TORONTO (AP) - Bombardier, the world's third largest plane maker, said Thursday that it will get a US$1 billion investment from the Quebec government and is reporting a $4.9-billion loss for the third quarter, mostly tied to its CSeries and Learjet 85 aircraft programs.
TORONTO (AP) — Bombardier, the world's third largest plane maker, said Thursday that it will get a US$1 billion investment from the Quebec government and is reporting a $4.9-billion loss for the third quarter, mostly tied to its CSeries and Learjet 85 aircraft programs.
Canada's largest aerospace company said Quebec has agreed to buy 49.5 percent of the program and acquire up to 200 million Bombardier shares. The investment will go toward the CSeries program, which is about two years behind schedule. Quebec committed to the project for at least 20 years.
Bombardier plans to sell a minority stake in the railroad unit to unidentified investors, with an announcement due soon.
The struggling Montreal-based company has turned in operating results that were substantially below expectations, which had already been low.
Bombardier had hoped to capture half the global market of 100-to-149-seat planes, and has marketed the CSeries plane as being 20 percent more fuel-efficient than the comparable Airbus A320 and Boeing 737 family of aircraft. The CSeries is critical to Bombardier Aerospace, which spent years designing the jet.
However, the CSeries has been an expensive and difficult project for Bombardier. The $5.4-billion program is billions over budget. The CSeries jet is scheduled to enter service by mid-2016. Bombardier says the jetliner is about 97 percent of the way through final testing, one of the last steps before the planes can be put into service at airlines around the world.
"This partnership (with Quebec) comes at a pivotal time, with the CSeries on the verge of certification," said Bombardier chief executive Alain Bellemare.
Bombardier said it will continue to operate the CSeries business and include its revenues and losses in the company's overall financial reports.
The Learjet 85 program — already put on hold so Bombardier could focus more resources on the CSeries — has now been canceled because of a lack of sales, the company said.
It's also continuing efforts to sell a minority stake in its rail equipment business, Bombardier Transportation, which sells subway cars and other mass transit systems.
Bombardier is the only company in the world that is a major player in both the aerospace and rail industries, each with global operations.
Bellemare was brought into the company as president and CEO this year with a mandate to lead Bombardier through a difficult transformation.
"We are taking the right actions and we have solidified our liquidity position, giving us the confidence to execute our long-term strategic plan," he said.
The third-quarter results include a number of items related to the transformation, as well as an accounting of how Bombardier's overall business has performed from July through September.
Adjusting for the CSeries and Learjet 85 losses and other items, Bombardier would have had a $2 million profit — essentially breaking even, down from $222 million or 12 cents per share a year earlier.
Revenue for the three-month period ending Sept. 30 fell to $4.1 billion, down $800 million from a year earlier.