RE: RE: Got a question ? - KuschI agree with your assessment. Any sustained higher valuation of the C$ definitely presents a headwind for Bombardier and any Canadian exporter by making it harder to sell their products internationally.
Since Bombardier exports about 97% of what it sells even with income from other countries helping a higher dollar makes live a little harder. Bombardier has to sell that many more planes to wring out the same level of profits.
Up to a point, it helps that the company is cutting costs, and increasing productivity. In fact, this is probably the only way companies can deal with it. They simply have to become more productive and efficient.
And this is precisely what Bombardier has been doing in recent years. In a way though, it seems a shame that such efforts go almost completely unnoticed as a result of being overshadowed by the rise in the C$.
Foreign sales to regions outside the U.S. - in both rail and aerospace help. It also helps that the cost of products from many suppliers in the U.S. such as avionics and jet engines tend to drop with a higher C$.
As does the hedging you mentioned. At least it staves off the damage temporarily. But as you point out, if the C$ remains persistently high in relationship to its U.S. counterpart, that makes life harder for Bombardier, and somewhat easier for its U.S. compeititors.
On the other hand. There are some signs of hope. As the U.S. economy powers back up foreign investors attracted to the many innovative U.S. companies from Wal-mart to Microsoft, will have to buy U$ in order to do that, and that will eventually stem the bleeding at least.
The CEO of Blackrock, one of the largest money managers in the world said we should be prepared for a return of the (U.S.) dollar. And that seems likely once the U.S. economy gets its legs more firmly under it and there's sufficient confidence in the economy that interest rates will begin rising once again. It may take awhile, but it seems an inevitable event at some point.
Before we become overconfident in the new-found strength of the C$ - and this may not be a popular assertion, but it is more than my opinion, its a verifiable fact:
https://www.msnbc.msn.com/id/20572828/ns/business-world_business/
"America remains by far, the most innovative, the hardest-working, and most productive country in the world."
You only have to take a glance at the long list of U.S. multinational companies, technology hardware/software pharmaceuticals, retail, technology, aerpsace etc...to see evidence of that innovation.
They may be down for the moment, but they'll be back.