The aerospace industry is an important aspect of a country’s economy. Bombardier Aerospace plays a significant role in the aviation industry within Canada as well as globally. Throughout the course of this paper, a critical analysis on Bombardier will be made focusing specifically on their success and failure with regards to airplanes. Bombardier commenced with humble beginnings and proceeded to become the world’s most renowned manufacturer of transportation goods. With their recent controversies, they faced hardships and adversity, suffering losses. Along their journey, up until their current position, Bombardier shows that it is a versatile company that has and is in the process of overcoming obstacles. Nonetheless, they have demonstrated that they are adaptable and persistent, qualities that many businesses covet and aspire to possess. The success and downfall of Bombardier, specifically Bombardier Aerospace, can be analyzed from a financial, political, and economical perspective to gain a better understanding of their strengths.
Looking at Bombardier Aerospace with a financial lens, one can recognize and evaluate its strengths, particularly in business strategy by assessing its profits and losses. The company’s effective strategy is to acquire other bankrupt businesses and restore them to success. This is how it became fruitful in its ventures and grew to provide for the majority of Bombardier Inc.’s revenues. In 1986, when Canadair was on the verge of bankruptcy and ready for sale by the Canadian government, Bombardier seized the opportunity and accepted the risks and rewards for the consequences of acquiring such an underperforming company. The key to Bombardier is that they understand the kinks of transportation on a more deeper level than most companies as well as having the ability to make nothing into something, and this is exactly what they did with Canadair. Bombardier was able to make Canadair much more competent and productive. With their reinvention of the Canadair planes, it attracted potential buyers and grew to become a significant company in the aerospace industry. This has become Bombardier’s vital business strategy that enables them to be the successful business that they are today. With their unique abilities to completely turnaround a failing business, they became popular and profitable, an essential goal in the business world.
When Bombardier began to face difficult obstacles, they took their unique ability of making a weakening business valuable again and applied it to their own business management system. One of their main adversities from a financial perspective, is the notorious CSeries project. The business failed to properly estimate the CSeries’ demand in the airplane market and hence, they were not able to secure orders from airline companies. The product focuses on the comfort of passengers while inflight, especially for customers seated in economy. It is technologically advanced and serves as a great competitive advantage in all its technicality. It is equipped with wider seats, more legroom, and luggage space in order for optimal comfort pertaining to the travelers. It is clear that while one of Bombardier’s main objectives was to ensure customer satisfaction, other airlines think otherwise. While the product itself is efficient and caters to consumer wants, competitors such as Boeing and Airbus are ultimately more favourable. Airline companies who were potential buyers, were just not interested in Bombardier’s new line since they wanted bigger planes which would allow them to fly more passengers, and obtain more profit, which was their main goal. Overall, the CSeries was intended for a more beneficial use to consumers, with profit as an added bonus. However, poor management has led the company to set back production of CSeries, further causing damages to Bombardier’s reputation. Yet, in the face of such adversity, Bombardier has demonstrated proficient abilities to get back on track and win the hearts of many. For instance, they took advantage of the positive market condition and refinance some of their debt by selling CAD $2.3 billion of senior unsecured notes. Additionally, their business strategy of involving Airbus proved to be essential and influential in their turnaround. With Airbus’ majority stakes in the CSeries program, they are able to have more legroom in negotiations and risk tasking. Their $1 billion plus deal with EgyptAir of selling their CS300 aircrafts has also renewed their confidence in becoming a reliable transportation company once again. Therefore, through analyzing Bombardier’s journey from a financial perspective, one can assess that their means of success comes from the acquisition of underperforming companies and turning them into profit making machines. With their losses on the CSeries line, they are still able to salvage what they can and get help from other companies.
Every business faces some form of difficulty at any point during their tenure of operations. Similarly, Bombardier has come across some hardships that have led to their downfall but they are still able to recover from it. Specifically, from a political outlook, the trade dispute between Bombardier and Boeing are an example of the obstacles that Bombardier faces. However, with their management and character, they are able to get back up and be successful. In April 2016, Bombardier won a contract to sell some of its CSeries airplanes to Delta Air Lines. A year later, Boeing filed a trade complaint against Bombardier, stating that the financial aid that they had received from the Canadian government was considered an unfair advantage that negatively impacted the U.S. After investigation by the U.S. Commerce Department, a 219% duty was imposed on Bombardier’s CSeries jets.
