While high risk, airplane maker’s preferred shares could offer high reward. Bombardier Inc. is teetering on the edge of a financial precipice.
Bombardier has warned of another challenging year in 2016 before the transformation it has launched, including cost-cutting efforts and shifts in production to low-cost centres, deliver a financial turnaround by 2020.
Karl Moore, professor at McGill University’s Desautels Faculty of Management, said Bellemare has demonstrated that he’s assembled a team of seasoned veterans who have developed a credible plan to propel the company forward now that public funding has eliminated worries about its survival.
Bombardier has signed a deal that will see the Caisse de dépôt et placement du Québec (CDPQ) invest $1.5 billion US in a newly created company that will hold the company's rail transportation business.
... Karl Moore, an associate professor at McGill University, said it's a solid business deal, with more upside than Quebec's investment in Bombardier's CSeries program.
Read full article: CBC News, November 19, 2015
Karl Moore explains why getting a piece of Bombardier’s rail business is a good deal for the Caisse.
Watch the interview: MSN, November 19, 2015
Bombardier et le gouvernement du Québec ont créé une société en commandite pour y placer tous les actifs liés à la C Series et le milliard de dollars américains offert par Québec pour mener à bien le projet. Comment ça fonctionne ?
... « Dans ce cas-ci, c’est un véhicule approprié, commente Ken Lester, professeur à la faculté de gestion Desautels de l’Université McGill. Ainsi, le Québec ne va jamais perdre plus du milliard qu’il a investi. »
Bombardier says a US$1-billion lifeline from the Quebec government will help complete development of the CSeries and restore customer faith in the delayed and costly commercial jet program.
... Karl Moore, professor at McGill’s Desautels Faculty of Management, said the deal doesn’t solve all of Bombardier’s cash flow problems, but does give it “breathing room.”
With Bombardier struggling with a multi-billion dollar loss this year, the Quebec government is riding to the rescue.
Management professor Karl Moore agrees that Bombardier is a critical part of Quebec's economy.
"Part of it is that it's a great part of our history. One of Quebec and Canada's few multinationals developed and built around the world," said Moore.
Bombardier is reportedly getting a helping hand from the government of Quebec, but Karl Moore, Professor of Business Strategy, McGill University says you shouldn't expect any change to the dual-class share structure as a result. “I would say it’s 99 per cent that tomorrow (Thursday) the premier of Quebec will announce support for Bombardier,” said Karl Moore, a professor at McGill University’s Desautels Faculty of Management, citing conversations with senior people in both Bombardier and the provincial government.
Bombardier Inc.’s founding family now has more of its wealth tied to legacy snowmobile company BRP Inc. than to the global plane and train manufacturer, a curious situation caused by Bombardier’s spectacular stock collapse this year.
Karl Moore, Professor of Business Strategy, McGill University discusses the hurdles Bombardier faces and why he says it's inappropriate to compare Bombardier with other Canadian corporate titans that have fallen from grace.
Read full article: BBN, July 24, 2015