surfsup Posted February 13, 2020 Share Posted February 13, 2020 (edited) This is certainly unexpected. I wonder what this could bring for the UK, in particular Bombardiers Litchurch Lane and Alstom's Widnes sites, and Bombardier and Alstom's future bids (i.e the Bombardier Hitachi JV for HS2). https://www.urbantransportnews.com/alstom-to-acquire-bombardiers-rail-business-for-usd-7-6-billion/ (Apologies, I cant copy the wording into the forum) Edited February 18, 2020 by surfsup Title update Link to post Share on other sites More sharing options...
Fat Controller Posted February 13, 2020 Share Posted February 13, 2020 23 minutes ago, surfsup said: This is certainly unexpected. I wonder what this could bring for the UK, in particular Bombardiers Litchurch Lane and Alstom's Widnes sites, and Bombardier and Alstom's future bids (i.e the Bombardier Hitachi JV for HS2). https://www.urbantransportnews.com/alstom-to-acquire-bombardiers-rail-business-for-usd-7-6-billion/ (Apologies, I cant copy the wording into the forum) This merger was mooted about a year ago; both companies are worried about competition from Hitachi and a Chinese company. The stock-bulding capacity is important, but both are also involved in signallin, I believe. Link to post Share on other sites More sharing options...
25901 Posted February 13, 2020 Share Posted February 13, 2020 Glad it’s not gone to CRRC, their a nightmare to work with. 1 Link to post Share on other sites More sharing options...
david.hill64 Posted February 14, 2020 Share Posted February 14, 2020 Not really surprising: a Bombardier-Siemens tie up seemed likely before the Alstom-Siemens merger was attempted. Siemens might have a chance of surviving against the Chinese in a world market, but both Alstom and Bombardier are vulnerable individually. The next question will be whether the EU allows it as it will reduce competition within the EU. 2 Link to post Share on other sites More sharing options...
mdvle Posted February 14, 2020 Share Posted February 14, 2020 Bombardier has serious financial issues with a lot of debt ($9.3 billion) and has just exited the commercial aviation business with an announcement to sell it's stake in the A220 to Airbus. Bombardier also just posted an annual loss of C$1.6 billion, and has lost C$8.5 billion since 2015, and has struggled with rail contracts around the world (New York CIty recently pulled 300 new subway cars out of service for safety issues) Link to post Share on other sites More sharing options...
DY444 Posted February 14, 2020 Share Posted February 14, 2020 7 hours ago, david.hill64 said: .. The next question will be whether the EU allows it as it will reduce competition within the EU. If they time it right and Alstom get cute with subsidiaries registered outside the EU then the EU might not be able to do anything about it. Link to post Share on other sites More sharing options...
RMweb Gold 4630 Posted February 14, 2020 RMweb Gold Share Posted February 14, 2020 To use Roger Ford from Modern Railways analogy, as far as Widnes and Litchurch Lane are concerned the message from any merger is likely to be ‘give us a rolling stock order(s) or the kitten gets it’. There are potentially too many rolling stock manufacturers (aka assembly plants) in the country already to support the domestic market. The questions are, how many kittens will be left and where will they be based? 4 Link to post Share on other sites More sharing options...
Ron Ron Ron Posted February 14, 2020 Share Posted February 14, 2020 7 hours ago, mdvle said: Bombardier has serious financial issues with a lot of debt ($9.3 billion) and has just exited the commercial aviation business with an announcement to sell it's stake in the A220 to Airbus...... They’ve sold off various parts of their aviation business, in stages over the last few years. Firstly Airbus acquiring 50% in the CS series airliner, with a Quebec investment organisation also taking a slice. Then they sold the Dash-8 turboprop airliner division to Canadian company, Longview Aviation Capital (rebranded the turboprop range from Bombardier back to the original de Havilland Canada). More recently in the last 12 months, the CRJ regional airliner range has been sold to Mitsubishi and only a few weeks ago, it was announced they are in talks to transfer the lucrative Business jet division to the American aviation conglomerate, Textron corporation. The sale of Bombardier’s remaining shareholding in the CS airliner programme (now known as the Airbus A220 series) has also recently been completed. Now Bombardier Transportation (rail, trams, buses etc, ) is being carved up. Basically it’s a massive fire sale. . 1 1 Link to post Share on other sites More sharing options...
