How glimpse at competitor got Canadians who build transit cars on a faster track
When management talks of tough international competition, employees sometimes scoff at what they regard as corporate propaganda aimed at making them work harder. Raymond Royer, president of the Mass Transit Division of Bombardier Inc., overcame that skepticism among the workers at the company's subway car production plant at La Pocati`ere, Quebec, 75 miles east of Quebec City. He sent four of them to Japan to visit a competitor.
They saw how hard and intelligently the Japanese worked. It was winter, and the Japanese workers were assembling vehicles in a plant without central heat in Kobe, in northern Japan. When their fingers got too stiff to work properly, they ran to a stove to warm their hands.
``It solved many communications problems,'' Mr. Royer recalls. ``Then it wasn't management trying to force its ways down their throats. Then the competition became a real thing.''
La Pocati`ere workers had been complaining of the 60-degree F. temperature maintained in their plant in winter. Those complaints stopped.
Bombardier, perhaps better known to the public for its snowmobiles, has become a major competitor in the North American market for mass-transit vehicles -- subway cars (rubber- or steel-wheeled), commuter cars, light rail vehicles, and railway passenger cars. And it has done well.
At present Bombardier has orders for $1 billion Canadian (US $726 million) of such equipment, enough to keep its plants at La Pocati`ere and Barre, Vt., busy through the end of 1987. The company has delivered 60 of the 825 subway cars it is making for the Metropolitan Transportation Authority of New York. It is manufacturing 19 commuter cars for the Metro North Commuter Railroad Company of New York and 20 more such cars for the Department of Transportation of the State of Connecticut. It is also turnin g out 26 light rail vehicles for Portland, Ore.
Bombardier has not won any new transit car contracts since January 1983. But Royer says that the company ``is now ready to bid aggressively on other contracts.'' Indeed, Bombardier is negotiating with Via Rail (Canada's Amtrak) for the sale of 130 passenger railway cars for that crown corporation's trans-Canada run.
The transit division and the company as a whole are profitable. Last year Bombardier made $10.1 million, net of taxes, on sales of $515 million. This year sales should exceed $600 million and profits, according to brokerage estimates, will reach around $16 million. The transit division produces most of the profits. The company also sells recreational vehicles (Ski-doo, Moto-Ski), trucks and all-terrain vehicles for the military, and railway locomotives.
Bombardier's market studies show there are some 20,000 transit vehicles in operation in North America, with about 600 needing replacement each year. In addition, over the next 10 years an additional 400 cars per year will be needed for new transit systems, such as those in Portland, Houston, or the extension of the Washington, D.C., system.
The combined 1,000 cars per year will cost about $1 billion (Canadian), Royer figures. With the only surviving manufacturer based in America being Transit America (formerly Budd Company), a subsidiary of West Germany's Thyssen AG, Royer sees a ``huge market.''
Bombardier, however, is concerned about competition from abroad from such companies as Kawasaki Heavy Industries Ltd. and Tokiu Car of Japan, or Messerschmitt-B"olkow-Blohm GmbH of West Germany, or Alsthom-Atlantique and Franco-Rail of France.
Most are assured of their own domestic markets by various buy-domestic provisions. This gives them a good base for exporting to North America with well-made, relatively inexpensive cars.
Royer figures Bombardier must produce high-quality cars on time at competitive prices. So far it has done fairly well. It started delivering the New York subway cars a month early. They were taken out of service July 22 for a month of testing of two key electrical components supplied by Westinghouse. Royer says such problems are ``normal'' when new cars are put in service, and he expects the problem to be solved soon.
The decline in the value of the US dollar, with the Canadian dollar keeping track, should help Bombardier compete for contracts in Latin America.
Bombardier is reportedly looking into a joint venture with Japan's smallest automaker, Daihatsu Motor Company, to make its cars in Canada.