Quebec ready to support Bombardier

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goldeneagle
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Re: Quebec ready to support Bombardier

Post by goldeneagle » Fri Nov 23, 2018 10:01 am

rookiepilot wrote:
Thu Nov 22, 2018 5:10 pm

Lol. They are a government contractor, for starters.
Take a peek at history. Long time ago, Boeing had this new prototype, the Dash-80,and they were going to sell lots to airlines. Problem with airlines, they always seem to negotiate a price way below the 'list price' when buying a bunch of airplanes, and the Dash-80, civilian model called the 707, was no different. It had all the earmarks of bankrupting the company, except, they had another derivative of the same airplane, KC-135, which was sold to the US Military for numbers much higher than list price. That saved the program, and the company.

Boeing isn't the only American company to benefit from such programs. Remember the DC-10, it was going to bankrupt McDonnel Douglas, until the KC-10 came out of the woodwork.

Boeing has a very unique way of doing accounting, would never pass the GAAP sniff test, but, for some reason they dont have to. When they do an aircraft program, they project how many sales are expected in that program, then dont realize costs until sales begin, and they amortize that cost over the projected sales number, ie, on a per airplane basis. Inevitably sales start to fall short, so they have to 'take a charge' as one of the reports comes up, but lo and behold, always seems to be some windfall in the military side when that happens, and they still end up reporting a profit of some sort. Then they have another big black hole in the accounting, classified projects. Most of those amount to nothing more than a blank cheque for developing some exotic new prototype or what have you, and within those projects they can bury all the R&D costs for exotic new manufacturing techniques, that later get applied to civilian airliner projects.

To see how some money currently flows into Boeing into the black hole of classified projects, just punch X-37 into google and look at some of the hits. This is but one of many avenues used to shovel money into Boeing inside the realm of 'classified' in a manner that bypasses any form of public scrutiny of a company spending public money.

Bottom line is, aircraft manufacturing the world over has plenty of government dollars pouring into those companies. In the USA they funnel it into companies by purchasing airplanes at exhorbitant price points after US Military markings are painted onto the airframe. In Europe they are a little more upfront about it, the governments just own the company. In Canada it came in the form of comparatively small government backed loans.

But study history just a bit farther back on the DHC line with Bombardier eventually inherited. Everybody loves the ubiquitous Beaver, holds it up as a shining example of a great bush airplane built by a great Canadian company. Check out total production by DHC, and where they went. A tad over 1600 originally built, 970 of which were delivered to the US Army. Much to ones surprise when researching the subject, same was true of the Otter, US Army was the single largest customer accepting factory new airplanes. On down the list, DHC-4 was designed and built to military specifications, then some sold into the civilian market as well. DHC-5 was for the most part exclusively for military use. DHC-6 found a sweet spot in the civilian marketplace, unusual for an aircraft, but it was successful. The company later decided to upscale it, and created the DHC-7, which was the financial fiasco that essentially killed de Haviland. A very expensive development program for a spanking new aircraft type that targetted a very specific segment of the market, but they completely misread market demand for the STOL market, and the airplane was to expensive to operate as a general purpose airplane. They struggled on and created the DHC-8 which was less expensive to operate, but, by that time the development costs of 2 programs were sinking the company, and DHC-8 sales were not going to rescue it. Bottom line, if you aren't making airplanes that are targetted for military customers, the business is not likely to sustain itself over the long term.

Same story to the south. Boeing, Douglas, Lockheed all trying to make airplanes for the commercial market back in the day. Look today, Boeing was a winner over time selling airplanes to the military, and survives in that market. Boeing essentially absorbed McD. Lockheed was very successful building airplanes exclusively for the military market, but the dabble into the civilian market almost bankrupt the company with the L-1011. Read history, US Government backed a 1.4 billion dollar loan to keep Lockheed afloat in 1971 (does that ring any bells?). Eventually Lockheed merged with Martin Marietta (maker of missles) to become the Lockheed Martin company known today, which survives pretty much exclusively on government money. If the US Military was not overseas expending missles and wearing out C-130 airframes, that segment of the company would not be profitable. ofc, they did have a huge blank cheque for a long time while the shuttle program was operational, but that's another story for another day.

Now look on the other side of the Atlantic. Back in the day, aircraft manufacturing companies were going under over there too. Britian and France both felt it was necessary to stay on the forefront of aircraft development, they got into bed together buying up local manufacturing companies and out of that came the Concorde. Wind the clock forward a whole lot of years, with lots of politics etc along the way (including copious quantities of money from various governements), and you have today's Airbus.

If you think that providing various forms of subsidy to manufacturers of aircraft is somehow unique to Canada, you are absolutely wrong and obviously not a student of history. There are no manufacturers today building civilian transport category aircraft that are not directly, or indirectly subsidized by government money. Some do it via commercial loan guarantees, some do it via outright purchase of product at inflated military pricing, others do it by simply owning the company outright, but they are all sucking at the public money teat in one form or another.
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rookiepilot
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Re: Quebec ready to support Bombardier

Post by rookiepilot » Fri Nov 23, 2018 10:26 am

Fine. Don't disagree it's systemic.

Canada simply isn't going to win that game. Period. Why beat your head against that wall?

In energy, The US is minting coin. We are introducing rules on Pipeline building that consider gender identity. Bizzaro world.
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Re: Quebec ready to support Bombardier

Post by Gino Under » Sun Nov 25, 2018 7:57 pm

There’s a rumour this evening that GM plans to shutdown their Oshawa plant.
If so, was bailing them out in 2008 a good idea? Probably not.
Would it be a good idea to bail them out again?
Actually, it doesn’t look like they’re even going to ask.

