News   Nov 04, 2024
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TTC: Flexity Streetcars Testing & Delivery (Bombardier)

Metrolinx is less screwed than TTC. They can look to a bunch of different manufacturers building or soon to build in North America like Siemens, Alstom, Kinki Sharyo for standard-gauge, standard-width, 750V wide turn radius cars, at least to get ION done. TTC needs a sharp turn radius, 2.54m width car with a non standard gauge. It will also need mods like 600V power, a working wheelchair ramp (remember that went through a few iterations with Flexity) and so on which are more minor but drift further from an off the shelf model.

If TTC looks like it might jump to another supplier, or seeks remedies which make the contract a bigger cash flow sinkhole than it is already, Bombardier might kill all units not yet in production and take their chances in court as they did the signalling contract in London. That leaves TTC with little if any chance of having sufficient accessible capacity in place by end 2024. In theory it could buy some of whatever SEPTA does with slight dimensional mods, but there's no timeframe and CanCon would have to put aside.

The other issue would be the survival of Bombardier as it currently exists. The province might offer to buy the Thunder Bay plant but without the overseas supply chain continuing to function that only gets you so far.

Assuming the company survives, I expect a face saving deal with the province kicking in some cash to help get some more ALRVs refurbed and to cover the incremental costs of a quick S70 or Citadis buy for Metrolinx, depending on who has the delivery slots available. Bombardier would continue to build the Crosstown vehicles and with this city's record on infrastructure it's possible no one will end up noticing the cars are late anyway because the stations will, like their cousins on Spadina Extension, be years late.
 
This is the first time we've been told that the Sahagun plant manufactures electronics. Up til now, their role was reported to be fabricating body shells. And problems with body shells and painting were blamed. Now it's wiring harnesses?

This would be like a car plant saying 'Sorry, it took us a while to learn how to put the wheels on. Now we have to focus on getting the engines to stop falling out'.
 
You know to put it sadly into comparison airbus can make an a380 faster than BBR now deliver a flexity, and they follow the same multinational parts supply approach as well. Just goes to show that there really is Noone else to blame but management for letting this get out of hand. Maybe they were too distracted by their c-series jet that they got complacent with their rail portfolio....
 
It looks near certain that the Island Airport jet expansion will be blocked with a Liberal government and Adam Vaughan in a senior role. Porter's C-series jet order is no doubt going to be cancelled as a result. More bad news for Bombardier.
 
Metrolinx is less screwed than TTC.

No, they are screwed. They already have contracts for all these vehicles with Bombardier.

It was $85 million just to cancel a handful of them for the Scarborough LRT

http://www.thestar.com/news/city_ha...arborough-lrt-but-final-cost-kept-secret.html

And that was because Bombardier was OK with it because they were still building tons for the government for the other lines.

Cancelling all of the order is going to be a big penalty. Huge.
 
What options do have for cancelling the order and buying from another firm? Not point throwing good money after bad.

Not many options.

We can fine for delays, but if we cancelled the contract we would have to pay some steeeep penalties. The TTC would have to sue and convince a judge that they had no choice but to cancel the contract. Which would be hard. Suing and forcing Bombardier to pay for refurbishing the current fleet would be much easier.

Also after cancelling it would take another firm about 6-8 years before they could get us the streetcars. The Streetcar order with bombardier began in 2006. We saw the first cars in 2013.

So our best bet is to stay the course and ensure Bombardier pays for anything we have to do during the delays (buses replacing streetcars, refurbishing the current fleet etc)
 
Not many options.

We can fine for delays, but if we cancelled the contract we would have to pay some steeeep penalties. The TTC would have to sue and convince a judge that they had no choice but to cancel the contract. Which would be hard. Suing and forcing Bombardier to pay for refurbishing the current fleet would be much easier.

Also after cancelling it would take another firm about 6-8 years before they could get us the streetcars. The Streetcar order with bombardier began in 2006. We saw the first cars in 2013.

