The Wall Street Journal
By Paul Vieira And Doug Cameron
Updated April 9, 2015 2:40 p.m. ET
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.
Original article can be found here: http://www.wsj.com
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