Newspaper article The Canadian Press

Bombardier CEO Refuses to Panic about Turbulence at Transportation Giant

Newspaper article The Canadian Press

Bombardier CEO Refuses to Panic about Turbulence at Transportation Giant

Article excerpt

Bombardier CEO not panicking about woes

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DAVOS, Switzerland - The head of embattled plane and train maker Bombardier (TSX:BBD.B) says there is no need to panic despite the sharp drop in the company's share price since trimming its financial outlook and announcing 1,000 job cuts last week.

Pierre Beaudoin, speaking at the World Economic Forum in Davos, Switzerland, said he understands the concerns of analysts and investors but insisted that the Montreal-based concern is focused on the long term, with revenues from new development programs including the CSeries commercial passenger jet about to begin rolling in.

"We must be patient in our business," Beaudoin said Wednesday. "We invest a lot before (getting) the first revenues. In any long-term projects, there are ups and downs. "

Bombardier's shares have plunged to near a six-year low since announcing last week that development of its Learjet 85 business jet was being put on hold, resulting in the loss of 1,000 jobs in the United States and Mexico. That raised concerns about whether it has enough cash for its key aerospace development programs -- the CSeries set for delivery later this year and the Global 7000/8000 business jet.

Cash flow from its aerospace division will drop to US$800 million from prior estimates of between US$1.2 billion and US$1.6 billion, it said.

The shares lost 30 per cent of their value in less than a week and were down and additional 16 cents or 5.71 per cent at $2.64 on Wednesday in heavy trading of 23.3 million shares, the highest volume on the Toronto Stock Exchange.

Several analysts say management's credibility has taken a hit and it has run out of excuses about not being able to meet its own financial forecasts despite restructuring the aerospace division last summer and proceeding with waves of job cuts that trimmed its overall workforce by 2,900 last year.

For Beaudoin, a member of the family that effectively controls the company through its multiple voting shares, the changes are simply part of the "challenge...to establish a long-term vision."

Despite declining cash flow, Beaudoin closed the door to the potentially selling one of its three aerospace division sectors in an effort to replenish the company's coffers. …

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