Ron Ron Ron Posted February 14, 2020 Share Posted February 14, 2020 This could put a bit of a spanner in the works for the first HS2 train fleet contract. The procurement process is well underway and the winner is due to be announced in several months time. There are currently 5 bidders, 2 of which are Alstom and the Bombardier+Hitachi joint venture. There were originally 5 bidders when the ITT closed last year, but when 2 of those, Bombardier and Hitachi, joined forces, CAF was added to maintain 5 bidders in the competition. With the year long selection process having progressed so far, I wonder if this takeover, effectively reducing the number of bidders down to 4, will create problems? The other bidders could cry Foul ! . 1 Link to post Share on other sites More sharing options...
mdvle Posted February 14, 2020 Share Posted February 14, 2020 3 hours ago, Ron Ron Ron said: They’ve sold off various parts of their aviation business, in stages over the last few years. True. While I haven't followed them closely it appears based on much of the commentary that an underlying problem is the ownership structure, where the founding family still retains control and has interfered in the running of the business, either directly or indirectly (retaining bad management). Certainly 5 years into a turn around management and still losing money doesn't look good on current management. 3 hours ago, Ron Ron Ron said: Firstly Airbus acquiring 50% in the CS series airliner, with a Quebec investment organisation also taking a slice. It's actually the Government of Quebec, that with the exit of Bombardier now owns 25%. It was also a "forced" sale, in that Boeing was doing things to try and prevent it's sale/operation in the US by filing trade disputes so the joint venture with Airbus was a solution to that anti-competitive move. 3 hours ago, Ron Ron Ron said: Now Bombardier Transportation (rail, trams, buses etc, ) is being carved up. Basically it’s a massive fire sale. The question is do they sell of both the Transit and private aircraft divisions, essentially ending the company, or are they seeing which option solves the debt problem best so they can retain 1 of 2. Both the Transit division and the private aircraft divisions have healthy order books. Link to post Share on other sites More sharing options...
woodenhead Posted February 14, 2020 Share Posted February 14, 2020 3 hours ago, Ron Ron Ron said: This could put a bit of a spanner in the works for the first HS2 train fleet contract. The procurement process is well underway and the winner is due to be announced in several months time. There are currently 5 bidders, 2 of which are Alstom and the Bombardier+Hitachi joint venture. There were originally 5 bidders when the ITT closed last year, but when 2 of those, Bombardier and Hitachi, joined forces, CAF was added to maintain 5 bidders in the competition. With the year long selection process having progressed so far, I wonder if this takeover, effectively reducing the number of bidders down to 4, will create problems? The other bidders could cry Foul ! . This is the difficulty when you have very long procurement processes and only a few companies capable of fitting the requirements. And as is typical of a capitalist economic structure, the various companies will eventually merge as the market around them closes and they seek out new means to maintain profitability in a maturing market. Link to post Share on other sites More sharing options...
m0rris Posted February 14, 2020 Share Posted February 14, 2020 35 minutes ago, mdvle said: Both the Transit division and the private aircraft divisions have healthy order books. Whilst the transit division has healthy order books, it is really struggling to deliver - see problems with SBB's Twindexxes continuing and the Aventra issues in the UK. The size of the aventra orders looks great but also present a massively risk of turning into an onerous liability on current form. 1 Link to post Share on other sites More sharing options...
RMweb Premium jjb1970 Posted February 17, 2020 RMweb Premium Share Posted February 17, 2020 I think it has been concerning for a while how our market will support the number of assembly plants. Ultimately the market will decide who will be the winners and losers but I really can't see the sectors escaping another process of being "rationalized ". On Bombardier it is a little sad as many of their products are pretty good, they expanded very quickly and it appears they will retreat just as quickly. In terms of problematic new tech and product lines their problems don't seem to be any worse than their rivals. It may be a good move for Alstom as it will establish them in a few markets they don't seem to be particularly strong in. Link to post Share on other sites More sharing options...
RMweb Premium corneliuslundie Posted February 17, 2020 RMweb Premium Share Posted February 17, 2020 As Bombadier is a Canadian company is the Canadian government likely to take an interest? Jonathan Link to post Share on other sites More sharing options...
