Ottawa Citizen

U.S. SANCTIONS NATION'S LEADERS OVER COUP

Montreal enterprise sharpens focus on more lucrative Challenger, Global planes

- FRéDéRIC TOMESCO

The United States on Thursday imposed sanctions on Myanmar’s acting president and several other military officers and warned of more sanctions as Washington seeks to punish those it deems responsibl­e for the Myanmar coup.

The move blackliste­d those who played a “leading role in the overthrow of Burma’s democratic­ally elected government,” the Treasury Department said, targeting eight individual­s, including the defence and home affairs ministers, three companies in the jade and gems sector, and updating sanctions on the top two military officials.

President Joe Biden on Wednesday approved an executive order for new sanctions on those responsibl­e for the Feb. 1 military coup in Myanmar that ousted the elected government of Aung San Suu Kyi.

Bombardier is cutting about 1,600 jobs and ending production of the Learjet private plane as part of a drive to save US$400 million annually by 2023.

Manufactur­ing of the Learjet will end by Dec. 31, Bombardier said Thursday in a statement. The company also plans to consolidat­e completion work on its Global family of jets in Montreal and review options for underutili­zed hangars and industrial space at its Quebec facilities.

Pulling the plug on the Learjet — an iconic airplane whose customer list over the years included such stars as Marlon Brando, Sammy Davis Jr., Elvis Presley and Frank Sinatra, prompting the British Broadcasti­ng Corp. to call it “the private plane that changed travel” — will allow Bombardier to focus on its more profitable Challenger and Global aircraft families and expand its customer-services business. Demand for the Learjet, Bombardier's smallest business-jet family, plunged during the financial crisis of 2008-09 and never really recovered.

“This is a decision we did not take lightly,” Bombardier chief executive Éric Martel told analysts on a conference call.

About 700 of the job cuts will occur in Quebec, with another 250 in Wichita, Kan., and 100 in Ontario, Martel told reporters Thursday. Most of the staff reductions affect office employees. Bombardier moved corporate headquarte­rs from downtown Montreal to Dorval last year, slashing about 75 positions.

With more than 3,000 aircraft delivered since its debut in 1963, the Learjet “has had a remarkable and lasting impact on business aviation,” the CEO said. Unfortunat­ely, “the product has a lot of competitio­n. This is not a market segment that brings profitabil­ity right now.”

Bombardier's Wichita facility — where the Learjet is built — will continue to serve as the company's main flight-test centre and be a key part of its global services network. Bombardier said it will continue to support the Learjet fleet “well into the future.”

The cutbacks come less than a year after Bombardier announced the eliminatio­n of 2,500 positions. About 900 of those jobs still need to be cut, Martel said.

Asked about the situation at Bombardier, Quebec Premier François Legault said his government would do its best to preserve as many jobs as possible, though he ruled out state aid. Bombardier has no plans to ask Quebec for assistance because the company has sufficient resources at its disposal, Martel later told reporters.

Bombardier is sitting on about US$5.4 billion of available cash, having just completed its transforma­tion into a “pure-play” business-jet maker by selling its train business to France's Alstom SA. It's planning to repay about US$3 billion of debt in the coming months, Martel said.

Cost savings this year will probably reach US$100 million, rising to US$400 million by 2023, Bombardier said. The company will take a one-time charge of US$50 million in 2021 to “support its restructur­ing actions.”

Bombardier announced the Learjet decision as it reported fourth-quarter results. Its net loss for the period was US$337 million, down from a restated year-ago loss of US$1.72 billion.

Free cash flow generation in the latest quarter was US$523 million, which trimmed 2020 cash burn to US$1.9 billion.

Business aircraft revenue — fuelled by the ultra-long-range Global 7500 jet — is expected to grow “organicall­y” in 2021, Bombardier said. The Global 7500 should turn profitable this year and reach its “full potential” by 2023, chief financial officer Bart Demosky said on the call.

Free cash flow may not turn positive before 2023, Demosky said.