This is how you make America great again. By using Canadian taxpayer money.

Gino
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rookiepilot
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Re: Quebec ready to support Bombardier

Post by rookiepilot » Mon Nov 26, 2018 7:10 am

Gino Under wrote:
Sun Nov 25, 2018 7:57 pm
There’s a rumour this evening that GM plans to shutdown their Oshawa plant.
If so, was bailing them out in 2008 a good idea? Probably not.
Would it be a good idea to bail them out again?
Actually, it doesn’t look like they’re even going to ask.

This is how you make America great again. By using Canadian taxpayer money.

Gino
Our government is a very poor negotiator ---
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goldeneagle
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Re: Quebec ready to support Bombardier

Post by goldeneagle » Mon Nov 26, 2018 10:30 am

rookiepilot wrote:
Mon Nov 26, 2018 7:10 am
Our government is a very poor negotiator ---
Oh, I get it, all the financial problems in Alberta today are the fault of our federal government. If a ship loaded with Saudi oil arrives in the Gulf, American refineries are willing to pay on the order of $50 for a barrel of that oil. But if oil arrives via pipelines from the north, they only offer $15 a barrel, and the companies actually accept that offer. But somehow from your perspective, this is all the fault of our governments, and has nothing to do with the piss poor negotiating skills of the Alberta oil companies.

Then the folks get all upset because a few millions are sunk into a Quebec company in an attempt to preserve a fairly significant number of jobs in that area, that is apparently the end of the world for expenditures, and if you believe the rhetoric from Alberta, it all comes from transfer payments going west to east. Lets conveniently forget, those same taxpayers, of which I am one, have recently spent 4.5 billion (with a B) buying a pipeline to try help prop up Alberta oil prices by owning a pipeline that currently does take the stuff to a deep water port, and is in process of expanding to take a lot more, but there have been political bumps along the way. Funny how all the folks in Alberta view that expense as some sort of god given right, yet much smaller expenses elsewhere in the country are apparently on the backs of Alberta folks. that expense is nothing more than an attempt to make up for the poor negotiating skills of the Alberta oil industry.

And those 'friends' to the south you hold in such high esteem, are the ones making that offer for 1/3 market value, while at the same time accepting oil at much higher prices from other sources. With friends like that, who needs enemies ?

When the lumber industries in BC and eastern Canada were slapped with crippling tarriffs and quotas a long time ago, Alberta folks just shrugged and said 'not my problem'. When more recently the steel industry in the east was slapped with crippling tarriffs, again, the response out of Alberta was essentially a shrug, not my problem. But now, the same folks that slapped all the tarriffs on other industries have taken a hard line on oil pricing, and only offer a huge discount for Alberta oil, yet somehow they are the friends, and the folks spending billions to try help with that problem are the enemies. Go figger.

I thought the tweet we saw the other day, American President thanking Saudi Arabia for cheap 50 dollar oil, with no mention of Alberta 15 dollar oil really showed the true colors of your 'friends' to the south. With friends like that, who needs enemies ?
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Re: Quebec ready to support Bombardier

Post by rookiepilot » Mon Nov 26, 2018 3:41 pm

goldeneagle wrote:
Mon Nov 26, 2018 10:30 am
rookiepilot wrote:
Mon Nov 26, 2018 7:10 am
Our government is a very poor negotiator ---
Oh, I get it, all the financial problems in Alberta today are the fault of our federal government.
In a word, ------ Yes!

With a stroke of a pen pipeline issues could be solved, but won't.
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Re: Quebec ready to support Bombardier

Post by Gino Under » Mon Nov 26, 2018 7:08 pm

goldeneagle

Well said. :partyman:
Gino
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Re: Quebec ready to support Bombardier

Post by 7ECA » Mon Nov 26, 2018 7:52 pm

Alberta's current financial woes in relation to the oil sands have been decades in the making. The industry has always been boom and bust, and yet no one seems to remember that when the good times are rolling - except the busts have been getting bigger and longer...

Here's an article that'll annoy the heck out of "certain" members. They can feel free to link to some bullshit Fraser Institute or Rebel report if so inclined.

https://thetyee.ca/Analysis/2018/11/23/ ... ign=261118
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Re: Quebec ready to support Bombardier

Post by rookiepilot » Fri Dec 07, 2018 8:39 pm

Listen to what an expert in corporate governance says. Completely agree.
Bombardier's governance is literally third world. Hence large investors won't touch them.


https://business.financialpost.com/opin ... governance
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Re: Quebec ready to support Bombardier

Post by rookiepilot » Sat Dec 08, 2018 6:58 pm

https://www.thestar.com/business/2018/1 ... -ebbs.html

Bombardier's forecasts:

"For the company as a whole, Bombardier reaffirmed its month-old forecast for 2019 sales to climb about 10 per cent to at least $18 billion. The manufacturer expects to break even on a cash-flow basis, plus or minus $250 million. That includes $250 million for working capital contingencies in business aircraft as the company boosts production of the Global 7500, Di Bert said.

The company also confirmed its 2020 financial objectives, which include revenue of at least $20 billion and free cash flow of $750 million to $1 billion. Investors and analysts focus on cash flow because of the company’s need to pay interest on its debt, which was about $9.5 billion on an adjusted basis on Sept. 30."

:lol: :lol: :lol: :lol: :lol: :lol: :lol: :lol:

Gino, Golden eagle et all won't answer the obvious: What is wrong with the government helping a winning company like Viking instead?
Why are we picking winners?
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