CEO Reveals that Bombardier was on the Verge of Bankruptcy Last Year

by San Antonio Attorney

Bombardier Inc., a Canadian international aerospace and transportation company, was on the verge of bankruptcy in 2015 due costly operations and insufficient funds, said CEO Alain Bellemare.

In an interview with the company’s CEO, he revealed that they had to minimize the cost structure of the operations to guarantee a long-lasting success of Bombardier.

He said the company solved their liquidity problem by getting a $1-billion funding from the Quebec government, selling 30% stake in the rail manufacturing for $1.5-billion, and other financing obtained by Bombardier.

The statements were made after the company sustained $94-million losses or 4 cents per share, a substantial progress from $2.20 per share or $4.9-billion loss in2015 when booked a charge on the Learjet 85 programs and C Series jet.  Returns dropped 9%, which is equivalent to $3.74-billion.

Under Bellemare’s leadership, the Montreal-based company has been cutting jobs and making efforts to increase output, regain profit and recover a strong financial footing.  Bombardier encountered considerable delays and unexpected expenses with its C Series program, on top of spreading resources on additional new-plane programs and running into implementation troubles on certain train projects.

According to analysts, the C Series program is the main cause of the company’s problems.  After it was launched in 2004, the program has been facing a number of hiccups.

It has been more than 10 years since the C Series began but there is still no planes being delivered.  After deliveries were postponed two times, the company decided to use its latest.

A month ago, Bombardier said it would slash an additional 7,500 jobs, which is around 10% of the 70,900 people it employs worldwide.  Moreover, the quantity of jet development programs has been minimized.

The company has a pending $1 billion funding from the federal government.

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