The company's widely traded Class B shares plunged 16 per cent to close at 61 cents in Toronto. The stock has lost more than half of its value in the past year.

“Bombardier appears to have a longer path toward free cash flow neutrality, versus what we had anticipate­d,” Stephen Trent, an analyst at Citigroup, said in a note to clients. The stock remains “a show-me story,” he said.

A “significan­t part” of improvemen­t in cash flow will come from debt reduction, Martel said. Bombardier had about US$4.7 billion of pro-forma debt at year end.

Bombardier said it expects to end 2021 with a workforce of 13,000 people, down from about 16,000 at the end of 2020.

The job cuts are designed to ensure that Bombardier is “profitable in the current market conditions, and prepared to scale up at a lower cost basis when the market recovers,” Martel told analysts. “Head count reductions are always very difficult. But these reductions are absolutely necessary for us to rebuild our company while we continue to navigate through the pandemic.”

While Bombardier is seeing “momentum” in the business-aircraft market, as evidenced by rising prices and a drop in used-jet inventorie­s, “it remains very difficult to predict a timeline to a full market recovery, which will not happen until borders reopen and internatio­nal travel restrictio­ns are lifted,” the CEO said.

Assuming there are no major setbacks on vaccine deployment, “it will likely take a few years for the industry to return to 2019 delivery levels,” Martel added. That year, Bombardier delivered 142 business jets. By contrast, Bombardier expects to deliver 110 to 120 business aircraft in 2021.

Bombardier will start building a production facility for the Global line this year in Toronto, Demosky said. Constructi­on will cost about US$150 million, to be funded partly with proceeds from land sales, he said.

The company is looking to shrink some factories, “but to do that we are selling a big portion of the land,” Martel said. Potential transactio­ns should bring in about $100 million in cash, his CFO said.

In Montreal, Bombardier has begun talks with unions to reduce the size of its four-millionsqu­are-foot manufactur­ing plant in St-Laurent, which is too large for the company's needs.

Executives will provide additional comments when Bombardier holds an investor day March 4.

(The Learjet) has had a remarkable ... impact ... the product has a lot of competitio­n. This is not a market segment that brings profitabil­ity right now.”

It is known that supplement­s can increase hair health and volume to some degree, but to find a supplement that can help increase new hair growth significan­tly, is rare. Still, this is what scientists are finding when studying palm fruits. A recent study was done in Malaysia with 38 people suffering from hair loss (alopecia)*. They were told to take a palm fruit extract containing a special ratio of “super-antioxidan­ts” called tocotrieno­ls. The results were surprising­ly good!

THE STUDY RESULTS

The scientists in the study suggested that the antioxidan­ts work specifical­ly to reduce scalp oxidation, a condition linked to balding. In sufficient time, this may allow for new hair to grow and hair count to increase.

In the study, most of the group showed increases of 10-25%, but 40% of the group had more than 50% increase in hair growth. Only one person did not have any results.*

 ?? JONATHAN DRaKE/BLOOMBERG FILES ?? Bombardier is ceasing manufactur­ing of the Learjet, which the BBC once called “the private plane that changed travel” and had illustriou­s customers from Sammy Davis Jr. to Elvis Presley. Demand for the Learjet never truly recovered from the financial crisis.
JONATHAN DRaKE/BLOOMBERG FILES Bombardier is ceasing manufactur­ing of the Learjet, which the BBC once called “the private plane that changed travel” and had illustriou­s customers from Sammy Davis Jr. to Elvis Presley. Demand for the Learjet never truly recovered from the financial crisis.
 ??  ?? Éric Martel
Éric Martel
 ??  ??
 ??  ?? *Tropical Life Sciences Research 2010 “Effects of Tocotrieno­l Supplement­ation on Hair Growth in Human Volunteers”Beoy, Woei et Hay,
University Sains Malaysia.
*Tropical Life Sciences Research 2010 “Effects of Tocotrieno­l Supplement­ation on Hair Growth in Human Volunteers”Beoy, Woei et Hay, University Sains Malaysia.

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