Cash flow, liquidity and bankruptsy protection........Now that Bombardier is actually making tangible financial progress and that the C-Series EIS is well received by the aerospace industry and, with Swiss reporting performance results ahead of expectations, the media is there again to remind us of something that was obvious to nearly everyone. Bombardier in 2015 might well have had to request bankruptcy protection because of a serious cash flow crunch.
The point is this: bankruptsy protection and outright bankrupsy are not the same, and a lot of steps are required before the later, especially in the contexts of huge capital outlays required to bring such huge projects to fruition (for a relatively small company).
Of course, should the C-Series have turned out to be an absolute dog, outright bankrupsy might well have been inevitable down the road for Bombardier.
When a small company (from a market cap point) invest huge amounts of capital into R&D ($5.2B+ with $2B in 2014 only) to develop a clean sheet design no other competitor has yet been able to match, while several technological development delay occured (sometimes completely out of its control).
The point is that, should the C-Series eventually become the huge success I suspect it will become, there will continue to be lots of media reportage to remind us at every small bump in the road of on how badly managed and how risky this company has become.
It took a lot of guts to get this far and yes the company narrowly missed having to prevail itself of bankrupsy protection, which would have only made it much more difficult to bring on board CDPQ and the province and, soon to be the Canadian government.
With now Bombardier holding the crown of aerospace technology for Canada, would it not have been a real shame to not take the huge risks required to get here?
As Bellemare stated earlier this year, it is this kind of guts it takes to move innovation forward!