Bombardier (Symbol-BBD.B)

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AltaRed
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Re: Bombardier (Symbol-BBD.B)

Post by AltaRed » 08 Feb 2017 13:50

Like much of the negative feedback in the press, I am angered with taxpayer funds being used to support a family controlled company. It supposedly is constructed as a loan, but slim chance we will ever see it repaid.
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Re: Bombardier (Symbol-BBD.B)

Post by kcowan » 08 Feb 2017 15:19

Corporate welfare bums!
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Re: Bombardier (Symbol-BBD.B)

Post by ghariton » 08 Feb 2017 18:52

As expected, Brazil is taking Canada to the World Trade Organization, claiming that the "loans" are illegal subsidies.

The last such incident resulted in a seven-year trade war between Canada and Brazil in the late 1990s and early 2000s. I remember, because I was doing some contract work in Brazil for BCE International at the time. Canadians were not welcomed with open arms.

Okay, so Brazil is not a major trading partner. But with protectionism rising, every little bit helps. So we throw that away, to help a corporation that doesn't need any help, to please some Quebec nationalists who just might give the Liberals enough votes to swing some ridings in 2019 (but probably won't).

Meanwhile, our taxes will be going up to pay for all this silliness.

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Re: Bombardier (Symbol-BBD.B)

Post by ig17 » 08 Feb 2017 19:15

https://twitter.com/DavidBaskinBWM/stat ... 7832679424

"Pres of $BBD.CA got paid $6.4 million last year, which is not bad for a company that lost over $6 billion in 18 months and has <$0 equity"


https://twitter.com/DavidBaskinBWM/stat ... 5061620744

"According to $BBD.CA its average employee makes 170% of average CDN wage. The guy making average wage is subsidizing that. Must feel great."

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Re: Bombardier (Symbol-BBD.B)

Post by hboy43 » 09 Feb 2017 07:27

There has been little but watercooler commentary here for a year. I would rather politicians not do stupid things like waste taxpayers money, but that is what they do. Outside my control.

Anyone being pragmatic about this and see opportunity in BBD shares? I have not read any commentary that suggests the C series is anything but technically excellent. Bellmaire seems to some extent to be righting good ship Bomber after about 2 years into the 5 year plan.

Everything up to now is sunk cost. What are the opportunities going forward given where we are today is the issue ISTM.

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Re: Bombardier (Symbol-BBD.B)

Post by AltaRed » 09 Feb 2017 11:09

I would ask if BBD can really compete economically in that A319/A320/B737 type space. The shortened versions of those planes do not sell as well as the longer versions. While it certainly appears that the C series is technically superior based on first anecdotal reports, Airbus and Boeing can put an effective ceiling on the price of the C series by discounting their own 'small' versions of aircraft. IOW, will the C series ever be economic, when amortiization of development costs has to (should) be included? Or is that where we, the taxpayer, will continue to take the beating?
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Re: Bombardier (Symbol-BBD.B)

Post by gobsmack » 09 Feb 2017 13:42

hboy43 wrote: Anyone being pragmatic about this and see opportunity in BBD shares? I have not read any commentary that suggests the C series is anything but technically excellent. Bellmaire seems to some extent to be righting good ship Bomber after about 2 years into the 5 year plan.
If there is such an opportunity, given that the company is in trouble, shouldn't we be seeing some interest from prospective buyers (e.g., acquisition or merger)? The fact that they always rely on government help makes me think that such an opportunity does not exist (but maybe I am being too simplistic about this).