Ron Ron Ron Posted February 17, 2020 Share Posted February 17, 2020 (edited) The Canadian national government didn’t take over or take any share in Bombardier Aeospace, with most of its manufacturing in Canada .....and aeospace was a (the) major component of the group. Bombardier Transportation, whilst Canadian owned, is based in Berlin, Germany ...so technically a foreign owned German company.....and has production facilities and carries out product development, all over the world. Africa: South Africa: Traction converter equipment factory at Isando, opened 2016.[33] Asia: India: Movia-car manufacturing and electrical component manufacture in Savli, Vadodara, Gujarat. People's Republic of China: Joint ventures with native companies Bombardier Sifang-Power (Qingdao) transportation Ltd., Changchun Bombardier railway vehicles Co. Ltd., Bombardier CPC propulsion systems Ltd. Thailand: BTS Skytrain, Bangkok Europe: Austria: Sites include Bombardier Wien Schienenfahrzeuge (former Lohner-Werke) Belgium: Passenger vehicles, at former BN Constructions Ferroviaries et Métalliques plant Czech Republic: freight rolling stock Denmark: Continues production of IC3 "flexiliner" passenger multiple units. France: Regional and suburban trains, metros, at former ANF Industrie plant in Crespin (north of France). Germany: Major facilities for production of mass transit, regional, and high speed passenger trains. Control systems.Diesel and electric locomotive manufacture. Sites include : Former LEW Hennigsdorf nr. Berlin Former Henschel & Son locomotive works in Kassel Former ABB Werk-Sued Mannheim - rail vehicle drive and control systems; passenger and signalling systems; inductive charging (PRIMOVE); as well as project management, sales and fleet management, and others. Former Waggonbau Görlitz plant producing Double-deck Coaches Hungary Italy: Production site for FS Class E.464 at former Tecnomasio plant in Vado Ligure Norway: Servicing of Adtranz products NSB Class 73 and GMB Class 71 built at former Adtranz factory in Strømmen. Also manufactures NSB Class 93 Poland: (Bombardier Transportation Polska), includes manufacturing site in Wrocław (former Pafawag factory), Katowice, Łódź and Warsaw. Romania: Underground trains in Bucharest, mass transport. Spain: Trapagaran Sweden: Production, engineering, development. Also manufactures Regina EMUs. Switzerland: Research and design - propulsion and bogies, also manufacture of high capacity (double decker) passenger vehicles. Sites include former Ateliers de Constructions Mécaniques de Vevey in Villeneuve United Kingdom: Derby Litchurch Lane Works - Manufacturing Turbostar, Electrostar and Aventra passenger multiple units and London Underground Stock, Such as, the S stock, 2009 Stock. North America: Canada: Engineering facilities in Saint-Bruno, Quebec and Millhaven, Ontario (former Urban Transportation Development Corporation facility); manufacturing facilities in Thunder Bay, Ontario (Fort William - former Canadian Car and Foundry Can-Car Rail plant) and La Pocatière (former Moto-Ski plant). Mexico: Ciudad Sahagún (former Concarril factory) - engineering and production site. United States: Manufacturing Plattsburgh, New York and former Adtranz (originally Westinghouse Electric) facility in West Mifflin, Pennsylvania. Oceania: Australia: Bombardier Transportation Australia Ltd - Dandenong, Melbourne, Victoria and Milton, Brisbane, Queensland South America: Brazil: Monorail manufacturing facility in Hortolandia São Paulo state. Edited February 17, 2020 by Ron Ron Ron 2 Link to post Share on other sites More sharing options...
mdvle Posted February 17, 2020 Share Posted February 17, 2020 (edited) 6 hours ago, Ron Ron Ron said: The Canadian national government didn’t take over or take any share in Bombardier Aeospace, with most of its manufacturing in Canada .....and aeospace was a (the) major component of the group. While the Canadian Government didn't do a "money for share in the project" like the Quebec Government did, the Canadian Government did provide a loan of $372.5 million. And then the Government promptly ran into a PR problem when it was revealed that the financially struggling Bombardier had rewarded the top 6 executives with a 50% increase in their compensation - going from $21.9 million to $32.6 million. 7 hours ago, corneliuslundie said: As Bombadier is a Canadian company is the Canadian government likely to take an interest? Doubtful. In addition to the above mentioned PR issue over executive compensation, public opinion in Canada (outside of Quebec) is distinctly anti-Bombardier. The chronic issues with the streetcar order for the TTC, and then Metrolinx, soured vote rich Ontario on Bombardier - not least because Toronto gave the order to Bombardier in a large part because "Canadian tax dollars should support Canadian workers" and Bombardier then turned around and outsourced a large part of the construction to a plant in Mexico (and, in a familiar pattern, it was that outsourcing that created the problems with the project). And it wasn't just the problems and delays, but that the management of Bombardier seemed out of touch with reality with their public announcements on the project's problems with the TTC management frequently not believing a word they were being told by Bombardier. Thus when VIA created a specification for their new equipment that was really meant to exclude Bombardier, and the contract went to Siemens, nobody cared. Sudbury has recently been sounding alarm over a lack of work for the Bombardier plant up there (primarily building the bi-levels and some of the TTC streetcar work), but it has been ignored by both Queens Park(*) and Ottawa. So with a minority government in Ottawa, problems brewing with the conflict between the need for pipelines and some public opposition (leading to protests that have effectively shut down much of CN Rail with the associated problems of freight not moving and the economic impact that will have, and all but 2 small parts of VIA Rail being shut down) , public anger over the behaviour of the Natives, and several other likely issues it would be a brave/foolish government that would want to add yet another issue that could lead to election disaster should the minority fail. *- there are several things that could be ordered for the TTC if Ontario really wanted to ensure the plant stayed operational, but it would be a tough sell to give the work to Bombardier politically. Edited February 17, 2020 by mdvle 1 Link to post Share on other sites More sharing options...
