Belfast jet-maker Bombardier in $1bn Quebec rescue
Quebec will take an equity stake in Bombardier and invest $1bn into the CSeries, which will need an additional $2bn during the next five years.
The wings for the CSeries are made in Belfast.
The company also posted a $4.9bn, third-quarter loss yesterday and said it was close to the sale of a minority stake in its train unit to unidentified investors.
The rescue, and Bombardier’s disclosures, underscored the sweeping financial strain from an aircraft plagued by overruns, missed deadlines and scant interest from major airlines.
With Bombardier also reeling from setbacks with two new business jets, analysts used a conference call with management to demand answers to a basic question: ‘How did things get so bad’?
“The organisation was overwhelmed by the number of programmes,” chief executive, Alain Bellemare, who took over in February, said during the call.
“We had multiple programmes running in parallel, and that was very challenging for an organisation of our size.”
Bombardier said yesterday that it will cancel the Learjet 85, which was mothballed in January, and push back the larger Global 7000/8000 corporate aircraft by two years, to 2018. Scrapping the Learjet 85 will result in a charge of $1.2bn.
Third-quarter impairment charges for the CSeries tooling were $3.2bn, Bombardier said.
Mr Bellemare’s turnaround plan didn’t stir fresh confidence among investors.
The widely-traded Class B shares plunged in Toronto. The company is still controlled by its founding family, through Class A shares, with enhanced 10-for-1 voting rights.
Challenges abound for the CSeries, Bombardier’s biggest-ever model and the company’s first entrant into the narrow-body jetliner market, which is dominated by Boeing and Airbus.
Quebec has agreed to buy 49.5% of the CSeries programme.
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