Commuter Jet Joins Ski-Doos, Railcars at Bombardier
A COMPANY that began making tracked vehicles to conquer the snow and ice of Quebec's harsh winters has now conquered much of the world of transportation. In the last month, the aviation arm of Montreal-based Bombardier Inc. introduced a jet airliner, and its rail subsidiary sold new rolling stock to Amtrak.
The Regional Jet flew for the first time last week. It is built by Canadair Aerospace Group, a Bombardier subsidiary. The small commercial airliner carries 50 to 56 passengers. The company spent $275 million (Canadian; US$236 million) in developing the plane, cheap by aircraft industry standards because the design was basically a stretched version of its Challenger airplane.
Bombardier says it has carved out a new niche; there are no two-engine commercial jets that carry fewer than 100 passengers. The plane has a range of up to 1,600 miles, depending on the engines used. It is aimed at what the company calls ``long thin routes'' - that is, airports that are too small for bigger jets and are now served by propeller driven aircraft.
``We believe the Regional Jet will soon be contributing to the expansion of many airlines,'' said Laurent Beaudoin, chairman and chief executive officer of Bombardier. Privately, the company believes the small jets could change the way airlines operate, perhaps replacing the ``hub and spoke system.'' The theory is that the smaller jets could fly between points, bypassing large airports.
Three of the aircraft will be tested for certification in Canada and the United States. The company expects deliveries to start in the summer of 1992. So far there are ``100 orders and commitments'' for the jets, at a cost of C$16.5 million each, says Thomas Appleton, executive vice president of Canadair and the man in charge of the project.
Bombardier acquired Canadair in late 1986 when the federal government sold it as part of a privatization plan. Another government-owned aircraft firm, de Havilland Aircraft, was bought by Boeing. But high wages and a tough union have forced Boeing to put it back on the market. Canadair, under Bombardier's management, has prospered.
Bombardier was founded in 1942 by Armand Bombardier. He built tracked vehicles to cross snow. From those vehicles the firm built the Ski-Doo, the first snowmobile. Those were boom times. By the early 1970s the company was hit by stiff competition as more than 100 manufacturers rushed to cash in on the popularity of the all-terrain snowmobiles.
THE firm diversified in 1974 when it won a contract to build cars for Montreal's subway. It has since become a major manufacturer of railway rolling stock, including cars for the New York City subway. Some of its recent rail coups:
* A C$400 million contract to build passenger cars for Amtrak. The 140 two-level Superliner II cars will be built at plants in Quebec and Vermont.
* A C$155 million contract to develop and build subway cars for Boston.
* A C$650 million job for shuttle train railcars to be used in the Channel Tunnel between Britain and France.
* A C$190 million contract to build the high speed TGV train operated in France as part of a French-British consortium.
Bombardier is studying the feasibility of using the TGV system for a rail link between Montreal and Toronto.
In the air, Bombardier purchased the bankrupt Lear Jet Corporation last month. It also owns Short Brothers, an aircraft firm in Northern Ireland.
The company has been a success where it counts: on the balance sheet. ``Bombardier's profitability has increased for the past five years,'' says Jon Reider, an analyst with the brokerage house Richardson Greenshields in Montreal. He says the company has stuck to its strategy and it has worked.
``They want to be world leaders in each of their areas of operation. They are with Ski-Doo. They're also the leading manufacturer of trains in North America, and now they will be leaders in commuter jets,'' Mr. Reider says.
Bombardier has also been a leader in receiving Canadian and Quebec government grants and contracts. The Regional Jet program received C$80 million in repayable loans from Quebec City and Ottawa. The firm's most controversial contract was the Canadair maintenance contract for the CF-18 fighter jet, beating out a firm from Winnipeg, Manitoba. That is often cited by western Canadians as favoritism for central Canada.