(07-31-2015, 11:40 AM)Canard Wrote: Quantify how I know what, that I'm a Bombardier fanboy? That's unquantifiable. I don't know why I like milk or the colour grey. I just do. In my opinion, Bombardier makes the best trains out there. In my opinion, Toyota makes the most reliable cars. In my opinion, HUSS makes the best flat rides. etc...
...and you know that planes cost like 2 orders of magnitude more than trains, right? How many planes vs. how many trains or rail vehicles do they have on the books? They might have like 20 planes on order but they have hundreds, if not thousands of rail vehicles in the works.
No, you stated that Bombardier would deliver on time. If it's just a feeling or opinion that you have, I would discount that. The closest comparable customer experience is the TTC's Flexity cars. And that customer experience has been abysmal (totally provable, empirically).
It doesn't matter how many trains or planes there are in the order book, it's dollars that count. Bombardier doesn't pay wages or bills in trains or planes, they are paid in dollars.
If you look at the Q2 financials, http://ir.bombardier.com/misc/filedownlo...er/lang/en
External order backlog
Aero $142B (pgs 35, 32, 25)
Rail $30B (pg 40)
The three aero divisions and one rail division employ roughly the same amount of people. (upwards of 30K) Bombardier had a cash burn of over $800 million in Q2 2015, mostly due to the cyclical nature of the long airplane development cycle. The push back of the Global 7000 jet launch by two years has analysts doing cash burn calculations (they have about $4B) and there will be layoffs -- a cash burn or almost a billion a quarter is not sustainable.
If you are Bombardier's CEO/CFO, where do you cut? The areas with an external order backlog of $142B (Aero) or the area with a $30B order backlog? If I am a rail customer, I would be worried and want clarification. The real and documented delays of product shipments are with current staffing levels. What happens when the company takes steps to mitigate losing almost a billion in cash each quarter and the corresponding lower staffing levels?
The reason why Bombardier wants to sell off part of Rail is because it HAS to. It needs cash to sustain it until its new series of jets gets tested and sold. It's dual class share structure makes it VERY unattractive to many investors. It's stock is already super cheap, raising more equity through share issues is not going to be easy. They need the cash to hit the home run they think they see in the Global 7000 series.