Bombardier Inc. says it will cut another 1,600 jobs and stop making Learjets, a business jet that has been around for almost 60 years.
The Quebec-based aerospace company announced the moves in posting its quarterly financial results, which showed the company lost $337 million US in the last three months of 2020.
The job cuts will bring the company’s total workforce down to about 13,000 people around the world.
“Workforce reductions are always very difficult, and we regret seeing talented and dedicated employees leave the company for any reason,” said Éric Martel, the company’s president and chief executive officer.
“But these reductions are absolutely necessary for us to rebuild our company while we continue to navigate through the pandemic.”
About 700 of the job cuts are planned in Quebec and 100 in Ontario. A further 250 jobs will be eliminated in Wichita, Kan., where the Learjet is built. The rest of the job losses will be scattered across the rest of the U.S and Canada.
“The only thing the pandemic did was accelerate a sad ending,” aerospace analyst Richard Aboulafia with the Teal Group said of the Learjet’s demise.
Unifor, which represents 2,500 workers at a Bombardier facility in Montreal, is calling on the federal government to do more to help the aerospace industry survive the pandemic.
But many of Bombardier’s problems predate COVID-19.
The company is currently a shadow of its former self, having gone from an integrated transportation conglomerate that made planes and trains of all shapes and sizes, into essentially a niche maker of business jets.
Its CSeries business, which was touted as the future of the company when it first took to the skies in 2013, was sold to Airbus in chunks in 2017 and then again last year for virtually nothing.
It recently sold its train-making business to European conglomerate Alstom for $3.6 billion, much less than initially thought.
Today, the company’s entire business largely consists of making two types of business jets, the Challenger series and the Global series. The company sold 44 of those jets during the quarter, down from 52 in the same period the year before.
For the year as a whole, the company sold 114 jets: 59 Globals, 44 Challengers, and 11 Learjets.
Learjets were first sold and flown in 1963, based on a design by inventor William Lear who was inspired by military jets The company was eventually acquired by Bombardier in 1990, and more than 3,000 Learjets have been sold over the plane’s history.
More cuts expected
Lecturer John Gradek at McGill University’s aviation management program said he suspects the Challenger jet could be next to get the axe as the company streamlines its business to be as efficient as possible, in an attempt to save up to $400 million a year.
“The only way they can do that significant cost cutting is to drop product.”
In its outlook, the company said it expects this year to be a “transition year” but it expects revenue from selling jets to improve as the global economy recovers from COVID-19.
Analysts underscored just how uphill the company’s climb is looking right now.
“While Bombardier outlined a series of restructuring efforts to improve earnings and cash generation, the company’s current financial position highlights the significant heavy lifting that still needs to be done within the organization even after all these asset sales,” TD Bank analysts Kevin Chiang and Krista Friesen said in a note to clients after the news came out.
Bombardier shares slipped about 5 per cent to 89 cents on the Toronto Stock Exchange on Thursday, which values the entire company at about $1.6 billion Cdn. That’s against a total debt load of more than $10 billion.
In 2018, those same shares were worth about $5. The company’s all-time value peaked in 2000 at roughly $25 a share.
Gradek said the share sell off makes sense considering the company’s prospects.
“They’re becoming more of an elite business jet manufacturer and that’s not a very comfortable place to be in given that business travel is down and people are being more careful about where they are spending their money.”
The company’s cheapest, entry level jet now starts at $30 million, while other plane makers have come to market with much smaller business jets that come with a price tag between $1 million and $2 million.
“The market is saying: ‘I’m not sure that’s the way to go.'”
Canada potash project may cost BHP growth elsewhere
BHP Group is under pressure from Canada to greenlight a giant potash project when it makes a final investment decision by mid-year but some investors said the world’s biggest miner may obtain better returns by ploughing the funds elsewhere.
The fertiliser ingredient will be in oversupply over much of the next decade, crimping returns from the project, and BHP may be better off investing more in commodities like copper and nickel which are seeing booming demand from the adoption of electric vehicles and solar power, they said.
The Anglo-Australian company would ease investor concerns if it firms up a plan to sell a stake in the project, one investor said. BHP has said a stake sale was an option.
The Jansen project in Canada‘s Saskatchewan province is estimated to cost up to $5.7 billion in the first phase which is expected to take five years and have an annual capacity to produce around 4.4 million tonnes of potash with an estimated mine life of 100 years. It will have capacity for an additional 12 million tonnes in stages thereafter.
BHP has already sunk $4.5 billion into the project, its first foray into potash, led by previous chief executive Andrew Mackenzie. The world’s biggest miner estimates demand for the ingredient could double by the late 2040s to become a $50 billion market.
The project would be Saskatchewan’s largest investment ever, said the province’s Energy and Resources Minister Bronwyn Eyre.
“We’re cautiously optimistic that this year will bring good news for the project. We hope it’s full steam ahead,” she said.
BHP’s annual capital expenditure of as much as $1.1 billion for the project would be significant compared with the $6.3 billion it expects to spend this year, and some investors said the money could be put to better use.
