Boeing doing targeted advertising to Canadians...
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November 5, 2020 - 9:30am (14:00 UTC) by Sylvain Faust for www.FliegerFaust.com
Remember the Alamo all you wish – Boeing most certainly does not remember the CSeries - but Canadians do...
And for sure, Canadians will remember for quite a long time --if not for ever -- what Boeing went up to, trying to just snuff out the Bombardier Cseries. To prevent if from ever entering the US market, scarred as it was Bombardier was about to become just another Airbus right in their backyard. On April 27, 2017 Boeing even took legal action to prevent Bombardier from being able to deliver in the US any Cseries assembled in Canada. Why? Because exactly a year earlier, Bombardier had received its first order –and a major one for that matter-- from a US Airlines, as others started suddenly appeared interested to do the same.
On April 28 2016, Delta Airlines had placed an order for 75 CSeries and option for 50 more.
Today with the current situation at Boeing, not having anything "NEW" to contribute to this market segment, --where the CSeries is the new flying whiz kid on the block--, trying to STOP or, at least, to drastically slow down Bombardier from entering for good the US market, was imperative for Boeing. All along, it is also to be remembered the Boeing management already knew about all the technical and safety problems that would soon plague their latest revision of the 1960s 737, the infamous 737 MAX.
Boeing knew perfectly well, as we all did, that if the CSeries could not enter the US market (and with China not behaving like it was expected -not a single order even after all the help Bombardier provided for fixing the design of their upcoming COMAC C919, wing etc.) it would be next to impossible for Bombardier to achieve any measure of success with this new aircraft.
Plainly, the CSeries would be too expensive to build unless some major orders were "secured" in markets where the expectations for so much more are easy to comprehend. The US certainly qualifies as a major market, doesn't it! Orders of such magnitude would have allowed the supply chain more breathing space, so to say, with larger guaranteed volume orders by Bombardier. And providing Bombardier with lower unit costs for each and every component used into the making/assembly of each CSeries aircraft. This is in theory.
Remember that Bombardier still would have needed more money to increase the size of its production facility combined with assembly process optimization to permit a substantially greater number of aircraft to be produced per month. The debt level was already at a drastic record high, making it almost impossible to borrow more.
By the way, did you know the new CSeries dedicated building "Final Assembly Line" (FAL) constructed at Mirabel Airport Bombardier facility was not completely built, as it was originally expected to be? Bombardier was already trying to save money everywhere even before the first CSeries delivery, a program that was getting so expensive, so much more in fact than planned by the top management at Bombardier under the then CEO of the company, Pierre Beaudoin promoted in 2008, son of Claire Bombardier and Laurent Beaudoin and grandchild of the founder Joseph Armand Bombardier. Before 2008 Pierre Beaudoin was President of Bombardier Aerospace since December 2004 under who the CSeries was also managed.
Focusing on Bombardier Inc, it is sad to say the company was (and still is) caught in a catch 22 situation driven by the #1 priority of the controlling/majority shareholder, i.e. the Bombardier and Beaudoin families (aka "The Family").
As mentioned by Charles Bombardier, member of the board of Bombardier Inc. son of Andre Bombardier and grandchild of the founder Joseph Armand Bombardier, it was no secret that The Family never wanted to let go off their absolute majority control of the company.
As shareholders of over 50% of the total vote, The Family's #1 priority is nor the business, neither the shareholders interests, but an imperative necessity never to yield an inch of their total and absolute control of the empire. Not a very sound business priority if you ask anyone, unless you have something else than the Business at heart.
Charles Bombardier: "The key is keeping control of the company and passing it on to the next generation…" Reference 1
That has been the major show-stopper for the growth of Bombardier Inc. in the last few years. Why? No Bombardier CEO for a while (Bellemare or currently Martel) could get new money, financing from the stock market since doing so, --issuing more shares, creating dilution--, as this would bring that "total power trip" to an end, a voting power currently barely standing above 50%. This simply means no new money to finance new ideas, no new money to repay some of that large debt, no new money to make the CSeries production cheaper and a stock market realizing more and more about this dictatorial management. Ever assisted to a Bombardier Inc. annual shareholder meeting?
Some analyst opinions: source https://www.fliegerfaust.com/the-fall-of-bombardie...
"It's a story of corporate arrogance, greed and mismanagement by a family company that has multiple voting shares and doesn't have to answer to an independent board or to the common shareholders…" David Baskin, President Baskin Wealth Management.
"And being a family-held company, it became harder and harder because they wouldn't give up control. If it were an outside board of directors with adults on it, this probably would never have happened…" Norman Levine, managing director, Portfolio Management Corporation.
