Q. I’m hearing from the market, and I’m sure you have too, that Bombardier has to restore confidence of the customers. They need to be assured Alain Bellemare has the freedom from the Beaudoins that he’ll be able to do the deals that need to get done. He needs to solve the revolving door issue of key personnel. What do you tell the market?
A. What we say to the customers is clearly Pierre clearly made this decision. He decided to move up to the executive chairman position. He’s focused going to focus on transportation, he’s going to focus on mergers and acquisitions, corporate finance activities. He’s brought Alain Bellemare in because of his vast experience in aerospace.
I can tell you from being in one of the first meetings he’s had with the commercial aircraft team is that he understands the market form the beginning very well. He understands our products very well. He was a company that supplies a big chunk of the CSeries in terms of supplier contribution.
The good thing is that he comes in with that vast wealth of experience. He has a lot of connections and an understanding of the commercial aircraft market, which allows him to begin making decisions right away. It’s not like in many instances where you had a new CEO coming in he’d need a period to understand the business and get educated. That’s not the case. He’s able to see what we’re doing. It’s good for us because he’s able to look at it from an outsider’s perspective to a certain extent as well and give us direction as to where we could use improvement. What we tell customers is the important thing is we’ve got someone with vast experience who’s coming in, and it’s additive to the team, it’s not something that takes away from the team. I think they’re generally comfortable with that.
Q. One of the things I’ve heard over the last two years from the market is that one of the things that has inhibited sales of the CSeries has been Bombardier’s unwillingness to be flexible in terms and conditions and an unwillingness to drop the price. That comes inherent with a buyer. Bombardier certainly didn’t have the balance sheet that an Airbus or Boeing or even an Embraer would. Nearly universally the market said this is because the C-Level and Executive Level have turned down deals Bombardier could have had if they had been willing to be flexible. Will Alain have the flexibility that Bombardier hasn’t had in the past,
A. I certainly think so. The other thing to remember is some of those comments may be left over from the period when we had the aerospace structure in place. If you remember, we had Commercial Aircraft with Mike (Arcamone) and then you had Guy (Hachey) with Aerospace above that and then there was another step to corporate. What that meant is when we had a transaction that was large or had a sufficient level of discount in it, we would have to go up the chain and we’d have to go from Commercial Aircraft up to Aerospace and then from Aerospace potentially up to corporate. It meant that things were a little slower to get done. In July when we took that level out, it changed things markedly. We inside the company saw a difference right away in terms of our ability to deliver to customers much quicker and to come up with ingenious solutions to the issues that we face. I think that’s more of a historic perspective on where we were. It was when we had the Aerospace structure in place. We made changes in the third and fourth quarter. It takes time to implement those changes but now that we’ve used to them I think we’re definitely a more agile company. I myself am in charge of some restructuring internally with respect as to how we get approvals and how we track our deals [and] it’s having some positive affects things.
Q. When you talk about ‘ingenious’ structures, can you be more specific?
A. I can’t really be more specific. I think we’re a lot more willing to listen and a lot more willing to come up with solutions we need to come up with to satisfy our customers.
Q. Does the $1bn in financing and another $1bn you want to raise provide you the balance sheet you need for deals, or does this just get you across the finish line?
A. You should probably raise that with…investor relations, but that’s definitely a positive, something that will help us in a number of ways.
Q. The revolving door with key personnel has been another problem that’s concerned the market place. Alain hasn’t been on the property for even a month yet, maybe a little more. Tell us, how do you get the personnel you need while everybody is sort of in this wait-and-see mode? It seems there is a bit of a Catch 22 mode: you want to get good personnel but they want to see that the changes are there before they come.
A. I think some of that commentary, we put a more robust sales structure in place about a year-and-a-half ago, and we implemented a structure where we have vice presidents of regions and regional vice presidents under that, that are closer to the region and run the region. They moved me into a role internal which is responsible for product marketing and asset management and a number of other things. It was all of that restructuring that would have been visible to customers. When you explain to customers what we’re really doing, and that we’ve built a more robust structure and they understand it, they’re positive on it.
Q. You’ve got a customer backlog that through no fault of [Bombardier’s] has become a little more risky. We all know what’s happened with Russia and Ukraine. A lot of your backlog seems to be a bit of a risk factor now.
A. I think we’re quite pleased with our backlog. The political issues in Russia, we follow closely, but we don’t see any change to orders we’ve secured there. We monitor [sanctions, the ability to finance airplanes] closely, but at this point, our customers who have signed for the airplane are very much moving forward.