Bombardier

Bombardier Inc. (IPA /bɔ̃baʁdje/) is a Canadian company, founded by Joseph-Armand Bombardier as L'Auto-Neige Bombardier Limitée in 1942, at Valcourt in the Eastern Townships, Quebec. It is a large manufacturer of regional aircraft, business jets, rail transportation equipment, recreational equipment and provider of financial services. Its headquarters are in Montreal, Quebec, Canada.

History

Joseph-Armand Bombardier was a mechanic who dreamed of building a vehicle that could 'float on snow'. In 1937, the first snowmobile was made in his small repair shop in Valcourt, Quebec.

Joseph-Armand Bombardier's breakthrough came in the mid-1930s when he developed a drive system that would revolutionise travel in snow and swamp. In 1937, Armand sold 12 snowmobiles—named the B7—and in 1942 opened the company l'Auto-Neige Bombardier Limitée.

The first snowmobiles were large, multi-passenger vehicles designed to help people get around during the long winter months. Snowmobiles were used in rural Quebec to take children to school, to carry freight, to deliver mail, and as ambulances. His invention served a very real necessity and soon business was booming. In 1941, Armand opened a large new factory in Valcourt. Then a major setback hit the growing business: the Second World War was well underway and the Canadian government issued wartime rationing regulations. Bombardier customers had to prove that snowmobiles were essential to their livelihood in order to buy one. To keep his business going, Armand switched gears and developed vehicles for the military. After the war, Armand experienced another setback in his snowmobile business. In 1948 the Quebec government passed a law requiring all highways and local roads to be cleared of snow; Bombardier's sales fell by nearly half in one year. Armand decided to diversify his business and make all-terrain vehicles for the mining, oil, and forestry industries.

Armand dreamt of developing a fast, lightweight snowmobile (the Ski-doo) that could carry one or two people. In the early 1950s, Armand set aside his dream to focus on developing his company's other tracked vehicles. But by the end of the decade, smaller, more efficient engines had been developed and were starting to come on the market. Armand resumed his efforts to build a 'miniature' snowmobile. He worked alongside his eldest son Germain, who shared his father's mechanical talents. Armand and Germain developed several prototypes of the lightweight snowmobile and finally the first Ski-Doo went on sale in 1959.

The Ski-Doo was originally called the Ski-Dog because Bombardier meant it to be a practical vehicle to replace the dogsled for hunters and trappers. But the public soon discovered the speedy vehicles that can zoom over snow were a lot of fun. Suddenly a new winter sport was born, centred in Quebec. In the first year, Bombardier sold 225 Ski-Doos; four years later, 8,210 were sold. But Armand was reluctant to focus too much on the Ski-Doo and move resources away from his all-terrain vehicles. He vividly remembered his earlier business setbacks that forced him to diversify. Armand slowed down promotion of Ski-Doo to prevent it from dominating the other products.

On February 18, 1964, J. Armand Bombardier died of cancer at age 56. He left behind a thriving business, but also one that had been focused on one person. Armand dominated his company, overseeing all areas of operation. He controlled the small research department, making all the drawings himself. By the time of his death sales of the company had reached dollar|C$" target="_blank" >^*20 million, which is the equivalent of C$160 million in 2004 dollars. The younger generation took over, led by Armand's sons and sons-in-law. The young team reorganized and decentralized the company, adopting modern business tactics. The company adopted the latest technological innovation—the computer—to handle inventory, accounts, and billing. Distribution networks were improved and increased, and an incentive program was developed for sales staff.

In 1967, L'Auto-Neige Bombardier Limitée was renamed Bombardier Limited and on January 23, 1969 the company became public following listing on the Montreal and Toronto stock exchanges.

Aviation

Under the management of Laurent Beaudoin, Bombardier's son-in-law, the company took over the Canadian government-owned Canadair aircraft manufacturing company after it had recorded the largest corporate loss in Canadian business history to form Bombardier Aerospace. To this was added de Havilland Canada from Boeing and the bankrupt Short Brothers and Lear Jet. The aerospace arm now accounts for over half of the company's revenue and is reportedly the third-largest civil aircraft manufacturer in the world behind the giants Boeing and Airbus.