This total control mentality also forbade Bombardier Inc. from merging, or making large and very beneficial partnership with other key players, as they preferred remaining the sole captain of their smaller and smaller sinking ship. Is this any good for the other shareholders?
Bombardier Inc. Class B shares that was appreciated at above $24 a few years ago is now valued at $0.30 at the time of writing this article. How many investors got their investment zapped to near zero just so The Family could keep their total control of the company? Remember, the Class B shares is worth 1/10 of a vote and was created to help The Family keeps total control. The Class A shares is worth one vote and what is mainly own by the Family.
Currently on Twitter you can see Boeing doing targeted advertising to Canadians pushing for the Canada to purchase their latest version of the Hornet (called Super Hornet) fighter jet aircraft to replace Canadian Forces old CF-18 Hornets.
See their ad below (English and French) and continue reading lower....
Paid advertising aimed at English speaking Canadians:
Nous faisons équipe avec des leaders canadiens de l'aérospatiale sur notre offre d'avions de chasse. S'il est sélectionné pour le #FFCP, le F/A-18 #SuperHornet apportera 61$ milliards canadiens et près de 250 000 nouveaux emplois à l'économie canadienne.
— Boeing Defense (@BoeingDefense) November 2, 2020
Paid advertising aimed at French speaking Canadians (continue reading below)
We're teaming with Canadian aerospace leaders on our fighter jet offer. If selected for the Future Fighter Capability Project, the F/A-18 #SuperHornet will bring C$61B and nearly 250,000 new jobs to the Canadian economy. #FFCP
— Boeing Defense (@BoeingDefense) November 2, 2020
It is interesting to remember that Boeing hit a wall in its relationship with the Canadians, in 2017, when the Canadian Embassador in Paris during the "Salon du Bourget" Paris Airshow 2017 blacklisted Boeing from attending any of the private events held by the Embassy and where Boeing was usually invited (source https://www.fliegerfaust.com/byebye-boeing-defence-blacklisted-by-the-government-of-canada-not-invi-2449631089.html)
Boeing was also on a good track for supplying their new P-8 Poseidon surveillance aircraft (valued at US$250 million each) to Canada for the replacement of the very hold CP-140 Aurora base on the Lockheed Electra of the 50s but this project was also put on ice by Ottawa.
"Some analysts say Boeing carelessly put at risk billions of dollars of defence work or pandered to growing protectionism" Source: "Boeing is taking extreme measures to make sure Bombardier does not become another Airbus" https://www.businessinsider.com/boeing-bombardier-complaint-canada-airbus-2017-5
Hey, that was less than 3 years ago.
Does Boeing think that the Canadian people has already forgotten about the sad consequences of filing their petition against Bombardier for allegedly "Dumping" the CSeries aircraft that to the US? The reason that Bombardier could not close any further sales to any US Airlines and cancelling the value of the CSeries program for the investment market, bringing Bombardier on the hedge of bankruptcy as confirmed by their then CEO Alain Bellemare and forcing the company in giving away for $1 (yes, one) over 50% of the CSeries program to Airbus as a first of a series of steps trying to stop the bleeding. Does Boeing think Canadians forget so easily?
We're Canadians hey… and sure hope the government in Ottawa still remember who they represent and work for.
On the other hand, I personally think that the CF-18 fighter jet replacement process (has been rigged?) is deeply favoring the F-35 aircraft made by Lockeed Martin, since that is what the Department of National Defence (DND) prefers, I'm told. Simply search Google for "Fliegerfaust F-35" for more.
Still if Canada selects the F-35, this is an order given to the US. Is this a gift for almost bankrupting Bombardier Inc. and eradicating them from the Commercial Aircraft business for good? Airbus did offer their fine Eurofighter Typhoon but decided to refrain from spending more resources and bidding since seeing how "F-35 specific" the requirements has been written. SAAB is still in the race with their very capable Gripen fighter jet having submitted their proposal to Ottawa for the "Future Fighter Capability Project" (FFCP).
Airbus and SAAB offered to have their fighter jet totally assembled in Canada and with an increased number of parts directly made in Canada among other incentives. Does Ottawa care?
Good luck Boeing…
So sorry for Boeing that they did not acquired the CSeries instead of trying to kill it now making in the process one of their worst enemies now in the hands of Airbus, renamed A220. The A220 design has legs (and wings) toward future models when Boeing 737 definitively reached the end of its life, when not crashing and taking some lives.
Vision… Management… and having their people (or shareholders) as #1 priority… Let's hope Airbus and the government of Canada share plenty of those essential qualities.
Sylvain Faust for Fliegerfaust
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