With the unfolding of these events, Bombardier’s management strategy held steadfast among the heated dispute. Delta Air Lines took a stance, stating that they would not pay the tariffs imposed on the aircrafts because they expect that the tariffs would not be maintained permanently. Bombardier has the support of Delta as a result, since they still want to purchase the planes yet refuse to pay duties. This means that Delta has full faith in the ability of the CSeries line to carry out their task, despite other companies’ unwillingness to buy them. Bombardier was also backed by the Canadian government in the sense that Prime Minister Justin Trudeau stated, “Certainly we won’t deal with a company that’s attacking us and attacking thousands of Canadian jobs.” He along with Quebec’s Finance Minister, is defending Bombardier and the Canadian aviation industry. Such prominent figures can be a driving influence towards Bombardier’s capability to overcome this adversity.
Since this is an ongoing issue, various elements have not been clarified and no conclusions have been completely reached yet. However, this dispute has resulted in a diplomatic row between the U.S., Canada, and the U.K. Canada has cautioned that they will break a deal involving the purchase of Boeing jets, and the U.K. stated that Royal Air Force purchases from Boeing could be in danger in the event that the duties are imposed. Thanks to the support of various parties in the political scene, Bombardier is able to hold its ground despite the vicious hits being thrown at them. This dispute involving Bombardier and Boeing shows that from a political standpoint, Bombardier has the ability to continue ploughing through operations and their reputation as a contributable and efficient member of society has won the loyalty of Canada and the United Kingdom.
On its own, Bombardier Aerospace, a division of Bombardier Inc., has a powerful and positive effect on the Canadian economy, showcasing their strengths from their origins up until the present. Tracing back to the start of operations, it has had a valuable impact on the Industrial Revolution and the Post-Industrial age. As Bombardier began to grow in the 1940s, its snowmobiles were the company’s primary feature. With the Industrial Revolution taking place during that time, the transportation industry was booming. In the 1950s in Canada, industrial work was at its greatest. Products such as airplanes, steel, and cars were mass produced. Bombardier was a prominent figure in this scene and as a result, largely affected the Canadian economy in terms of the industrial landscape. Hence, with their success, mainly Post-Industrial Revolution, another one of Bombardier’s strengths lie in their ability to leave a notable impression of themselves in history.
Fast forward a few decades and Bombardier still upholds its spot on the hypothetical influential manufacturing companies list. It contributes a whopping $29 billion to the GDP, which is a large amount. This depicts that it holds a significant position within the economy. With its success, Bombardier is able to create high value-added jobs for 20,000 Canadians, allowing for a stronger economy. In addition, it is also able to boost the value of the government in the millions of dollars it pays in taxes. They are essentially Canada’s ambassador for abroad as well with their total Canadian exports over $9 million a year. In 2014, Bombardier’s spending on goods and services in Canada, specifically pertaining to aerospace, was $1.8 billion. Here, lies Bombardier’s strengths. This shows that from the revenues Bombardier generates, a lot of it is put back into the Canadian economy, strengthening it further. All these statistics put together paint a big picture of Bombardier’s overall influential and significant contributions to Canada’s economy. Suffice to say, Bombardier is one of Canada’s driving forces behind innovation, finance, and exports. With all this in mind, from an economical view, one can see that Bombardier has been making every effort to contribute positively to the Canadian economy. Thus, these are more reasons as to why they are successful and persistent, despite being in the midst of controversy.
Bombardier is a stellar example of a thriving and versatile company that is operating on a high-risk, high-reward business model. As can be seen throughout this analysis, Bombardier is able to take risks and then reap the rewards later. They focus their business policies and management on strategic governance that Laurent Beaudoin, CEO of Bombardier at one point, had established. Throughout his years working for Bombardier, he stated that to ensure the thriving of entrepreneurial spirit, it was important to remove people’s fear of taking risks. Hence, Bombardier, originally a business that focused solely on trains and snowmobiles, ventured into their unknown – the aerospace industry, when they bought Canadair. Amidst their dispute with Boeing, their reputation and influential work allowed for support from the Canadian and British government, which will enable the company to come back from their losses and become successful once again. Their impact on and contribution to the Canadian economy in various ways was and is vital for the country’s continued growth and development. Thus, these premises prove that they are a robust and adaptive company that is willing to take risks to better the company’s position in the long run. They prove that when one hears that Bombardier is the world’s third largest aircraft maker, one is not surprised, but expects to hear it. Throughout the journey of Bombardier’s success and failure, their strengths are clearly visible from a financial, political, and economic viewpoint and thus, they will continue to be the resilient company that they are today.