There was a time when, if the going got tough for Bombardier, it could count on a helping hand from the Quebec government. Those days might be over.
There was a time when, if the going got tough for Bombardier, it could count on a helping hand from the Quebec government. Those days might be over.
Bombardier is in debt, big time, to the tune of almost $10 billion US, according to an estimate from September. Last month, the company issued a profit warning, with analysts projecting that cash flow would be weak for the foreseeable future.
As its share price plummeted, a report emerged this week that Bombardier is looking at selling its business-jet unit.
It was already trying to get a decent price for its train division and was considering dropping out of the mid-range jet program it spent more than a decade developing.
In Quebec, where Bombardier is as much a historic institution as an economic one, it seemed to many like a fire sale was on. What would be left of the global empire that began in a Valcourt, Que., repair shop 83 years ago?
That sense of panic would normally be enough for politicians to begin discussing throwing a lifeline. Investors, though, might not want to hold their breath.
Can it survive?
“The government has already invested a lot of money in Bombardier,” Premier François Legault said Wednesday, when asked, for the second straight day, whether a bailout was in the cards.
One day earlier, his economy minister, Pierre Fitzgibbon, offered the company some tough-love advice.
He told reporters in Quebec City that Bombardier’s current debt is unsustainable and the company will likely have to sell off at least two units in order to have a future.
Bombardier Inc. is, for the moment anyway, composed of the A220 mid-range jet program (a joint venture with Airbus), a business-jet division (Bombardier Aviation) and a rail division (Berlin-based Bombardier Transport).
