RE:RE:RE:RE:RE:Entreprise familiale My name, there's no disagreement on the results and accomplishments of management. Well yes the debt is down but it's actually not from operational cashflow, it's from clean up balance sheet post BT and increased backlog (contracts). So unless there is more of that, it'll take a while to bring the debt down.
My main point is, if this was a US company and a new CEO were interviewed for example, the right candidate would not take the job IMO unless he were able to fix the balance sheet in short order by raising some equity or selling assets perhaps not all the way to the proper level but well on their way and certainly well within a 4-5 year timeframe. There would be no reason to leave the debt situation fester (Martel will be 4 years as CEO in April) ESPECIALLY that this has been Bombardier's Achilles heel for a very long time.
We talk about $100 stock which would be great but that target if achieved will be mostly on the back of debt reduction, balance sheet wizardry essentially. Not because they've doubled in sales and)or margins. That doesn't feel quite right to me because while the stock may get to $100, it did so taking risks that other stocks didn't.
If somebody is on time to an appt, nobody complains, everybody happy. But what if they drove 100kmh in 50kmh zone to make it on time? If they were to repeat that journey a hundred times, they might get a few accidents, speeding tickets if not worse. This is the basic concept in investing called risk adjusted returns.
Btw, the C series is a great achievement (I've flown on it as many have and it's great) and people say they couldn't afford it bla blah. Well if Bombardier had lived within its means, they would have been able to keep it, - they would have paying for the development from cashflow, and would not offer UA a low ball deal (that was basically a trap laid in Chicago). Over time they would have been vindicated of course by 737 MAX fiasco(s).
Can we be sure then. that if Bombardier had reasonable debt and positive operating cashflow, they would not have begun a new project like a smaller C series and now because of debt they can't and will be late to market or not at all because the cashflow is being spent on interest instead of new products.
Last but not least, as I said competitor's are quite happy this state of affairs. Please they are saying keep lending and refinancing Bombardier at high rates, this is a very good plan of record that has been working very well fo us for the past 15 years. G forbid they have no debt, they will take all aviation business.
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