Morningstar | Bombardier Continues to Transform, but Cash Flow Will Remain Depressed in 2018 and 2019
Bombardier is a Canada-based industrial conglomerate with positions in aircraft manufacturing and rail transportation. It remains controlled by the Beaudoin family through a two-tier share structure. The firm operates three aerospace units--business aircraft, commercial aircraft, and aerostructures--and a separate rail unit.The business jet unit manufactures Learjet, Challenger, and Global jets. The commercial aircraft unit designs, develops, and manufactures regional aircraft, including the CRJ and the C Series. The latter aircraft program has faced significant challenges requiring cash infusions from the Canadian government. Airbus recently stepped in and took a majority stake in the C Series, renaming it the A220 and promising to support the program's sales and its aftermarket services but paying nothing for it. The smaller aerostructures business, which manufactures aircraft components, is an internal supplier, generating about 75% of revenue from intracompany sales. The transportation unit is focused on light rail, metro, commuter, and regional trains and provides related railway solutions to customers. Bombardier has faced considerable financial challenges, owing primarily to the A220 program, but we're increasingly confident that the new management team can execute a longer-term turnaround. Unloading its ownership in the A220 aircraft program to Airbus, which took a 50.1% stake in the program, will enable Bombardier's management team to focus on its business jet and transportation units, which we think will form the core of the company's portfolio of businesses over the long term.Bombardier is a manufacturer of transportation equipment. Co. carries out its operations in four segments. Aircraft is engaged in the design, manufacture and aftermarket support for three families of business jets (Learjet, Challenger and Global). Commercial Aircraft designs and manufactures commercial aircraft in the 60- to 150-seat categories and provides aftermarket support for these aircraft as well as for the 20- to 59-seat range category. Aerostructures and Engineering Services designs and manufactures aircraft structural components and provides aftermarket component repair and overhaul. Transportation delivers products and services in sustainable mobility.
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