So our best bet is to stay the course and ensure Bombardier pays for anything we have to do during the delays (buses replacing streetcars, refurbishing the current fleet etc)
Totally wrong

Bombardier is in breach of contract and to cancel the order and go with another supplier will cost Bombardier in the long run. Its already cost them $50 million. TTC can go after Bombardier if they don't file for Bankrupt Protection for the cost of rebuilding the ALRV's as well any extra cost to maintain the CLRV, the extra cost between Bombardier contract price and the new contract, as well any extra cost to deal with the late delivery at this time, including bus service.

If TTC issue a tender and contract next year, the first car will show up in 2018/19 as a production car. A test car will show up first based on one of TTC current model. Delivery of final car will vary with each bidder, but should be completed by 2021/22. It possible the order could be split with on being 130 while the other is the rest of the 204 order. Then it could be 60 and the rest of the current contract.

The court will look at the contract and say X car was due on X date, but arrived X date. None of the prototype every made the delivery date as promise to the point 4403 arrived as a production car, not a prototype way behind schedule. Current schedule show delivery dates have been miss. Bombardier hasn't any legal ground at this time to defend TTC claims against them or to cancel the order. Been there and done it.
 
Any tender should be to multiple companies, since we've now learnt our lesson about putting eggs in baskets...this will allow us to get them faster, as well as reduce risk...

If I was a supplier of vehicles right now, I would be approaching the TTC with the options we could provide...and potentially starting to reshuffle future delivery dates to try to free up capacity...

The management problems at bbd are not of the middle kind...they are all at the top, and until the family is removed from power there is likely to be no improvements and a steady decline...if they are removed soon though, I imagine that there will be a large pop in their stock and many more people willing to help them with their cash flow issues...
 
Totally wrong

Bombardier is in breach of contract and to cancel the order and go with another supplier will cost Bombardier in the long run. Its already cost them $50 million. TTC can go after Bombardier if they don't file for Bankrupt Protection for the cost of rebuilding the ALRV's as well any extra cost to maintain the CLRV, the extra cost between Bombardier contract price and the new contract, as well any extra cost to deal with the late delivery at this time, including bus service.

If TTC issue a tender and contract next year, the first car will show up in 2018/19 as a production car. A test car will show up first based on one of TTC current model. Delivery of final car will vary with each bidder, but should be completed by 2021/22. It possible the order could be split with on being 130 while the other is the rest of the 204 order. Then it could be 60 and the rest of the current contract.

The court will look at the contract and say X car was due on X date, but arrived X date. None of the prototype every made the delivery date as promise to the point 4403 arrived as a production car, not a prototype way behind schedule. Current schedule show delivery dates have been miss. Bombardier hasn't any legal ground at this time to defend TTC claims against them or to cancel the order. Been there and done it.

When a business is in a crisis they will negotiate ANYTHING. Neither party can afford what would be a one year delay and huge expense to make it to court. Once it's clear that is happening Bombardier has zero incentive to speed up anything. They could even slow it down even more. Neither party can afford the uncertainty from a long dragged out court battle. This would be settled, and Bombardier may have the advantage in a settlement because the TTC is willing to absorb less of the expense to get things back on track than Bombardier is willing to absorb to end it.

A cancellation can be profitable to Bombardier in the long run. If the cash flow from this project is net negative it can help them to have it cancelled. If the order is causing them a mid-term cash crunch they may cancel. There are a lot of factors at play given fluctuations in currency and their own debt costs which are no doubt rising significantly.

I believe Bombardier seriously regrets the proposal and costing to which they agreed and they would love the TTC/Metrolinx to cancel orders. If that is the case they may even be willing to pay out to have it canceled. Dropping a lump sum of $200 million now may save them cash in the long run if expensive employees can be laid off; and junk divisions sold.

Bombardier's Balance Sheet is bad. They will need to raise cash again or slash expenses, and they have to do one of those quickly. I don't think they can get more cash from another stock offering without giving up family control. A bond offering would be expensive and damaging. The cost certainty from dropping this project may be short term pain for a long term gain of confidence by their investors.
 
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Any tender should be to multiple companies, since we've now learnt our lesson about putting eggs in baskets...this will allow us to get them faster, as well as reduce risk...
The last tender went out to the entire planet. Unless you change the design specs, I don't see any other option except opening it up to extraterrestrial bidders.
 
It's 2015! We don't need roads... or tracks for that matter.

back-to-the-future-31.jpg
 

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