Bombardier rules out full sale

[Rail Announcement]

http://railannouncement.zenfolio.com/blog/2015/4/bombardier-rules-out-full-sale-of-transport-division

[bikkuri bahn]

It would be stupid for Bombardier to get rid of their rail division.  I reckon railway equipment orders are more stable than aerospace, which are more sensitive to the vagaries of the air travel market, oil prices, etc.

[kvp]

Bombardier equipment has a few design issues, like some of their bogie types hitting their brake pads at higher speeds, since the rigging is not moving together with the axles and the brake discs. This is just one example, so orders haven't been arriving lately. (it's mostly siemens, alstom, stadler and japanse firms)

[bikkuri bahn]

Now this news, looks like a sale hasn't completely been ruled out (dated April 16):

Train manufacturer Bombardier has reportedly hired global financial services firms UBS Group and Citigroup to offer assistance for a potential initial public offering or sale of its rail unit.

Bloomberg reported citing people familiar with the matter that the potential transaction could be valued at approximately $5bn.

 

http://www.railway-technology.com/news/newsbombardier-reportedly-seeking-advice-from-ubs-citigroup-for-rail-unit-sale-4555322

 

I bet the people of Derby will be all up in arms about this.

[bikkuri bahn]

Bombardier equipment has a few design issues,

 

I wonder how much that is a symptom of company-wide issues, or one of specific issues within the various manufacturing plants, given the hodge-podge assembly of the rail division (adtranz, former BREL, BN, et al).

[Jace]

Interesting that the Quebec Economic Minister was the one that said Bombardier is not going to sell their rail division. A subtle way of saying that this proposal is not looked at favorably by Canada and Quebec in particular? Bombardier is of course very much a part of Quebec with their North American headquarters outside of Montreal and a plant in La Pocatiere. But even more important is that they are for all intents and purposes one of the most potent symbols of Quebec's strength. Taking that away would be a huge psychological blow.

 

Despite that, I'm not surprised by Bombardier's move. I think they see the writing on the wall: it's going to be very, very difficult for them to compete against Chinese firms like CNR who are starting to take on a greater global presence. CNR has already been announced as the winner of an order of subway trains in Boston. Their new shop will make them a serious player in the North American market. Bombardier has also had quite a few issues with contracts in North America as well as labor problems (strikes) at their shops in Canada. A recent strike at La Pocatiere was caused by concerns over work moving to lower cost facilities in Mexico. Tough to compete against CNR when you can't lower costs. Might as well sell while the price is high.

[bikkuri bahn]

So sell the rail division b/c the Chinese?  Talk about having no pride.  Oh well, I guess Bombardier is more interested in keeping their aircraft division afloat- selling the crown jewels for cash will help that. 

[HantuBlauLOL]

Edit: My bad.

Edited April 21, 2015 by HantuBlauLOL

[kvp]

Their main problem could be not having enough orders. All competing companies have better offers. Some are cheaper (the chinese), some are better (the germans and the swiss). Finding a price/quality point where people actually buy your products usually needs better technology than what everyone else has. Sadly Bombardier has slightly outdated train technology and very outdated aircraft technology with up front and operational costs that nobody really wants to pay as there are better alternatives. They don't really have any new orders, except the chicago and half the montreal contracts. The latter is not really successful, which leaves bombardier with only the chicago order. The european division has the traxx locomotives and a few trams as their only selling and actually viable products. The traxx are popular because they are much cheaper than Siemens tauruses and can replace 40 year old locomotives with a similar technological level and speed with slightly better performance. So both the US and the european factories have problems getting new orders. I can't say much about the Bombardier aircraft production, but Boeing and Airbus seem to have a much larger market share or maybe more visibility. Imho they could either sell the rail division to whoever wants it or try to compete by making better products. The latter needs more money to develop and implement new technologies, but this doesn't seem to be available. Actually the same is true for their aircafts, but at least they have invested in a new product for that division.

