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A row of unfinished Bombardier Global Express aircraft is seen at a Bombardier plant in Montreal on June 5, 2020.

Paul Chiasson/The Canadian Press

Bombardier Inc., burning cash as it tries to weather the novel coronavirus pandemic, is in contact with the Canadian and Quebec governments about its financial situation but has not made a request for help, according to its chief executive.

The company has seen an increase in activity for both its private jet business and train unit over the past three weeks as more people start flying again and countries reopen their economies, Eric Martel told reporters on a call on Thursday after its annual meeting. Although the company continues to use up a significant amount of cash, he said it has other options to raise funds that are preferable to requesting government support.

The company is “not ruling out the possibility” of seeking financial aid, Mr. Martel said. “For now, I’m not needing to tell governments I absolutely need your help. My preference would be to have private solutions instead of government solutions.”

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While not cash injections, Bombardier has tapped an unspecified number of governments to offer a backstop for its train business in recent weeks through bonding support, with Martel characterizing it as “security that our customers are looking for.” The company had liquidity of US$3.5-billion at the end of March.

Bombardier burned through US$1.6-billion of cash in the first three months of the year as new orders slowed, factories suspended activities and product deliveries became impossible because of border closures.

The comments highlight the troubles faced by Bombardier as it attempts to move forward solely as a maker of luxury jets. The decision to focus on jets increases its reliance on a product tied to the health of the economy. The remarks also expose a potential contradiction: the company is weighing whether it needs to seek more public support at a time when it might have exhausted that goodwill.

In particular, Quebeckers were in uproar in 2017 over the executive compensation awarded to Bombardier’s top executives, which amounted to a collective increase of 48 per cent at a time the company was set to benefit from more than US$1-billion in public support. The government funds were earmarked for Bombardier’s C-Series jet program, which has since been sold to Airbus.

Now, the compensation issue has come up again after the company disclosed last month that it agreed to pay a severance package of US$12.35-million to former CEO Alain Bellemare when he was terminated in March. Bombardier also promised future special payments and potential severance packages to other top executives when a planned deal to sell the company’s train division to France’s Alstom SA closes in 2021.

Several major pension funds, including the Caisse de dépôt et placement du Québec, signalled earlier this week that they intended to vote against Bombardier’s executive pay practices at the annual meeting. Some, including the Caisse, have grown sufficiently discontented that they also opposed reappointing certain directors to the board.

“We can only continue to be opposed to these exaggerated compensation packages,” said Willie Gagnon of Quebec investor rights group Médac. “This is cynical policy.”

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The non-binding advisory resolution on the company’s executive pay was nevertheless approved by 94.5 per cent of votes cast and the full slate of candidates for directors was approved. Bombardier was certain to win as the company’s founding family owns a class of shares that gives it about 60 per cent of the total vote. Still, the 180 million shares that voted “no” on the so-called “say on pay” represented less than 10 per cent of the single-vote Class B shares held by the public.

Asked how he planned to reconcile the possible need for public aid with a perceived reticence by taxpayers to provide it, Mr. Martel said the company “continues to create a lot of value” for Quebec by creating jobs and developing world-leading technology. He said the Caisse, which manages the money of several public pension and insurance plans and owns a minority stake in Bombardier’s train business, stands to reap a profit of $1.5-billion from dividends and other payouts from that investment.

Mr. Martel, a former Hydro-Quebec CEO who previously led Bombardier’s business jet unit, started steering the plane and train maker in early April in the throes of the COVID-19 fallout. He said management is still bracing for a 30 per cent stop drop in sales of private jets this year, a decline which forced the company to lay off 2,500 workers in May.

Existing orders for Bombardier’s flagship Global 7500 jet, which is sold out through 2021, remain largely unchanged, the company has said.

The manufacturer is working through several asset sales, including a deal to divest its plane parts-making business to Spirit Aerosystems. Those sales are key to providing the company with liquidity until it can close the train sale with Alstom, which is worth US$8.2-billion in enterprise value.

Bombardier, once a high-flying manufacturer with a share price topping $20, is now a penny stock. It was trading Thursday at 49 cents on the Toronto Stock Exchange.

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Mr. Martel appears keen for Bombardier to reclaim its pride and credibility, much of which has been eroded over two decades because of poor financial performance and execution. He acknowledged Thursday that the company has significant work to do to repair its relationships with investors and customers.

“While much progress has been made to streamline and focus the business, we have not met our financial targets and your expectations,” Mr. Martel said in a speech at the annual meeting.

Looking ahead, Mr. Martel said his team has begun work on a business plan for the next several years. Entering the defense space is also “an option,” the CEO said. Two of the company’s key rivals, Gulfstream and Cessna, are both owned by larger parents that have military divisions. Bombardier used to have a defense services business but sold those assets in the early 2000s.

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