Bombardier Keeps Airplanes, Drops Snowmobiles
Bombardier Inc., the Canadian company that makes Challenger and Lear business jets as well as commuter aircraft and railway products, will sell its Ski-Doo snowmobile business (which founded the company in 1942) and other recreational products lines to help raise $1.5 billion in capital to prop up the other divisions. The drastic action came three months after corporate fixer Paul Tellier took over as CEO. Tellier previously turned the tattered Canadian National Railway into North America's most profitable. "We felt it was the right thing to do, to take a more conservative view of our assets, to change the accounting methods in aerospace," Tellier told reporters. Bombardier, which owns aircraft plants in Wichita, Montreal and Toronto, didn't announce specific action at any of those facilities. Wichita, especially, has been under close scrutiny because of its high production costs relative to the other plants. Bombardier, as a whole, lost more than $680 million in the fourth quarter of 2002 and its stock value has plummeted to the point where it could potentially reach junk status. The company has 75,000 employees and is still controlled by the family of late founder J. Armand Bombardier, who started it with the precursor to the snowmobile. Although its roots are in Canada, Tellier wants it to start reporting its financial data in U.S. dollars, get listed on an American exchange and use American accounting methods.