Leveraging The Wing - Bombardier
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Updated: December 30, 2015
November 26, 2015 - Montreal, Quebec, Canada
Bombardier Investor Day 2015 did make me feel good. It was important to know the new management lead by Alain Bellemare and his new Dream Team found what needed to be fixed, that a Plan had been designed and now being put into application.
Great! I'm fine with that, existing known products (including the CS100-CS300-Global 7000/8000) properly managed. Operational and Expenses optimization are going to improve help the bottom line. Sales & Marketing has new blood everywhere it was necessary. Finance has a new care taker and planer, very well experienced, etc. A new management showing their deep knowledge of the company they are managing, applying the "been there done that" that each of them brings with him. Regaining the trust by the investors with a "Management is Now in Charge", indicating the "reality" and how they are going to make it better. That's another excellent change at the "New Bombardier".
That said… What concerns me the most when looking at a company is "what's next?". For the financial analysts having a well-run and managed business with well-defined markets, expenses and incomes does allow for easier expectations, a lean profitable business, a better return on the investment... I'm more than fine with this! As they say, the 3 most important things a business needs, Management, Management, Management...
But… How can we leverage this business beyond, elsewhere, into additional income, via new markets? What does it have that can be sold or licensed for additional revenues? What does it do that is unique and has great value to others? As you might know, Bombardier already has a "Specialized Aircraft" division. It's a successful division selling customized versions of its aircraft for Military and Government applications/missions. See Bombardier Specialized Aircraft section on bombardier.com for more.
But again… What else? Welcome to Bombardier Aerostructures division managed by Vice-President Jean Séguin.
What am I getting at? Remember what Rob Dewar VP CSeries Vice-President & General Manager CSeries announced to the public in Paris/Le Bourget this summer about the wing of the CSeries? They could not break it! They have equipment for that purpose to find out at what angle/stress it would break, as you might assume, this is a very serious part of the certification process. The usual equipment used for that specific task just could not break it! The first thing that comes to mind is… Yes, for sure it means CSeries is here to stay; CS500, etc. are just a question of "when". Incremental versions of the CSeries would be quick to do and inexpensive now that the basic CSeries model is certified. June 2015 "It's a possibility, yes," Rob Dewar, vice president of the CSeries, told Reuters when asked about a CS500. "The platform has the capability to be a larger aircraft." A point to remember, the wing was optimized for the CS300, the CS100 is just a "smaller" version of it. The CS500 would just be one version after the base CS300 model.
But again… Why am I mentioning Bombardier Aerostructure?
The wing for an aircraft is the fundamental part that allows the aircraft to fly in an efficient and optimized way. It has to be as light as possible providing all the lift necessary but also strong enough to support the attach aircraft fuselage weight and its payload, among other technical specifies. What's special about the wing designed by Bombardier, now that it is created, certified and going into production? It is in carbon fiber, very light, stronger than expected and Flexible! (it could also be repaired, remember the incident with FTV1 while repairing engine #1?). Do you know what the authorities in charge of the CSeries wing certification, the FAA and Transport Canada, told the people at Bombardier about the CSeries newly created carbon fiber wing?
"Bombardier you have set the new standard for composite wings certification" said the FAA and Transport Canada. The safest it is, on top of its other qualities! This information about the FAA and Transport Canada was mentioned by Jean Seguin during the Investor Day 2015.
Would it be possible that Bombardier (via its Aerostructure division) "leverage" this wing? (no pun intended) Licence its technology to others? Design and built wings for others using that same successful technology? Now that it is paid for! For an aircraft manufacturer it would be quite less expensive, better "time to market", less risk in the making of new aircraft while taking all the advantages this 100% carbon fiber wing has to offer… Possible?
This is just an example of where Bombardier can now start looking in expending into new markets the New Expertise the CSeries program has paid for! It was not just about the CSeries! Already the CRJ is going to have some improvements resulting of the expertise gained with the CSeries program.
That's also something investors have to consider when looking at Bombardier and its "Troubled CSeries" as the media calls it. Vision! I have my eyes Wide Open. Do you have a good Vision?