALRT or other AGT-type systems), but I can get behind Waterloo's system (and the Eglinton Crosstown) because of the choice of rolling stock. I just love the look of the FLEXITY Freedom. If it were anything else, I'd lose almost all interest in both projects.
Click to expand...

Now they are saying that it isn't for sale at all.

Quebec's economy minister says he's been assured by Bombardier's chairman that the transportation's railway division is not for sale despite a report suggesting the company is working on a sale, merger or spinoff that could be worth up to $5 billion US.
Click to expand...

Anyway, I think a sale or merger with Alston or Siemens is extremely unlikely. What is more likely, IMO, is that the the rail business is spunoff, with Bombardier retaining a stake, and allowing other investors to buy into a single-class shareholder structure. As of right now, Bombardier is majority controlled by the Beaudoin family, despite having something like only 15% of its equity. People have been talking about reforming that dual-class structure for years.
 
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Bombardier always f*cks things up. Look at the delays with the streetcars, the mess with the Montreal metro cars, etc. Because so many Canadian cities just automatically hand the job to them they don't need to do a good job so they don't bother.

Ottawa went with Alstom, and the vehicles they're getting are prime stuff. Much faster than the Flexity (faster than the Toronto TR subway trains even!).
 
obviously they are faster, third rail isn't exactly great for speed. There is a reason HSR trains use pantographs.


Ottawa isn't far enough into the process yet to know if they are going to have delivery or quality issues.. lets wait and see. don't start bragging until you can actually back up your claims.
 
Canada from all prospective is a very small part of the worlds railway market. The fact that bombardier can function the way it does and still remain one of the largest players means the other two players probably carry with them similar issues.
 
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