A Few Notes On The Rail PresentationThe rail presentation is the only one of the four (see my post yesterday where I linked the four presentations from Bombardier's website from the company's "Investor Day", Dec 2, 2010)
So far I've only managed to digest that one since yesterday, and I thought I'd share a few of my notes made on reading this to see if anyone else has a take on any of these points.
Page 3 says "BT is well-positioned in an attractive market" and subsequent pages go on to describe that effort, but with Bombardier's small, but growing facilities (they employ 170 people) near Sao Paulo, where competitor Embraer is headquartered you have to wonder. Especially since it seems likely that - with Bombardier having built the rail cars for Sao Paulo - some Embraer employees probably use those very cars to get to work.
It's certainly a good thing that each country can sell to each other despite long running disputes between Brazil and Canada at the World Trade organization over aerospace subsidies which were never really resolved. But then Air Canada did purchase aircraft from Embraer.
Page 5 describes how BT is now focused on "flawless execution'. What were we focused on before? ...flawed execution? And if we were always focused on flawless execution, what does that really mean in the context of the obstacles and challenges BT has seen in previous years?
Page 7 lists the V300 Zefiro VHS Train's features and not knowing much about these trains I wondered if there were features at which Zefiro did not excel. For that I guess I'll have to read the product descriptions for VHS at Alstom and Siemens. Interesting though that Bombardier now has its own High Speed Rail designs. I recall a time when all the company had to sell was technology it leased from Alstom. Perhaps that improved with the acquisition of the locomotive unit. Note: Previous to the Adtranz acquisition Bombardier had decided to exit locomotives and sold off its locomotive segmeent.
Page 15 talks about delivering on the "record backlog". While it's encouraging to see BT attract a large backlog, delivering on those orders and delivering with a minimum of problems and still trying to make a profit can be challenging. Many of these contracts go to various governmental departments which have a reputation for making last minute and costly changes along the way. This may be one reason investors give less weight to the announcement of new rail orders, and tend to wait until they see the proof in the form of something more tangible like actual earnings.
I was impressed with the description of the High Efficiency Permanent Magnet Motor on page 23 (Bombardier Mitrac Permanent Magnet Motor). I don't have any experience judging machinery on the basis of appearances, but from my limited personal experience with such things it looks like a thing of good quality.
On the other hand, you don't need to be an expert to notice who is buying this stuff. It doesn't take an expert to realize the Swiss, Germans, and Saudis don't buy low quality equipment.
I'll be back with a few more notes once I've digested the other three presentations.