Breaking the grip
There was good news and bad news this past week about Bombardier Inc., the troubled transportation company that has left Torontonians waiting endlessly for new streetcars.
The good news is that the Toronto region and the province are finally taking concrete steps to end our destructive dependence on a company that has failed spectacularly to live up to its promises.
That came on Friday when Metrolinx confirmed it has turned to the French company Alstom to build 61 light-rail vehicles for transit projects in the Toronto area. It’s a deal worth $528 million.
This is a creative move that amounts to a completely justified vote of non-confidence in Bombardier.
Metrolinx and the province simply can’t be certain that the company will deliver vehicles in time for the scheduled opening of the Eglinton Crosstown LRT, given delays already plaguing the project. So the Alstom vehicles will be available to be deployed there if necessary, allowing the Eglinton line to open and potentially saving Metrolinx millions in penalties.
Bombardier’s repeated failure to deliver the new Flexity streetcars to Toronto on time, chronicled in detail in a recent Star series, means no one should trust its promises in other areas. Metrolinx has done the right thing by effectively buying an insurance policy for Toronto transit users and starting to get out from under the dominance of Bombardier.
The bad news about the company came out of Montreal, where the family that controls Bombardier made some reluctant concessions under heavy pressure from investors.
Pierre Beaudoin, grandson of the man who founded Bombardier, stepped down as executive chairman to become simply chairman of the board. In fact, he should have resigned completely given the shambles he has presided over in the past several years.
Aside from falling on its face in delivering streetcars to Toronto, Bombardier has stumbled badly in developing its C-series aircraft. It has asked for and received enormous subsidies from the Quebec and federal governments, adding to the billions of public money ($4.1billion, according to one study) it has taken over the years.
To add insult to injury, Beaudoin proposed giving senior executives raises of 50 per cent while cutting rank-and-file staff. Finally, the Quebec government, major institutional investors and the public cried foul, forcing Bombardier to postpone the raises.
Those same investors, including the country’s biggest pension funds, refused to support Beaudoin’s selection as chairman last week. That was a clear message to him to step down and let an independent, non-family-member serve as chairman. Instead, he took a tiny step back.
Bombardier needs a thorough shakeup at the top, not reluctant halfmeasures. Taxpayers have propped it up for long enough, and they deserve better.
The GTA and Ontario are finally taking concrete steps to end our destructive dependence on Bombardier