Bombardier Inc. is temporarily halting production at its Canadian plants, sending 12,400 employees on unpaid leave as the plane maker suspends its 2020 financial forecast due to the COVID-19 pandemic.
The company said Tuesday it is stopping all non-essential work in the country, including aircraft and rail production in Quebec — where 9,000 workers are heading home — and Ontario.
The shutdown was set to start Tuesday evening and continue until April 26.
Bombardier, which carries a hefty debt despite multiple asset sales over the past five years, has cut all discretionary spending and “is pursuing additional measures to enhance liquidity,” chairman Pierre Beaudoin said in a statement.
The Montreal-based firm, reduced to a single revenue stream after announcing the sale of its rail division to French train giant Alstom SA last month, may face falling demand for new business jets amid the broader economic slowdown triggered by the novel coronavirus outbreak.
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The sale, made to help pay down Bombardier’s US$9.3 billion in debt, once again shrank a company that a year ago boasted three major divisions _ commercial aircraft, trains and business jets.
“It’s hard to see demand for new business jets holding up,” Financial Bank analyst Cameron Doerksen said in a phone interview Friday.
The COVID-19 crisis is dragging down corporate profits and equities markets, which both correlate strongly with demand for private planes, said Richard Aboulafia, an aviation analyst with Teal Group in the Washington, D.C., area.
Last week, Financial Bank lowered its delivery forecast for Bombardier business jets to 145 planes from 154 this year, and to 120 planes from 150 for 2021. The backlog for the Global 7500 — Bombardier’s new, ultra-long-range business jet listed at US$73 million apiece — remains healthy, with the aircraft sold out through 2022.
“The bigger issue is going to be the supply chain, because they’re very complicated pieces of equipment with hundreds if not thousands of suppliers,” said AltaCorp Capital analyst Chris Murray, noting the ripple effect of plummeting travel demand for manufacturers.
Looming on the horizon are debt maturities of US$1.48 billion and US$1.7 billion due in 2021 and 2022 respectively. About 60 per cent of the US$9.32-billion total debt is due within five years.
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The US$8.2-billion deal with Alstom and other recent transactions will leave Bombardier with net proceeds of between US$4.2 billion and US$4.5 billion after deducting the Caisse de Depot et Placement’s equity position, as well as adjustments for debts and other liabilities, Bombardier said in February.
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The deal is expected to close in the first half of 2021 if it can move through European Union regulatory hurdles.
Meanwhile delays and “some volatility” continue to plague several “large, challenging” rail contracts, said Alain Bellemare last month, shortly before his ouster as CEO announced on March 11.
Bombardier shares have hit new lows over the past week, hovering between 38 and 50 cents at their cheapest price in decades.
In the Montreal area, the affected factories sit in Mirabel, Saint-Laurent, Dorval and Pointe-Claire, and east of Quebec City in La Pocatiere.
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Executives as well as workers are forgoing pay, Bombardier said Tuesday. Board members have also agreed to forgo compensation for the remainder of the year.
Bombardier’s now suspended outlook from last month had projected revenue growth to US$15 billion from US$13.7 billion in 2019. The company also forecasted margins for earnings before interest and taxes of 3.5 per cent. Both figures fell below analyst expectations.
TORONTO – Canada Goose Holdings Inc. says it has signed a deal that will result in the creation of its first eyewear collection.
The deal announced on Thursday by the Toronto-based luxury apparel company comes in the form of an exclusive, long-term global licensing agreement with Marchon Eyewear Inc.
The terms and value of the agreement were not disclosed, but Marchon produces eyewear for brands including Lacoste, Nike, Calvin Klein, Ferragamo, Longchamp and Zeiss.
Marchon plans to roll out both sunglasses and optical wear under the Canada Goose name next spring, starting in North America.
Canada Goose says the eyewear will be sold through optical retailers, department stores, Canada Goose shops and its website.
Canada Goose CEO Dani Reiss told The Canadian Press in August that he envisioned his company eventually expanding into eyewear and luggage.