[Jace]

Bombardier's North American production is actually pretty well stocked for the next few years. The CTA 5000's are done but they have 300 cars for NY (R179( and 772 for BART. Both of these are just about to start production in Plattsburgh. In Thunder Bay they have the trams for Toronto (TTC and Metrolinx) plus a small order for Waterloo. La Pocatiere has the Montreal car work. The other CTA order (7000 series) that Bombardier appeared to win last spring was not awarded. Instead the CTA wants the job rebid. It seems that there's a desire to keep the work in state and give the contract to Nippon Sharyo/Sumitomo.

 

That said, I agree that they're not helping themselves with their products. I really get the sense that their expertise in design and manufacturing is slipping. Their focus doesn't seem to be in the right place.

[miyakoji]

Interesting to know about the order from Boston to CNR.  In a way I'm surprised this hasn't been in the news (I haven’t seen anything, anyway).  Any idea what the price differential is between their products and a comparable order from say Kawasaki in Yonkers?

[Densha]

Apart from Traxx locomotives, just take a look at these big European ongoing orders:

 

http://en.wikipedia.org/wiki/Bombardier_Talent_2 (367 EMUs)

http://de.wikipedia.org/wiki/Bombardier_Twindexx (135 double decker coaches)

http://de.wikipedia.org/wiki/Bombardier_Twindexx_Swiss_Express (62 EMUs)

http://fr.wikipedia.org/wiki/Regio_2N (197 EMUs)

http://en.wikipedia.org/wiki/SNCF_Class_Z_50000 (172 EMUs)

[Jace]

Bombardier's price was roughy twice CNR's as seen here: http://www.mbta.com/uploadedfiles/Business_Center/Bidding_and_Solicitations/Presentation%20to%20MassDOT%20Board%20of%20Directors%2010-22-2014.pdf. At the time the proposals went in Bombardier most certainly thought that they had the CTA 7000 work locked up giving them little incentive to place a low bid. Kawasaki also has a decent amount of work in place over the next few years, Rotem has almost nothing. The prices reflect that (and mind you, these are prices not costs). 

 

The contract has yet to be awarded as Rotem filed a suit against the T contesting the award. Bombardier and Kawasaki have joined in on the suit.

[Melandir]

Apart from Traxx locomotives, just take a look at these big European ongoing orders:

 

http://en.wikipedia.org/wiki/Bombardier_Talent_2 (367 EMUs)

http://de.wikipedia.org/wiki/Bombardier_Twindexx (135 double decker coaches)

http://de.wikipedia.org/wiki/Bombardier_Twindexx_Swiss_Express (62 EMUs)

http://fr.wikipedia.org/wiki/Regio_2N (197 EMUs)

http://en.wikipedia.org/wiki/SNCF_Class_Z_50000 (172 EMUs)

 

Also Bombardier has this order

 

http://en.wikipedia.org/wiki/Frecciarossa_1000 (50 new trains)

[bikkuri bahn]

I'm interested in the Swiss Express trainset- a double deck high speed unit with tilt.  Bombardier in Switzerland even had a job listing recently for a QC engineer position on their website, to liaison between Bombardier and SBB for this project.

[Densha]

It appears that the first Swiss Twindex unit is completed and doing it's first test runs in Germany now.

 

Something very peculiar about these EMUs is that the pantos are located above the driver cabs.

 

Some media:

http://www.bahnonline.ch/wp/80605/neue-doppelstockzuege-fernverkehr-bombardier-sbb-einigen-sich-auf-neuen-lieferplan.htm

https://www.facebook.com/media/set/?set=a.896854940365840.1073742343.102721199779222

http://www.railvolution.net/railvolution/hors-doeuvres.php?tag=fv-dosto

Edited April 21, 2015 by Densha

[kvp]

 

Something very peculiar about these EMUs is that the pantos are located above the driver cabs.

Not quite. They are located above the front bogies like on most pre war japanese emu-s. The trick is that these emu-s place the AC electrical equipment into the end cars like most swiss designed Stadler emu-s. This means that in case of an accident the transformer will be in front of the passengers and not the opposite. Transformer and electrical equipment placement is important when you have a double decker train, because there is almost no underfloor or above roof space. The air conditioners and traction controllers got stuffed above the bogies into half height boxes and the heavy equipment behind the cabs. This limits the train to two pantographs, since there are no other single deck spaces elsewhere.