Railway technology

In 1970, Bombardier acquired the Viennese company Lohner-Rotax, a manufacturer of snowmobile engines and tramways, and thus became involved in rail business. This section started to grow important in the mid-1990s in the renaissance of tramways or 'light-rail transit'. Bombardier acquired the assets and designs of American Locomotive Company/Montreal Locomotive Works, who continued in the locomotive business until 1985. They built the Class 170 Turbostar and Class 357/375/376/377 Electrostar trains which are widely used throughout Britain. They also built the Croydon Tramlink and Nottingham Express Transit trams and parts of Alstom's Eurostar trains. They are one of the companies which took over British Rail's R&D facilities after privatisation (the remainder largely being absorbed into AEA Technology and Alstom). They were part of a major consortium in the construction of the Eurotunnel railway cars, and also built new metro trains for a wide range of customers including the Toronto Transit Commission, the Commission de transport de la Communauté urbaine de Montréal, and the New York City Transit Authority (R62A, R142), and developed the Las Vegas Monorail system.

Bombardier is a UK Notified Body, under The Railways (Interoperability) (Notified Bodies) Regulations 2000, in one TSI area: rolling stock.

Bombardier Transportation also leads the development and production of the Acela Express train in a 75%–25% arrangement with Alstom. The train runs between Boston, New York City, Philadelphia, and Washington, DC. Bombardier provided carbody design and tilting mechanisms from its LRC ("Light Rapid Comfortable") line of passenger trainsets, and integrated a variant of Alstom's TGV propulsion system. This is the first high-speed rail line in North America, running at a top speed of 240 km/h (150 mi/h). To meet U.S. government "Buy American" regulations, final assembly of these trains was performed at Bombardier's U.S. rail car assembly facility in Barre, Vermont. Bombardier also provided seller-arranged financing to allow Amtrak to lease the trainsets rather than purchasing them outright as the railroad had previously done.

In 2001 Bombardier Transportation acquired Adtranz, making it the second largest manufacturer of railway rolling stock in the world. Depending on how one defines industrial activities, it is sometimes considered the largest in the world in this category.

Other

Bombardier was, until recently, a major Canadian defence contractor. With the latest restructuring the company sold off nearly all of its military related work in Canada. Military Aviation Services was sold to Spar Aerospace and land based defence products made by Urban Transportation Development Corporation ceased operations as Bombardier moved away from non-aviation defence products.

In 2003 it spun off as a separate company the Bombardier Recreational Products division, whose snowcats and snowmobiles had been the origin of the company.

Criticism

Bombardier has been criticised in Canada and abroad over the subsidies it receives from various levels of government. They have been described as corporate welfare and accused of violating free trade agreements, especially by Brazil. Canada and Bombardier have countered by citing Brazil's direct and indirect subsidies to Embraer, its own major aircraft manufacturer and one of Bombardier's principal competitors in the regional jet market.

The government of Canada provided a large interest rate subsidy for the financing that made possible Bombardier's sale of metro trains to the New York City Subway. Some Canadians object to such amounts of money being given to a private for-profit company, but the government argues that the subsidies create many jobs. Recently Bombardier opened an engineering design agreement with an Indian company which subsidy critics argue may result in a loss of jobs in Canada.

Bombardier's reputation may have been tarnished in the western United States by its association with the privately-funded Las Vegas Monorail system, which has been operational since December 24, 2004 but was plagued by delays due mechanical problems. The system reportedly lost States dollar|US$" target="_blank" >^*85,000 per day while closed over a period of four months.

Further more Bombardiers’ reputation has been tarnished in the eastern United States for shoddy craftsmanship in the manufacturing of the high speed trainset for Amtrak. The high speed fleet has been taken out of service twice by the FRA for safety-critical defect due to poor manufacturing and design. Also the design has need modification over a thousand times since coming into service.

Recently, some human rights and Tibet support groups in Canada, the U.K., and the U.S. have put pressure on Bombardier over its sale of passenger carriages to the People's Republic of China for projects including the controversial Qingzang Railway line into Tibet.

Also Bombardier has been criticized for the yearly procedure of moving assets (such as aircraft) from one Bombardier entity to another Bombardier entity and recording the transaction as revenue for the sole purpose of increasing annual bonuses of senior executives. The procedure was criticized as not being in the best interest of the shareholders although it received very little negative publicity.

Corporate governance

Current members of the board of directors of Bombardier Inc. are:

References

Descarries, Eric. "Autoneiges Bombardier: Des patenteux perpétuent la tradition". in La Presse. Monday, March 13th 2006.
MacDonald, Larry. The Bombardier Story : Planes, Trains, and Snowmobiles. Toronto : J. Wiley, 2001.

External links

Company website
Yahoo! - Bombardier Inc. Company Profile
V/LineCars.com VLocity 160 Page - Comprehensive information on Bombardier's VLocity 160 type diesel multiple unit train made for V/Line, the passenger rail service operator in the state of Victoria, Australia.
CBC Digital Archives - Bombardier: The Snowmobile Legacy

Bombardier | S&P/TSX 60 Index

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