“I can understand the logic of developing it to diversify the earnings stream and create a long-return channel,” said Ben Cleary, portfolio manager at Tribeca Investment Partners in Singapore, which owns BHP shares.
“But I would be surprised not to see the majority of capex spend on base metals, given how positive they are on the latter. Are they really going to put potash ahead of base metals?”
Market economics for potash currently are a challenge, say industry executives.
BHP would compete with Nutrien Ltd, Mosaic Co and K+S AG, all of which operate mines in Saskatchewan.
Nutrien has five million tonnes of idled potash capacity currently, Chief Executive Mayo Schmidt told Reuters earlier in May, though he expects rising demand to absorb that by 2030.
“Both Nutrien and Mosaic have latent capacity that could come on, and it’s certainly going to come on at better economics than a greenfield would,” Mosaic Chief Executive Joc O’Rourke told Reuters in an interview this month.
Some analysts, like Ben Isaacson of Scotiabank, though, are positive on Jansen.
The first phase would not significantly disrupt the market and the steady growth in global potash demand means the extra output will be needed by 2030, he said. Scotiabank in April pegged the probability of BHP approving Jansen’s first phase at 90%.
BHP chief executive Mike Henry has said he was not comfortable with the project’s spending but that a decision on its fate will be taken based on what it sees as the best use of shareholder capital. BHP declined to offer additional comment.
The silver lining in all the spending that has “de-risked” the project is that it may be easier for BHP to sell a stake, said one institutional investor who owns BHP shares and declined to be named because it was against his firm’s policy.
“They do need to start investing (more) in future facing commodities,” said the investor.
“They have said they may look to sell down the project once they have de-risked it. That sort of option could still be on the table.”
(Reporting by Clara Denina in London, Jeff Lewis in Toronto, Rod Nickel in Winnipeg and Melanie Burton in Melbourne; Editing by Muralikumar Anantharaman)
7 Reasons Why America Loves Doing Business with Canada
Canada is one of the United States’ most important trading partners. According to the United States Census Bureau, Bureau of Economic Analysis, the US exports over $300B worth of goods and services to Canada annually. It also imports over $300B worth of goods and services from the country every year.
In fact, the trade relationship between the two North American countries is the biggest in the world. The two nations have traded for over 100 years. And a strong trade relationship is prosperous for both countries.
So, what makes Canada such an excellent trading partner for the United States? Here are a few good reasons:
1. Geographical Location
Canada shares a large border with the United States. Trading with Canada is easy by road, boat, or air. Most of the economic hotspots in Canada like Toronto, Vancouver, and Calgary are just a short flight away from an American city.
2. Manufacturing Strengths
Canada has some exceptional exports thanks to its vast manufacturing strengths. Here are a few of its two products:
- Non-renewable Energy: Canada’s non-renewable energy exports like oil and gas are a significant part of its economy. Although falling gas prices have impacted this sector, Canada continues to depend on its gas and oil exports.
- Composite Manufacturing: You’ll find plenty of world-class options if you’re looking for advanced composite manufacturing in Canada regardless of your industry. The Canadian composite manufacturing industry serves many national and international clients in sectors such as defence, transportation, marine, aerospace, medical, industrial, energy, home appliances, construction, and more.
- Vehicle: Canada has a renowned automotive sector, producing light trucks, crossovers, SUVs, etc., with its technologically advanced factories. 95% of Canada’s automotive exports go to the United States.
- Aluminum: The Great White North produces some of the best quality aluminum in the world. The United States happens to be Canada’s biggest importer of aluminum.
- Meat and Dairy: Canada produces meat, beef, poultry, and dairy known for its quality. Unlike some countries, Canada doesn’t use harmful hormones in its meat industry.
3. Good Tax Treaties
Canada has many provisions that make business favourable for American companies. For example, a non-resident corporation that does not otherwise have a permanent establishment (PE) in Canada may do business without paying income tax on its profits. Canada also offers favourable corporate taxes, especially compared to the United States.
Aside from federal incentives, many provinces offer provincial incentives to do business in Canada. For example, many American films and TV shows are shot in Toronto because of lucrative tax enticements.
4. Favourable Exchange Rates
Not only is the Canadian dollar stable, but it usually hovers 20% lower than the United States. The favourable exchange rate makes it cost-effective for the United States to import goods and services from Canada.
However, the exchange rate isn’t so low that it discourages Canadians from travelling to the United States or buying American products. Many economists consider the exchange rate to be in the sweet spot.
5. Similar Culture
Canada speaks the same language, eats the same food, plays the same sports, and consumes the same entertainment. A similar coculture without language barriers makes it easier for Americans to do business with Canada.
Of course, there are some parts of Canada where French is the most popular language. Likewise, Spanish is more prevalent in certain places in the United States. However, these issues are easily overcome with business cards, translators, and technology.
6. Prominent Tech Industry
Many American technology companies are doing business with Canada because of the country’s prominence on the tech stage. For example, Toronto produces more tech occupations than the Bay Area, New York, and even Silicon Valley.