This report by The Canadian Press was first published Sept. 19, 2024.
Almost seven years since news broke of an alleged conspiracy to fix the price of packaged bread across Canada, the saga isn’t over: the Competition Bureau continues to investigate the companies that may have been involved, and two class-action lawsuits continue to work their way through the courts.
Here’s a timeline of key events in the bread price-fixing case.
Oct. 31, 2017: The Competition Bureau says it’s investigating allegations of bread price-fixing and that it was granted search warrants in the case. Several grocers confirm they are co-operating in the probe.
Dec. 19, 2017: Loblaw and George Weston say they participated in an “industry-wide price-fixing arrangement” to raise the price of packaged bread. The companies say they have been co-operating in the Competition Bureau’s investigation since March 2015, when they self-reported to the bureau upon discovering anti-competitive behaviour, and are receiving immunity from prosecution. They announce they are offering $25 gift cards to customers amid the ongoing investigation into alleged bread price-fixing.
Jan. 31, 2018: In court documents, the Competition Bureau says at least $1.50 was added to the price of a loaf of bread between about 2001 and 2016.
Dec. 20, 2019: A class-action lawsuit in a Quebec court against multiple grocers and food companies is certified against a number of companies allegedly involved in bread price-fixing, including Loblaw, George Weston, Metro, Sobeys, Walmart Canada, Canada Bread and Giant Tiger (which have all denied involvement, except for Loblaw and George Weston, which later settled with the plaintiffs).
Dec. 31, 2021: A class-action lawsuit in an Ontario court covering all Canadian residents except those in Quebec who bought packaged bread from a company named in the suit is certified against roughly the same group of companies.
June 21, 2023: Bakery giant Canada Bread Co. is fined $50 million after pleading guilty to four counts of price-fixing under the Competition Act as part of the Competition Bureau’s ongoing investigation.
Oct. 25 2023: Canada Bread files a statement of defence in the Ontario class action denying participating in the alleged conspiracy and saying any anti-competitive behaviour it participated in was at the direction and to the benefit of its then-majority owner Maple Leaf Foods, which is not a defendant in the case (neither is its current owner Grupo Bimbo). Maple Leaf calls Canada Bread’s accusations “baseless.”
Dec. 20, 2023: Metro files new documents in the Ontario class action accusing Loblaw and its parent company George Weston of conspiring to implicate it in the alleged scheme, denying involvement. Sobeys has made a similar claim. The two companies deny the allegations.
July 25, 2024: Loblaw and George Weston say they agreed to pay a combined $500 million to settle both the Ontario and Quebec class-action lawsuits. Loblaw’s share of the settlement includes a $96-million credit for the gift cards it gave out years earlier.
Sept. 12, 2024: Canada Bread files new documents in Ontario court as part of the class action, claiming Maple Leaf used it as a “shield” to avoid liability in the alleged scheme. Maple Leaf was a majority shareholder of Canada Bread until 2014, and the company claims it’s liable for any price-fixing activity. Maple Leaf refutes the claims.
This report by The Canadian Press was first published Sept. 19, 2024.
Companies in this story: (TSX:L, TSX:MFI, TSX:MRU, TSX:EMP.A, TSX:WN)
TORONTO – TD Bank Group, which is mired in a money laundering scandal in the U.S., says chief executive Bharat Masrani will retire next year.
Masrani, who will retire officially on April 10, 2025, says the bank’s, “anti-money laundering challenges,” took place on his watch and he takes full responsibility.
The bank named Raymond Chun, TD’s group head, Canadian personal banking, as his successor.
As part of a transition plan, Chun will become chief operating officer on Nov. 1 before taking over the top job when Masrani steps down at the bank’s annual meeting next year.
TD also announced that Riaz Ahmed, group head, wholesale banking and president and CEO of TD Securities, will retire at the end of January 2025.
TD has taken billions in charges related to ongoing U.S. investigations into the failure of its anti-money laundering program.
This report by The Canadian Press was first published Sept. 19, 2024.