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Re: Bombardier (Symbol-BBD.B)

Post by AltaRed » 09 Feb 2017 14:15

gobsmack wrote:If there is such an opportunity, given that the company is in trouble, shouldn't we be seeing some interest from prospective buyers (e.g., acquisition or merger)? The fact that they always rely on government help makes me think that such an opportunity does not exist (but maybe I am being too simplistic about this).
We don't know if there have been any solicitations because this is a family controlled company. If the family has made it known that they are not willing to sell, nothing will happen. As long as the family can suck on the taxpayer teat (knowing Canada/Quebec wants to have an aerospace industry), nothing will change.
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Re: Bombardier (Symbol-BBD.B)

Post by AltaRed » 11 Feb 2017 17:58

Those in love with BBD.B might watch Rex Murphy's rant of Feb 9th regarding this company. They shoulda stuck to what they know.
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Re: Bombardier (Symbol-BBD.B)

Post by Shakespeare » 16 Oct 2017 18:56

Europe's Airbus to buy majority stake in Bombardier CSeries program | CTV Montreal News
Airbus will acquire a 50.01 per cent interest in the CSeries Aircraft Limited Partnership (CSALP), which manufactures and sells the plane.

Bombardier will own 31 per cent and the Quebec government's investment agency will hold 19 per cent.
At least we're not on the hook. :wink:
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Re: Bombardier (Symbol-BBD.B)

Post by AltaRed » 16 Oct 2017 20:22

There is obviously an argument going on about how much Airbus is paying for a 50.1% interest, but I see a win-win here for Canada, and likely for the taxpayer going forward. Having the Airbus organization backstopping BBD's commercial aircraft business, and with CETA in place, the market opportunities have improved considerably from BBD going it alone. Plus BBD's big egos and empty Treasury had made their aircraft business financially shaky with questionable forward viability.

We don't necessarily need the US market. Up yours... Trump and Boeing. :lol: :lol:
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Re: Bombardier (Symbol-BBD.B)

Post by Wallace » 17 Oct 2017 10:08

I have a friend who is a commercial pilot and who has also flight-tested commercial jets. He says that the C series is one of the best planes ever. He thinks Bombardier has a winner.

I'm glad for Bombardier but I still wouldn't buy airplane stocks. They're just too volatile for me.
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Re: Bombardier (Symbol-BBD.B)

Post by westcoastfella » 17 Oct 2017 11:12

I don't understand the 20%+ gain in BBD.B today.

According to this article, Bombardier:

* has given 50% of their C-series business to Airbus (zero dollars were paid to BBD.B) in return for supply chain, build efficiencies, etc that Airbus can provide. Airbus will now sell the C-series as one of its own
* will continue to fund production for the first 3 years
* has given up 100 million sub voting shares in BBD
* has given Airbus the right to buy BBD's stake in the partnership at a later date

How does this increase BBD's value by as much as it has gone up today? Or was BBD so undervalued due to the pressure of this program, that they are now just coming back to normalcy?

From the looks of things the real winner here is Airbus... they managed to avoid all the up front R&D costs with building a brand new airplane, but end up with 50% of the program in return for manufacturing and folding into their existing fleet.

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Re: Bombardier (Symbol-BBD.B)

Post by AltaRed » 17 Oct 2017 11:32

I'll speculate that the Cseries program was in danger of imminent collapse without the backing of a viable operation. Now BBD's 31% in the program has real (future) value as compared to potentially 0 value in 100% of the program.
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Re: Bombardier (Symbol-BBD.B)

Post by milton » 17 Oct 2017 14:09

The sad thing is that the dealhttp://www.bombardier.com/en/media/news ... ercom.html gives Airbus the right to buy out Investment Quebec's Cseries stake at fair market value in 2023 and Bombardier's stake in 2025. Bombardier embarked on the Cseries path in 2004 because they decided that it would be harder and harder to compete with China in the smaller aircraft market. It was either 'go big or go home'. So, if Cseries goes to Airbus after 2025, where does this leave the Canadian aviation industry? Or perhaps the Cseries partnership will result in a merger between Bombardier Aerospace and Airbus down the line?

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Re: Bombardier (Symbol-BBD.B)

Post by Shakespeare » 17 Oct 2017 14:25

Why does Canada need an aviation industry? That's a big boy game.
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Re: Bombardier (Symbol-BBD.B)

Post by AltaRed » 17 Oct 2017 14:46

Shakespeare wrote:
17 Oct 2017 14:25
Why does Canada need an aviation industry? That's a big boy game.
I agree, at least in the commercial space. We don't need the burden of R&D costs to compete with Airbus and Boeing. I think we can continue to compete for some of the manufacturing/assembly as part of the conditions of buying aircraft (as we do with Boeing).

