What The CSeries Factory Could Become? Will Become?
With more orders then comes the production and delivery speed at the factory...
Click Like to Follow Fliegerfaust Facebook page to get the News ASAP / Share to share this post now.
12:45 - August 18, 2017- Quebec Canada
Is Bombardier waiting to have the investors comfortable with the return of the company in "the black", making predictable profits and more CSeries orders before unveiling changes at the Mirabel plant helping increase the delivery speed of the new CSeries aircraft?
The current CRJ & CSeries factory at Mirabel airport
For the company (Alain Bellemare and his CFO John Di Bert), a priority is to get its credit rating back in the right direction to gain the respect of the financial analysts and market following the company.
With a better credit rating (waiting for the next review from credit agencies) renewal the debt coming to expiration will cost less to renew. Showing strong control over its financial structure and cost control and margin improvement will also help the total value of the company increase i.e. its share price. This could allow raising some cash to help pay for some expansion at Mirabel by issuing some shares when its price is higher?
The last time Bombardier Inc. did this was in February 2015 at a price of *$2.21 per BBD.B share and raised $750 million with members of the Bombardier/Beaudoin family buying worth US$50 million of those new shares.
Presently BBD.B shares are trading around $2.59,/$2.60, so those investors are in the green. A side note? So are the options received by the government of Quebec as part of the transaction acquiring half of the total ownership of the CSeries. The Strike Price of those options is also $2.21, options to 100 million BBD.B shares.
With the "above expectation" last quarter results, with Bombardier showing a profit like I predicted at the end of this article, combined with way "above expectation" results from its CSeries since its entry into service (just read what SWISS, airBaltic, passengers and industry analyst all have to say) combined with the coming up world tour Bombardier is about to do with its CSeries, I think investors are expecting some good news (i.e. ORDERS!) very soon. ...I heard someone say "no kidding"...
With more orders then comes the production and delivery speed at the factory... we know what it means, the current new factory is not totally what was supposed to be built. Why? Read this! CSeries Production Update - 3rd Party Involvement and more... and also this interesting article? Bombardier Is Running Out of Space and Out of Time
To conclude, I think what Alain Bellemare and his top management are doing is perfectly fine... let's get those first CSeries out in service correctly, taking advantage of having SWISS as its first operator, listening to all what SWISS especially has to suggest and to adjust the production processes accordingly taking the time before cranking up the production way faster... But this also serves another purpose, not requiring spending money on the factory to get it ready for a higher production and delivery rate "right now".
"Build it and they will come" they say... well, that part is done... let's have more to come to buy now, then I'm sure Bombardier will built it (i.e. a more efficient production line)... this is what "I" think.
*all amounts are in Canadian $