Here's What I Have to Say About This News : China May Return with a New Higher Offer for Bombardier Transport - Last Offer was $7-8B - Globe and Mail
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Quebec, February 28, 2016 - by Sylvain Faust for Fliegerfaust
Let me write this to you quickly…
Some Canadians do not understand the real value of Bombardier Inc. I mean "Real"… It is not what you see on the stock exchange (i.e. about 2 billion shares @ about $1) showing a market capitalization close to only $2 billion (more on this in a minute). But there is also a very deep economic impact value to this country if we were to be without it, if Bombardier Inc. was acquired by a foreign entity.
But why only $2B market value on the Toronto Stock Exchange for Bombardier Inc.? One of the reasons is that the Toronto financial sector on Bay Street is in some way "pissed" over the Bombardier-Beaudoin Family's total control over the majority of the vote, controlling what happens with Bombardier Inc., why?
So far, "the family" always said they will never sell the company (giving control to the open market, i.e. the entire planet). We are very lucky! Why? Toronto Bay Street and the financial capital market sector world would love for the family not to have control because that would open the door to a takeover of Bombardier Inc., and this, would serve create huge gains selling the company shares at a very higher stock price, cashing in lots of gains. But at what economic cost to us, Canadians? There is a huge "Discount" pressure on the share price knowing that nobody can come up and buy Bombardier Inc. outright. You know who could be fighting mad about the control of the "Family" over Bombardier Inc. and why. Good for us?
Foreign ownership of Bombardier Inc. would open the door to a complete and total move out of the country of all its operations and assets, not just all the jobs at Bombardier Inc. but also all the jobs related to the sectors where it operates. Losing the "engine" to innovation, the driving forces that currently generate high-tech knowledge to be acquired, generating start-up from ex Bombardier employees and suppliers, specialized higher education offered by our universities and aeronautical mechanical schools, higher salary and income taxes collected by us (the government is us), a deep basket of funds for investing in other ventures offering ways to help secure the future of this country, trying to keep Canada at the technical edge in front of other fast and growing nations spending so much in their education systems, engineering, automation, pushing for values like "excellence" (oops, another subject… our education system!)
How does this work? As you might know, few months ago China offered $7 to 8 billion Bombardier Inc. just for its Transport division, Bombardier Transport (a division of Bombardier Inc. representing about 50% of its business and value, oh, 2+2=… wow, far from the stock market total value of just $2 billion…). The Chinese might come back and offer more; this was only their first offer…
Some "commentators"… are suggesting that Bombardier does not need the "temporary investment" in the new high-tech CSeries, that Bombardier Inc. (obviously the Family controlling the vote) should accept that such offers like the one from China, and let go everything to do with its Transport division (a very successful one, making top High Tech High Speed Trains around the world, rechargeable on the go electric public busses, subways, etc. (see http://www.bombardier.comTransport division section if you really want to know, and no, North America countries are not buyers of what Bombardier Transport makes best… Sad).
Back to that suggestion to sell Bombardier Transport to China. Suggesting that Bombardier Inc. to use that $7-8 billion dollars for CSeries, also it could reimburse 100% of Bombardier Aerospace loans (the only group of divisions left after selling Bombardier Transport to China) and to end up with a Bombardier Aerospace totally debt free, i.e. mainly Bombardier Commercial Aircraft and Bombardier Business Aircraft. Is this an interesting option?
Interesting? Fascinating! like Spock might say. That is one way of looking at it. Are we ready for the consequences of this? Anyone? Tell me why. Again, if you don't know exactly what Bombardier Inc. Built and Sell around the world, I suggest you spent some time on their web site at http://www.bombardier.com
Ah, someone asked "What is Bombardier Aerospace? What are its divisions?" Let's start with "Bombardier Commercial Aircraft" and "Bombardier Business Aircraft". If you don't really know what the difference between the two is, think of it like this, one division (Business) sells high speed quality cars to individuals and leasing companies (nice fancy private jets), and the other one (Commercial) sells flying buses to transport companies (Airlines, so they can carry you).
