Beaudoin Tightens Reins at Bombardier

 - July 31, 2014, 12:51 PM
Bombardier CEO Pierre Beaudoin

Bombardier CEO Pierre Beaudoin now will exercise more direct oversight of the three units that comprise the company’s Aerospace division, after years of what he considers substandard performance, the Canadian executive conceded during Bombardier’s second-quarter earnings conference call on Thursday. On July 23 the company announced plans to restructure itself into four segments, a move that will see the dissolution of the Aerospace unit and layoffs of some 1,800 nonproduction-related employees “in the coming months.” At the same time, the company announced the retirement of Bombardier Aerospace president and chief operating officer Guy Hachey.

The new organizational structure now consists of Bombardier Commercial Aircraft, Bombardier Business Aircraft, Bombardier Transportation and Bombardier Aerostructures and Engineering Services. All four segments report directly to Beaudoin.

“Yes, I want to have a more direct, hands-on role on each of the divisions,” said Beaudoin. “Also, we’ve invested a lot in new products over the last few years, and we feel that it’s important to have business units directly reporting to our corporate so that we can benefit from these large investments that we have made…and monitor them more closely.”

Hachey leaves the company after six years as COO and during a period in which flight-testing of the company’s most high-profile and costly airplane, the CSeries, remains suspended while Pratt & Whitney validates a so-called fix to its PW1500G engines. An oil seal problem caused the failure of one of the engines on the first flight-test vehicle during ground runs, resulting in damage to the airframe and the indefinite grounding of the entire fleet.

Beaudoin said Pratt & Whitney has finished devising and validating a solution to the problem and that Bombardier engineers continue their evaluation of the “fix.” Meanwhile, the company has installed modified engines on Flight Test Vehicle 2 (FTV2) ahead of planned resumption of flying “in the coming weeks.”

“Now our team is examining the solution, asking the proper questions and taking the time to make sure that, from a Bombardier perspective, we can have a safe return to flight; we should make a decision shortly,” he insisted. “This is a technical evaluation we are doing and we may have more questions for Pratt before we make the decision.”

Beaudoin also reiterated that the company continues to plan for first delivery in the second half of next year. “We know there are events that happen in flight test—one of them was the engine event. But we still feel confident that we’re within the window we gave you.”

Also still to be determined is a revised target date for certifying Bombardier’s new Learjet 85. The new business aircraft made its first flight on April 9, around four months behind schedule and the airframer has yet to confirm whether the delay will push back anticipated service entry.