Bombardier Inc. was flirting with bankruptcy protection last year as it struggled with a cash crunch and high cost structure, chief executive officer Alain Bellemare has revealed.
In the strongest language used so far to describe the plane and train maker’s financial difficulties in 2015, Mr. Bellemare told Gérald Fillion, a business reporter with the French service of CBC TV, “It’s important to realize that Bombardier was on the brink of bankruptcy in 2015 and it’s important for us to reduce our cost structure to ensure the long-term success of the business.
“This isn’t new. In 2015, Bombardier was in a very precarious situation. We needed liquidity.”
A $1-billion (U.S.) investment from the Quebec government, the $1.5-billion sale of a 30-per-cent stake in the rail division to the Caisse de dépôt et placement du Québec, and other funding secured by the company helped to shore up the manufacturer’s cash position, Mr. Bellemare said.
The comments were made after Montreal-based Bombardier reported a loss of $94-million or 4 cents a share on Thursday, a significant improvement from the $4.9-billion, $2.20-a-share loss a year ago when it booked a charge on the C Series new jet and Learjet 85 programs. Revenue fell 9 per cent to $3.74-billion.
Under Mr. Bellemare, Bombardier has been slashing jobs and trying to boost productivity in a multiyear effort to rebuild profit and regain a firm financial footing. The company ran into major delays and budget overruns with its C Series program as well as stretching resources on other new-plane programs and experiencing execution problems on some train projects.
Last month, the company announced it would cut another 7,500 jobs, about 10 per cent of the global work force of about 70,900. The number of aircraft development programs has also been reduced.
Bombardier is still awaiting an anticipated investment from the federal government as a result of its request for $1-billion to match Quebec’s investment.Report Typo/Error