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The Future of Bombardier

drum118

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Based on current events, it been suggested a thread for BBD be started.

In the last 24 hours, BBD has been hit with high duty on their C Plane and the merger between Alstom and Siemens, when it could been BBD and Siemens.

It been suggested maybe a merger with CFA could be another option for BBD.

The hits keep coming this year for BBD and what is the next hit will they see this year.
 

TOareaFan

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Well if this is going to be discussed, we should at least keep some basic facts straight.

a) The duties are a temporary measure and may be unwound when the case is finally decided upon. Any duties collected by this measure will only be collected on planes sold to US carriers (ie. Delta) and only once deliveries actually happen ...so not until next year....so there is no immediate (and perhaps none at all) financial implication;
b) Sales to other companies not based in America are unaffected.
c) before any duties become permanent....Boeing still has to prove that whatever price/deal Bombardier gave Delta actually hurt Boeing's business....so, I guess, they have to prove that had Delta not purchased the C series at whatever price they actually paid, they would have been buying Boeing planes.
d) The C Series program now has separate ownership from BBD.....the C-Series (not the entire aviation division) is 49% owned by the Gov't of Quebec....so that program has some financial staying power.
e) The rail division is 30% owned by CDPQ....so also has a bit of financial staying power.

Frankly, I think it is way to early to be discussing the future of BBD.......but if it is going to be discussed...don't let the enthusiasm to bury them blind you all of some facts.

I'll be watching....but not likely posting in this thread....way to early for such discussion.
 

crs1026

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Bombardier's share price this past week has been in the $2.20 - $2.40 range (BBD.A), which is not the best it has been this year but far better than last year when it was below the $2 mark. I'm sure that if this ruling was potentially fatal, the investment community would have been dumping shares long before now. Share price will probably sink tomorrow but not necessarily fall out of the sky. I would say this ruling says much more about how the NAFTA negotiations are going to proceed than how Bombardier is going to fare in the next while.

Nobody is saying bad things about the C Series plane per se. The loss of the US market is a big hit but we don't know whether a break even is possible on foreign sales, of which there are some at least. Break even is a lot better than collapse.

Bombardier needs to get their act together in oh so many ways, but I don't count them out yet. Nor have I sold my shares.

But then, I held my Nortel shares til the bitter end also.

- Paul
 

Kitsune

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The delta c series duty amounts to around an additional 10 billion possibly based on list price. This isnt a duty .... its an attempt to block all c series sales in the USA.
 

mdrejhon

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219% duty?!?!

If this still back in the printed newspapers day, before the Internet, we'd be screaming "MISPRINT!" or "The newspaper forgot to print the decimal point!"
 

rbt

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Well if this is going to be discussed, we should at least keep some basic facts straight.
In addition, it's also possible that if final assembly took place in the United States that the duty would not apply since it's no longer an import. They can likely do something with their Arizona aircraft service center for assembly of small orders.
 

dowlingm

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In addition, it's also possible that if final assembly took place in the United States that the duty would not apply since it's no longer an import. They can likely do something with their Arizona aircraft service center for assembly of small orders.
Quebec won't like that - what are they pumping money into Bombardier for if the US ends up with the jobs?
 

nfitz

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219% duty?!?!

If this still back in the printed newspapers day, before the Internet, we'd be screaming "MISPRINT!" or "The newspaper forgot to print the decimal point!"
If still in those days, if the politicians in DC made it 219% after Boeing asked for 80% it would be considered an act of war.
 

Cobra

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If still in those days, if the politicians in DC made it 219% after Boeing asked for 80% it would be considered an act of war.
My understanding of Boeing's motivation is that despite everything we think of Bombardier negatively (with good reasons), the C-Series is the best plane of it's category and requires less fuel, which for airline companies is huge in terms of savings/efficiency. However, Boeing are scared to death that Bombardier would use the technology to make bigger planes (737?) which could hurt their share in the market.

So they are trying to kill the threat in its infancy and from the looks of it, the US Government wants to keep it's Air Superiority in all fields.

Bombardier should just turn around and sell elsewhere around the world
 

Woodbridge_Heights

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This too shall pass.

Boeing is scared because the 737 line really is their bread and butter. Compare that close to 10 000 737 aircraft have been built, and there are currently ~600 orders for the 737 NG, ~4000 orders for the new 737 MAX aircraft. Only 1500 747's and 777's have been built, with 20 747's and 500 777's on order. The latest 787 has only ~600 built and orders for another ~700. Also I seem to remember that it is the larger 747/777/787 aircraft that are usually discounted more than the 737.

The 737 simply wins out on volume even if the larger aircraft are more valuable.

So if the C Series begins to cut into Boeings 737 program there will be trouble...
 

TOareaFan

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This too shall pass.

Boeing is scared because the 737 line really is their bread and butter. Compare that close to 10 000 737 aircraft have been built, and there are currently ~600 orders for the 737 NG, ~4000 orders for the new 737 MAX aircraft. Only 1500 747's and 777's have been built, with 20 747's and 500 777's on order. The latest 787 has only ~600 built and orders for another ~700. Also I seem to remember that it is the larger 747/777/787 aircraft that are usually discounted more than the 737.

The 737 simply wins out on volume even if the larger aircraft are more valuable.

So if the C Series begins to cut into Boeings 737 program there will be trouble...
According to the president of Jet Blue....they are interested in the C series precisely because there is no other plane like it. They are not considering it against any Boeing products....they are looking to replace their poorly performing Embraer 190 fleet with C Series......Boeing proving they are damaged by the C Series is gonna be tough.....but if they only have to prove it to the US government then perhaps not so tough.....if the NAFTA dispute resolution process stays in place maybe it is more of a legit process.

Perhaps the next step for BBD should be to replace all the parts on their planes that are currently made by about 23,000 US based workers.....replace them with parts made elsewhere....and have those workers ask their government why they are out of work :) ;)
 

ninetykman

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Bombardier and Canadian govt should fight it out. Boeing is the most heavily subsidized company in USA. CS series is a great plan and Boeing simply cannot compete with it. This is why they are using their political clout to punish BBD.

Air Baltic CEO praised the C Series:

http://www.bnn.ca/nothing-able-to-compete-air-baltic-s-ceo-praises-bombardier-s-cseries-1.869576

BBD has finally broken the duopoly of Boeing/AB. Delta CEO clearly stated that a 3rd player is good the aerospace industry.

BBD should focus on China and Asian markets which are growing at exponential rates.

The future is bright for C Series.
 

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