In a dramatic shakeup at family controlled Bombardier Inc., Pierre Beaudoin is stepping down as president and chief executive officer while his father, Laurent, is retiring as chairman and there are plans afoot for the possible sale of some business units.
Former United Technologies Corp. executive Alain Bellemare is set to replace Pierre Beaudoin – who held the CEO position for 6 1/2 years – on Friday and Pierre Beaudoin will become executive chairman of Bombardier.
The troubled plane and train-maker is also suspending the dividend and looking to access the debt markets for up to $1.5-billion (U.S.) and to issue about $600-million of new equity.
The company also said on Thursday it will “explore other initiatives such as certain business activities’ potential participation in industry consolidation in order to reduce debt.”
It is a sweeping set of moves intended to address the company’s troubles at its aerospace division as it struggles with a looming cash crunch as a result of delays and balooning costs for the new C Series passenger-jet program.
The changes were announced Thursday as Bombardier posted a net fourth-quarter loss of $1.6-billion or 92 cents per share, compared with net profit of $97-million or 5 cents in the year-earlier period.
The company booked a $1.4-billion special pretax charge in the fourth quarter mainly related to the suspension of its Learjet 85 business-jet program.
Revenue was up 12 per cent to $5.96-billion in the quarter ended Dec. 31, 2014.
Excluding special items, net earnings were $83-million or 4 cents per share, compared with $129-million or 7 cents in the year-earlier period. Analysts’ average estimate was 3 cents.
Montreal-based Bombardier has faced growing criticism from investors and analysts over delays to both the Learjet 85 and C Series programs, missed profit targets and the plummeting of the value of its stock.
Critics said Bombardier under Pierre Beaudoin, 52, had major problems executing on the development of new plane platforms.
The company’s class B shares have lost 67 per cent of their value since Mr. Beaudoin was appointed CEO in June of 2008.
Mr. Beaudoin’s becoming executive chairman and the hiring of Mr. Bellemare are smart moves, McGill University management professor Karl Moore said.
“I think it answers concerns in a very neat way,” he said.
Pierre Beaudoin retains a strong hand in steering the company while Mr. Bellemare adds “very considerably to the bench strength of the leadership.”
Mr. Bellemare resigned as president and chief executive officer of UTC Propulsion and Aerospace Systems last month. The McGill MBA graduate also formerly held the position of president of Pratt & Whitney Canada from 2002 to 2008.
Laurent Beaudoin – the son-in-law of founder and snowmobile pioneer Joseph-Armand Bombardier – headed up the company for about 40 years, overseeing the diversification from subway cars and snowmobiles into planes and the development of the successful regional-jet.
Bombardier is controlled through majority ownership of its class A shares by members of the Beaudoin and Bombardier families.Report Typo/Error