Bombardier Inc. T.BBD.A

Just read the statements of full year

[BBDB859]

One metric that I'll be keeping an eye is Operating Expenses.

All of 2021 was roughly $350M. All of 2020 was $420

Let's see what next year will be like. This is important in a lot of ways. It tell us how effecient a company is. If they hire too many freeloaders doing nothing? Than our payroll goes up, and our margins go down. Of course there are other expenses involved in SG&A, like rents, sales costs, taxes, advertising, etc.. But the main component here is Salaries for both Production & Management employees.

I can't rely on 2020 Financial figures, but they only had a $70 M reduction year over year in SG&A. It's hard to know where the savings came from. But I'd like to see the SG&A closer to $300M yearly because this company traditionally gives money away to Employment. Although these are highly skilled jobs. I still believe they can tighten the ship in 2023 when Pearson is built. 13,000 Employees maybe a little high compared to their pears producing 120 planes yearly. IMHO. They can reach that production, with closer to 10,000 employees like some of their pears. 

Don't get me wrong. I fully believe in paying people well. But this company was notorious for INEFFICIENCY. This may still be a transition period for them, both on labour & PP&E because they are still going to raise production in 2023. But the Pearson plant will provide a lot of that effeciency without the labour intensiveness. It's getting interesting. I have a lot confidence in bot EM & BD to look at all these areas of production to create efficiencies. They also have to deal with Saint-Laurent for capacity. I would suggest that, they hold on to Saint-Laurant for a while till they know what their needs for Business Jets production, will really be, in the next couple of years. It's not easy to find land, and existing Facilities when you need them. I don't know how efficient or inefficient the Saint-Laurant Plant is? But I still believe they can Renovate faster (1 year), than to pay a company $600M (Pearson) to start from scratch on constructing a facility. 

Having said the above. Again I'm proud of the team, and looking forward to the progress in 2022.They will surprise a lot of people (Investors, Funds etc.) financially. I'm certainly surprised, that they made it to this point so fast. They're (EM/BD) working hard and the improvements are evident. GL to real Bomber believers

[clubhouse19]

Thanks for the opinion on the statements.   As to St laurent    I don't know how condusive that plant is with their plans going forward, but knowing the value of that property and how close it is to Trudeau airport, there is plenty of equity there on a real-estate level and I would they they would think hard before wanting to hold onto it .

[balmusette]

Eventually they could consider opening a new assembly plant in the U.S. or modify the Lear jet assembly plant if the backlog justifies it, and if the Quebec and Ontario plants can’t suffice for the task. E.M. said they could lose some sales if the new luxury tax Ottawa wants to adopt comes to pass. One way to bypass this inconvenient and expensive tax would be for a future owner of Global or

[BBDB859]

Great observation Balm. The US would be perfect to convert production to, for this type of Canadian Govt. tax grab, and vice versa.  In the end we have to find ways to protect ourselves, being one step ahead of these pitfalls.  [/quote]

[balmusette]

Thank you for your comments BBDB859 We are talking serious money here, I just re-read the article in '' argent entreprises'' a few minutes ago. It says that last friday E.Marlel was telling the interviewer Sylvain Larocque via telephone that this potential new tax was already putting in jeopardy 4 to 5 new contracts. [/quote]

[BBDB859]

Ya I heard that too. It is serious when consider that the Margins on Business Jets right now is 10% . If Trudeau wants the profit, by taxing BJ's 10%. Then We're working for nothing. The Family should close this division down too. The only question I have there is. Would they only tax the Planes sold in Canada, or world wide? I would think it's only in Canada. Because if it's world

[balmusette]

A 10% tax on a 75 million dollars jet is a lot. If Bombardier could find a way to send plane parts, engines, wings, fuselages...etc... by train to Wichita Kansas and do the final assembly at their Learjet facilities that are only used for service and maintenance now.  After the final assembly,these planes would be american planes and would be exempt from that canadian tax. I honestly believe

[balmusette]

...as he would have paid in Canada, without the luxury tax... [/quote]

[BBDB859]

The tax can't can't be higher than 1% on the net profit, or else, if it's on the gross, then it's no point in working for the nothing. I'm tired Gov'ts stealing from people. They just pocket it for their Pensions. [/quote]

[BBDB859]

Hey Club. Holding on to S-L is the way to go IMHO. Even if the Reno costs would be high. Your point is well taken, the plant is probably worthless or outdated. Though remember it's still cheaper than starting from scratch. Bin der done dat. Finding the property, rezoning it, then the construction time. These things take forever. If someone provides those properties turn key to you? Then you

[clubhouse19]

859 I have been to that plant a few times and it goes back to the 40;s and is presently in prime area on the island of montreal where land is no more. It's mission has changed especially since the loss of the C series.  IMO it will be let go and IMO there is no talk of it because it would bring on speculation in the Area. I belive the city of St lauerent is chomping at the bit for them

[clubhouse19]

One other thing that may induce the sale of that land and that is that there is a REM station in the Bois franc area that will have direct connection tp Montreal down town. IMO no way they will keep that plant with what irtt is worth for development and taxes.

[BBDB859]

Thanks Club. In light of that info then I say find the best use for the property and sell it, or keep it and Joint Venture it for say Residential. But not J-Venturing it in the manner they did with Airbus. I say that only because you say that there is a facility readily available to move into in Mirabel. Cheers

[lb1temporary]

Just a small observation: Operating expenses  :''But the main component here is Salaries for both Production & Management employees.''.... The production salaries are on the Cost of sales not on the Sales, general and administrative costs. So, the performance was pretty good for 2021. The margin was 924M$ VS 516 M$ in 2020 and the S,G &A expenses are down from 420M

[BBDB859]

[BBDB859]

Hi Temporary. Thanks for the observation. I tend to lump payroll into one sometimes when it comes to looking at Payroll expenses. When in fact, they fall into different parts of of the Financials, depending on type. This outfits statements I found in the past weren't clear on that. I was reffering to things in the post, as one general Payroll reductionon on Operating side, when a lot falls on