ON DECEMBER 13 Bombardier Inc announced major changes following the sudden departure of President & CEO Paul Tellier who had said that he did not wish to renew his contract when it expired at the end of 2005.
In Tellier’s place Bombardier has set up a new Office of the President headed by Laurent Beaudoin as Executive Chairman. Bombardier Transportation President André Navarri and Pierre Beaudoin, President & CEO of Bombardier Aerospace, each become Executive Vice-President in the new Office.
Bombardier had released its third quarter results on December 1, commenting that the company ’continues to post positive results’ but ’is not yet performing to market expectations despite productivity improvements’.
The Transportation division’s revenues for the quarter to October 31 were US$1·9bn, up from $1·7bn for the same period in 2003, with EBITDA of $79m, new orders worth $900m and an order backlog of $22bn. This increase in revenue was mainly in the UK, and the company also benefited from the weakening of the US dollar, now the company’s choice for financial reporting.
The restructuring programme is to be extended, and Bombardier Transportation plans to shed a further 2200 staff by April 2006, bringing the total to 7600 or 21% of its workforce. The extra job losses will be spread across 27 locations in 14 countries, with the majority in Germany, Britain and Canada. The additional restructuring will cost a further $25m above budget.
During the third quarter, on September 28, Bombardier reached a settlement with DaimlerChrysler AG on all outstanding disputes arising from its acquisition of DaimlerChrysler Rail Systems GmbH (Adtranz), resulting in a payment by DaimlerChrysler of €170m.
H On December 7 Bombardier announced the sale to The Greenbrier Companies of its interest in Greenbrier-Concarril LLC and Gunderson Concarril for US$10m. The joint venture of Bombardier and Greenbrier was formed in 1998 to manufacture freight wagons for North America. Vehicle assembly at Bombardier’s Sahagún facility in Mexico was carried out through Gunderson Concarril, which will continue to lease part of the site for wagon production. Bombardier will continue to assemble locos and passenger rolling stock at the plant.