Do not ignore Bombardier's global turnaround
Looked at in isolation, the difficulties Bombardier has had in delivering on the city’s streetcar project would give Torontonians every right to be skeptical about our company’s turnaround.
It would even be easy to assume that our struggles here reflect our performance around the world, as some Toronto columnists and pundits have recently urged. In one gloomy critique just last week, Toronto Star columnist David Olive suggested our steadily increasing stock price was the result of “magical thinking.”
But the real sleight-of-hand here is what is not included in the column. Olive mentions a bullish analyst but not the fact that the vast majority, 80 per cent, of the financial analysts who cover Bombardier, are recommending investors buy in.
Also missing is the rationale behind those recommendations — that halfway through our five-year turnaround plan the company has strengthened its balance sheet, restructured its operations, increased margins and returned to revenue growth, with more to come.
We’ve also been hiring to support our growth programs and we’ve found a strong, strategic partner to help us unlock the full value of the C Series airplane, as demonstrated by the significant new order from JetBlue. In our rail business, we are executing on more than 500 active projects in 70 countries around the world.
Not telling the full story of our turnaround does a disservice to our 70,000 employees and obscures the progress that's actually happening at Bombardier. We also disagree with Olive’s suggestion to break up the company given the complete turnaround and value creation being driven by the new management.
After all, it means ignoring the value of Bombardier’s combined scale, synergies, and the fact that our stable rail business acts to offset the more cyclical aerospace industry. Our businesses are complementary, and separating them would harm Bombardier’s ability to make the R&D investments that enable us to compete and to win on a global scale.
For years, Bombardier has been Canada’s single largest investor in research and development. We proudly hold that title today, pumping over $2 billion a year into Canadian innovation and talent, creating thousands of high skilled jobs. We are also one of Canada’s leading exporters, making Bombardier a key player in the Canadian economy. We think Canada needs more companies like Bombardier and Magna, not fewer.
While Bombardier is on a clear path toward regaining a position among the world’s leading industrial companies, one in which we hope all Canadians can take pride, we recognize we still have much to do.
As Toronto commuters well know, our execution has to improve. This means delivering the best quality streetcars for the people of Toronto without further delay or issue. And, for us there is no higher priority.
Mike Nadolski is vice president communications and public affairs for Bombardier Inc.