Ron Ron Ron Posted February 17, 2020 Share Posted February 17, 2020 (edited) https://news.sky.com/story/a-sale-of-bombardiers-rail-operations-to-alstom-would-raise-uk-job-fears-11936549 https://www.telegraph.co.uk/business/2020/02/17/7bn-alstom-bombardier-train-deal-raises-job-fears/ . Edited February 17, 2020 by Ron Ron Ron Link to post Share on other sites More sharing options...
DavidB-AU Posted February 17, 2020 Share Posted February 17, 2020 Bombardier agrees to sell rail unit to Alstom in $8.2 billion deal https://www.cnbc.com/2020/02/17/bombardier-agrees-to-sell-rail-unit-to-alstom-in-8point2-billion-deal.html 1 1 Link to post Share on other sites More sharing options...
mdvle Posted February 17, 2020 Share Posted February 17, 2020 So thus the final question, do they finish selling off the company or do they continue on making business jets. I wonder if Quebec taxpayers will be wondering what their $1 billion got them... Link to post Share on other sites More sharing options...
Ron Ron Ron Posted February 18, 2020 Share Posted February 18, 2020 1 hour ago, mdvle said: So thus the final question, do they finish selling off the company or do they continue on making business jets...... The talks with Textron are ongoing AFAIK. If a sale is agreed, that’ll be the last piece of the aircraft building side of the company to go. . Link to post Share on other sites More sharing options...
DavidB-AU Posted February 18, 2020 Share Posted February 18, 2020 1 hour ago, mdvle said: I wonder if Quebec taxpayers will be wondering what their $1 billion got them... Ultimately, shares in Alstom. 1 Link to post Share on other sites More sharing options...
david.hill64 Posted February 18, 2020 Share Posted February 18, 2020 18 hours ago, Ron Ron Ron said: The Canadian national government didn’t take over or take any share in Bombardier Aeospace, with most of its manufacturing in Canada .....and aeospace was a (the) major component of the group. Bombardier Transportation, whilst Canadian owned, is based in Berlin, Germany ...so technically a foreign owned German company.....and has production facilities and carries out product development, all over the world. Actually I think you'll find that although the practical headquarters of Bombardier Transportation is Berlin, the company has its registered HQ for tax purposes in the UK: Bombardier Transportation (Global Holding) UK Ltd. I remember the internal email coming round in 2015 informing staff (including me at the time). It's possible that Brexit might have caused a HQ staff are based in Berlin though. I left BT two years ago. 1 Link to post Share on other sites More sharing options...
RMweb Premium jjb1970 Posted February 18, 2020 RMweb Premium Share Posted February 18, 2020 I wonder who Siemens will look at next, given their marriage with Alstom is now off the cards (for a while Siemens and Alstom were lobbying to change EU antitrust requirements). Link to post Share on other sites More sharing options...
surfsup Posted February 18, 2020 Author Share Posted February 18, 2020 Alstom has put out a press release this morning explaining that a memorandum of understanding has been signed between Alstom, Bombardier, and the CDPQ. https://www.alstom.com/sites/alstom.com/files/2020/02/17/20200217_PR_Acquisition_of_Bombardier_Transportation_EN.pdf 1 Link to post Share on other sites More sharing options...
mdvle Posted February 19, 2020 Share Posted February 19, 2020 23 hours ago, DavidB-AU said: Ultimately, shares in Alstom. Nope. All the Quebec Government got was a stake in the C-Series, later renamed to A220, jet. With the sell off of that to AIrbus the Quebec Government holds 25% of the A220 project. The Quebec Government gets nothing from the sale of the Rail division. The Caisse de dépôt et placement du Québec (Quebec Pension Fund) bought part of Bombardier's Rail division in the past, and they are ending up with part of Alstom. But the transit system in Montreal they are funding (REM) went with Alstom for rolling stock last year, not Bombardier, so they invest on what is best and not necessarily what is good for Quebec workers. But it is questionable how much that share of the A220 is worth (the investment was C$1.3 billion, and the Quebec Government is already putting into place contingencies to write off C$600 million of it), and unlike a Bombardier jet program it is unlikely that Airbus sees any long term benefit in developing further aircraft in Montreal when the French / German governments and unions will apply pressure to keep further stuff in Europe. Link to post Share on other sites More sharing options...
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