By Paul Vieira And Doug Cameron
Bombardier Inc.'s newly minted chief executive signaled Thursday
that he was moving swiftly to shake up the family-controlled firm
and its troubled aerospace division.
The Montreal-based plane and train maker announced fresh changes
to its executive ranks, just two months after Pierre Beaudoin, a
member of the family that controls Bombardier, stepped away from
the chief executive post to make way for former United Technologies
Corp. executive Alain Bellemare. Mr. Beaudoin is now executive
chairman.
The latest changes include the retirement of longtime Chief
Financial Officer Pierre Alary and the departure of Mike Arcamone,
who headed Bombardier's commercial aircraft division, where delays
in getting the new CSeries jet off the ground have weighed on
company performance. Bombardier said Mr. Alary would remain with
the company until a successor is named, while Mr. Arcamone had left
to pursue other interests. The departures follow the retirement of
Senior Vice President Steven Ridolfi shortly after Mr. Bellemare's
arrival.
To reignite sales of the delay-plagued CSeries program, which is
aimed at challenging the dominance of Boeing Co. and Airbus Group
NV in the 100-seat-plus passenger jet category, Mr. Bellemare
tapped Fred Cromer to head its commercial aircraft unit. Mr. Cromer
was president at International Lease Finance Corp., the world's
second-largest aircraft leasing company until it was sold last year
to AerCap Holdings NV, and before that ran that ran a U.S. regional
airline and headed fleet planning at two other carriers. Henri
Courpron, a longtime Airbus executive who worked alongside Mr.
Cromer as chief executive of ILFC before its sale, will serve as an
adviser, Bombardier added.
Mr. Bellemare is "definitely beginning to put his stamp on the
company and looking to change the culture," said Anthony Scilipoti,
president of Toronto-based Veritas Investment Research.
The changes "will instill a fresh perspective at Bombardier,
driving execution, alignment and intensity across the entire
company," the company said in a statement.
A Bombardier spokeswoman said Mr. Cromer and Mr. Alary weren't
available for comment. Attempts to reach Mr. Arcamone were
unsuccessful.
Analysts said Mr. Bellemare isn't wasting time in trying to
revamp Bombardier, whose CSeries program has weighed on margins and
eaten away at its cash pile. To bolster the balance sheet and
address market concerns about liquidity, the company recently
raised roughly $3 billion through an equity and debt issue.
The appointment of two aircraft-leasing veterans addresses
Bombardier's need to find new customers for the CSeries, analysts
added.
Regional airlines are key customers for the planned CSeries,
whose CS100 and CS300 models can seat up to 125 and 160 passengers,
respectively. U.S.-based Republic Airways Holding Inc. is among the
largest customers for the jet, but like other buyers has had to
revise plans as the jet's entry into service was pushed back by
technical and design problems. Mr. Cromer was formerly CFO of
ExpressJet Airlines, a U.S. regional that is now part of rival
SkyWest Inc.
The CSeries, originally scheduled to begin delivery in 2013,
won't begin flying until early 2016, the company said last month.
Meanwhile, development costs have mushroomed to $5.4 billion from
an original $3.4 billion price tag.
Another Bombardier spokeswoman said the company was working with
Russia's Ilyushin Finance Corp., which has pledged to acquire 32 of
the CS300 planes, to secure financing from a third-party. The
spokeswoman said Ilyushin's order remains part of the company's
backlog, but during meetings last week the Moscow company said it
was having trouble obtaining financing given the economic downturn
in Russia. A representative for the Russian aircraft lessor wasn't
immediately available for comment.
There remains time to identify a new financing source, given
delivery of the larger CS300 isn't expected to happen until
mid-2016, or six months after delivery of the CS100, the
spokeswoman said. Financing on such aircraft deals are generally
finalized several months before delivery.
Jon Ostrower contributed to this article.
Write to Paul Vieira at paul.vieira@wsj.com and Doug Cameron at
doug.cameron@wsj.com
Access Investor Kit for Bombardier, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=CA0977511017
Access Investor Kit for Bombardier, Inc.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=CA0977512007
Access Investor Kit for Fugro NV
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=NL0000352565
Access Investor Kit for United Technologies Corp.
Visit
http://www.companyspotlight.com/partner?cp_code=P479&isin=US9130171096
Subscribe to WSJ: http://online.wsj.com?mod=djnwires