In the "Business Aircraft" division, Bombardier has 3 product lines addressing the complete Business aircraft market, small, medium and large/luxury business aircrafts. The product lines are, Learjet (small, assembled in Wichita), Challenger (medium, assembled in Montreal Dorval) and the Global (large/luxury, assembled in Toronto with its interior completed in Montreal Dorval). The latest, the new Global 7000 and 8000, will be doing its first test flight in the coming weeks. Only 2 test aircrafts are built for its certification since this model is an evolution base on the existing Global 5000 and 6000. It will have an amazing range of over 14500km, flying at 51000' and at almost the speed of sound. Yes, you can say WOW.
In the "Commercial Aircraft" division, the "buses" are, QSeries (currently Q400) built in Toronto, CRJSeries (mainly CRJ-900 and CRJ-1000) built in Mirabel and the CSeries built in Mirabel (CS100 and CS300. Should we expect a CS500 soon since all the development and certification expenses of the CSeries base model is done with the CS100?).
Bombardier Aerospace also as a Specialized Aircraft division. This is where "highly customized" versions of Bombardier aircrafts are sold to customer to achieve specific missions and utilization (military and government end-users). This division generates engineering (customization/modification) work/jobs for Bombardier. Bombardier also has a core component, Bombardier Aerostructures & Engineering Services that does just that. They are the ones who designed and created the new carbon fiber wing as an example (the famous CSeries light wing that Bombardier could still not break, in case you did not know, this is highly unusual in the industry!). This group provides the engineering to Bombardier Aerospace divisions internally, but also offers services to other companies. If you do not know, Bombardier, Airbus and Boeing do business together all the time, and at different levels. For example, the new Boeing P8 Poseidon aircraft, the latest in technology military aircraft for anti-submarine warfare, anti-surface warfare, electronic signals intelligence and more, Boeing is using the Bombardier Challenger 650 for its smaller offering (Boeing calls it the Mini-P8). Aerolia, now called Stelia Aerospace, own by Airbus, makes the center fuselage of the new Bombardier Global 7000/8000. Stelia makes it from their new Mirabel facility (yes, we're not the only ones creating jobs away from its home country, closer to the customer spending large amount of money to acquire our products), please read this: http://www.marketwired.com/press-release/aerolia-c...
You think Bombardier, Airbus, Boeing hate each other's? That they never talk business, really?
Do understand that this is not your fault of "not knowing" all this (and there is more!), but I'm always surprised that the ones "talking" very often do not know much… You need to watch each other's agenda… There's always a reason to try to convince you of something! Like Plato said "There are three classes of men; lovers of wisdom, lovers of honor, and lovers of gain." And what about me? I'm just a very proud Canadian, born in Quebec, German and French immigrant ancestors many generations ago, proud of people like Joseph Armand Bombardier, among others, a visionary, adventurous, determined, a ball of fire, the "spark plug" of this enterprise founded in Valcourt Quebec. He created his first motorized snowmobile at the age of 15, in 1922, wow, and a long successful way since then! Proud of what Bombardier Inc. has become over the years and its impact in our country and abroad. I'm proud of all the work done by our ancestors and predecessors, grand grandparents, grandparents, parents, for the real hard work they accomplished, creating the Canada of today. Don't erase your pass and traditions, it would be an insult to them and their legacy, you! A people who forget his pass is doomed to repeat it, especially that bad parts of it!!!
More about the "Family"? Today, BRP (Bombardier Recreational Products) still has its corporate headquarters in Valcourt, Ski-Doo, Sea-Doo, Can-Am Roadster manufacturing, the Design & Innovation Centre and the BRP Product Development centre, thanks to the "Family" for maintaining operations and many jobs in Valcourt after all these years… Everything could have left the country since, but not, thanks to the wishes or J.A. Bombardier and his heirs (what we call the Beaudoin/Bombardier family).
I'll stop here because the rest is just political, trade negotiations, others pretending they care more about the people of Canada, and/or Quebec, that they can make better deals then others elected…, etc.
As you might understand, many are trying to get "something" in return for the government of Canada temporarily helping Bombardier. The western part of Canada needs help with its failing petroleum sector, pipeline approval in Quebec, etc. Like we say in Québec "y faut c'qui faut…"
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Hope this was informative to some of you.