Toronto also has over 2,000 startups and over 14,000 tech companies. In the MaRS Center, Canada also has one of the world’s largest innovation hubs. Canada is also the first nation in the world to develop a national AI strategy. There are over 500 international AI firms in the country. The world’s biggest concentration of AI startups is in Canada.
Besides the national AI strategy, there is plenty of other support for tech development in the country that’s attractive to the United States. Canada invested $900m in high-tech innovation and funded startup incubators in 2015.
Additionally, Canada offers many tax breaks to companies for research and development. It also provides special visa programs for investors and entrepreneurs in the tech industry.
7. Qualified Labour Pool
Canada has the second-highest tertiary education levels worldwide for people between the ages of 25 and 34, according to the Organisation for Economic Co-operation and Development (OECD). Canada’s highly skilled workforce stands at nearly 1.5 million people. Canada’s tech talent is also ranked highly for diversity.
These are just some of the many reasons why the United States enjoys doing business with Canada. Even with the economic climate changing, you can expect the partnership between the two countries to stand the test of time.
10 Ways to Make Your LinkedIn Profile Stand Out in 2021 – Part 2
Last week I provided 5 suggestions on how you can make your LinkedIn profile, which in 2021 is a non-negotiable must-have for job seekers, to stand out. The suggestions were:
- Add a headshot
- Create an eye-catching headline
- Craft an interesting summary
- Highlight your experience
- Use visual media
I’ll continue with my next 5 suggestions:
- Customize your URL
Your LinkedIn URL (Uniform Resource Locator) is the web address for your profile. The default URL will have your name and some random numbers and letters (https://www.linkedin.com/in/nick-kossovan-647e3b49). Customizing your profile URL (https://www.linkedin.com/in/nickkossovan/) makes your profile search engine friendly; therefore, you’re easier to find. As well a customized URL invites the person searching to make some positive assumptions about you:
- You’re detail oriented.
- You’re technologically savvy.
- You understand the power of perception (Image is everything!).
James Wooden, one of the most revered coaches in the history of sports, is to have said, “It’s the little details that are vital. Little things make big things happen.”
To change your profile URL, go to the right side of your profile. There you’ll find an option to edit your URL. Use this option to make your URL concise and neat.
- Make connections
The more connections you have increases the likelihood of being found when hiring managers and recruiters, looking for potential candidates with your background, search on LinkedIn. Envision your number of connections as ‘the amount of gas in your tank.’
At the very least, you should aim to get over 500 connections. Anything below 500 LinkedIn will indicate your number of connections as an exact number (ex. 368). Above 500 connections, LinkedIn simply shows you have 500+ connections. Getting to 500 implies you’re a player on LinkedIn.
As much as possible, connect with individuals you know personally, have worked with, met in a professional capacity (tradeshow, conference), is in your city/region and industry/profession. If you’d like to connect with someone you haven’t met, send a note with your request explaining who you are and why you’d like to connect. (This’ll be my topic in next week’s column.)
- Ask for recommendations and skill endorsements
This is vital to making your profile stand out! Employers want to know that others think of your work.
When asking for a recommendation, or skill endorsements, think of all the people you’ve worked the past. Don’t just think of your past bosses; also think of colleagues, vendors, customers — anyone who can vouch for your work and professionalism.
Instructions on how to ask for, and give, a recommendation, can be found by going to the LinkedIn ‘Help’ field (Located by clicking on the drop-down arrow below the ‘Me’ icon in the upper right-hand corner.) and typing ‘Requesting a recommendation.’ Do the same for skill endorsements.
TIP: It’s good karma to write recommendations, and endorse skills, in return and to give unsolicited.
- Keep your profile active
LinkedIn is not simply an online resume — it’s a networking social media site. To get the most out of LinkedIn, you need to be constantly active (at least 3 times per week). Write posts and articles. Check out what is being posted, especially by your connections. Like and share posts that resonate with you. Engage with thoughtful comments that’ll put forward your expertise.
Join groups that align with your industry and professional interests. Groups are an excellent way to meet like-minded professionals with whom to network and share ideas and best practices.
- Check your LinkedIn profile strength
It’s in LinkedIn’s interest that you’re successful using their platform. Therefore, they’ve created a ‘Profile Strength Meter’ to gauge how robust your profile is. Basically, this gauge tells you completion level of your profile. Using the tips, you’ll be given, keep adding to your profile until your gauge rates you “All-Star.” For instructions on how to access your ‘Profile Strength Meter,’ use the LinkedIn’ Help’ field.
The 10 tips I offered is a starting point for building a LinkedIn profile that WOWs! Jobseekers need to make the most of their profile to stand out in a sea of candidates, sell their skills, and validate their accomplishments. Make it easy for the reader to get a feel for who you are professionally.
Nick Kossovan, a well-seasoned veteran of the corporate landscape, offers advice on searching for a job. You can send him your questions at firstname.lastname@example.org.
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