The p.-d. g. Alain Bellemare turns the page on a turbulent period at Bombardier

Photo: Paul Chiasson, The canadian Press
The president and chief executive officer of Bombardier, Alain Bellemare, last December 21,

After almost three years marked in particular by restructuring, a major commercial litigation as well as a controversy over wages, the president and chief executive officer of Bombardier, Alain Bellemare, is preparing to turn the page on the most turbulent period of his professional career.
 

Appointed in command of the aircraft manufacturer in February 2015 when a major adjustment was necessary, the engineer estimates that at the mid-way of its five-year plan, the multinational company can finally look ahead.

 

“That’s really where we are going to turn the corner,” explained Mr. Bellemare in the context of an interview from the end of the year given to The canadian Press. The last three years have been really loaded. Is it that there is still work to do ? Yes. But I think we are on the right track. “

 

Nevertheless, significant challenges lie ahead for the manufacturer of planes and trains for 2018.

 

From the beginning of the month of February, an important decision of the international Commission of the commerce of the United States (USITC) will determine if the C Series has actually caused harm to the sales of Boeing (NYSE:BA) and if countervailing duties and anti-dumping duties totalling 292,21 percent will apply.

 

At the same time, Bombardier will also have to conclude its partnership with Airbus in the C Series, at the time a wind of change blowing across the direction of the european giant.

 

In addition, Boeing wanted the aircraft manufacturer, the brazilian Embraer and its aircraft family E-Jet E2, which would allow the us giant to compete with the C Series and thus potentially slow the progression of this family of aircraft.

 

But the former top executive at United Technologies and Pratt Whitney prefers to focus on the elements that, in its opinion, will allow Bombardier to deliver cash flow neutral, as investments will be less demanding.

 

“We will complete the development (of the aircraft), Global 7000, stressed business man, 56 years of age. These are investments which are measured in billions of dollars. This will alleviate the pressure. “

 

In addition to the anticipated conclusion of the partnership with Airbus, Bombardier expects to deliver approximately 40 aircraft C Series this year, in its division of the rolling stock, significant shipments are also expected to peak.

 

Thus, the income of the multinational company should range between $ 17 billion and US $ 17.5 billion US $ in 2018, which is slightly below the expectations of analysts, who were anticipating on average 18.4 billion US$.

 

Too risky

 

Without a doubt, the highlight of 2017 for Bombardier continues to be the partnership with Airbus announced in October, enabling the european company to take control of the C Series without paying a penny in exchange for his expertise in sales and maintenance.

 

Once again, Mr. Bellemare reiterated that the transaction was not caused by the complaint filed by Boeing, adding that he was looking for a third partner in the program of that aircraft family — which cost overruns are estimated to be at least US $ 2 billion — since the “first day” where he is entered in function.

 

“This is a program that was too big for Bombardier alone,” he says. This is not an admission of failure, on the contrary. These programs require significant investments and the level of risk is high. It is better to work with partners. “

 

According to Mr. Bellemare, this approach is inspired by those of the engine manufacturers, who, due to high risks, often enter into “strategic alliances” when the time comes to develop new products.

 

Bombardier and Airbus have come near to enter into an agreement in 2015, he recalled, but the negotiations had foundered because the situation of the aircraft manufacturer in quebec was deemed “too fragile” at the time.

 

Controversy

 

Briefly, the leader of the multinational’s income on the controversy triggered at the end of march when it was revealed that the total remuneration of the senior management had $ 32.6 million US $ in 2016 — an increase of 50 percent year on year.

 

Agreeing that he had never been criticized over his career, Mr. Bellemare has once again affirmed that the company would have “compensation arrangements” able to attract the best executives in the world “.

 

“It is certain that it was not a pleasant situation, he said. This is perhaps not always understood here, but the reality is that Bombardier is a global company. We need to be able to attract executives of this level. “

 

Due to the uproar in public opinion, the company had made a step back by postponing a year, in 2020, the expected increases. In addition, Pierre Beaudoin has abandoned his title of “executive” — which is the part related to the day to day management to the head of the board of directors.

 

However, because of the investment of $ 1.3 billion made by the québec government in the program of the C Series, Mr. Bellemare said to understand that he can have emotional reactions when Bombardier made the headlines.

 

“Everyone feels a little owner of the C Series, is it. The investment from the Quebec government in 2015 has raised the level of attention that was already very high. “

 

It is also the attachment of the people at Bombardier who, according to Mr. Bellemare, has caused a rally behind the company following the filing of the complaint to Boeing from the u.s. department of Commerce.

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