Stick with something we can get our arms around, e.g. business aircraft.
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Re: Bombardier (Symbol-BBD.B)

Post by OhGreatGuru » 17 Oct 2017 20:24

Shakespeare wrote:
17 Oct 2017 14:25
Why does Canada need an aviation industry? That's a big boy game.
I will try to avoid getting on a soap box about the importance of maintaining a hi-tech manufacturing industry. But from a strictly economic perspective:
1. Canada is a huge country, with a low population density.
2. We need planes to get around and ship products - it is an important part of infrastructure.
3. If we buy all of our planes from foreign manufacturers, that's a large outflow of capital, which is not good for our balance of payments.

Having said that, I do think BBD's decision to try to compete head to head with the likes of Boeing and Airbus for 100+ seating jets was pretty risky from day one. And the fact that Quebec agreed to bail them out without requiring this family-controlled company to give up their preferential share structure should be a concern to all taxpayers.

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Re: Bombardier (Symbol-BBD.B)

Post by Shakespeare » 17 Oct 2017 20:28

Part of the requirement for the original de Havilland products like the Twin Otter was floatplanes for north access. This is essentially now the Q400 STOL aircraft.

But jets are subsidized by the big boys for national security reasons. That's not a game we can afford to match.
“A wise man should be prepared to abandon his baggage at any time.” -- R.A. Heinlein, The Door Into Summer.

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Re: Bombardier (Symbol-BBD.B)

Post by Shakespeare » 18 Oct 2017 19:26

Airbus shakes up industry with majority stake in Bombardier CSeries program | Financial Post
The big losers are Boeing and Brazil’s Embraer, said industry analyst Chris Murray of AltaCorp Capital.

“Certainly this makes a much, much stronger program and certainly more competitive against anything Boeing would want to offer,” he said.
The irony is that Boeing has in fact enabled a technically capable but financially weak firm to directly penetrate its home market by forcing it into this merger - not the result it wanted.

We can, of course, expect all sorts of legal maneuvers from Boeing saying that the aircraft is still subsidized. Pot, kettle.
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Re: Bombardier (Symbol-BBD.B)

Post by milton » 18 Oct 2017 20:08

Here's an article saying that, if the partnership between Bombardier and Airbus works out, Airbus might not buy out IQ and Bombardier in 2023/2025:

https://globalnews.ca/news/3810551/bomb ... es-buyout/

Maybe from perspective of the little league Canadian economy that would be best scenario?

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Re: Bombardier (Symbol-BBD.B)

Post by Shakespeare » 19 Oct 2017 23:12

Andrew Coyne: CSeries planes — controlled in Europe, built in Alabama, subsidized in Canada | National Post
And whatever else may have changed as a result of the deal, the basic elements of the Bombardier business model — sucking subsidies from the government — have not. The CSeries will be controlled in Europe, it will be built in Alabama, but it will still be subsidized in Canada....

Bombardier was built with subsidy, and is vastly larger than it would have been without it. If much of the world’s aerospace industry was as well, all the more reason to stay out of a game we can’t possibly win, even if we were allowed to play it.
“A wise man should be prepared to abandon his baggage at any time.” -- R.A. Heinlein, The Door Into Summer.

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Re: Bombardier (Symbol-BBD.B)

Post by Taggart » 21 Oct 2017 05:30

I find it all very sad to see Canada's aerospace industry sideswiped once again. Avro, Spar and within a few years Bombardier's aircraft division.

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Re: Bombardier (Symbol-BBD.B)

Post by milton » 13 Nov 2017 18:17

Bombardier Nears $1.1 Billion C Series Deal with Egypt Air:

https://www.bloomberg.com/news/articles ... h-egyptair

Hey at least someone benefits from our subsides :)
Think local, subsidize global!

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