Pierre Beaudoin defends Bombardier against suppliers suing the company
The headquarters of Bombardier Aerospace in Montreal. (File photo)
It was while brandishing a document from 2012 that the lawyer for the aeronautical firm Cormer, Mr. Alexander De Zordo, declared that he had in his hand the “smoking gun”, which is irrefutable proof that Bombardier had cheated his client. knowingly halting production of the Learjet 85 aircraft in January 2015 and ultimately ceasing production of the aircraft altogether ten months later.
The chairman of the board of directors of Bombardier, Pierre Beaudoin, was then in the box of witnesses, before the Superior Court, Tuesday, to defend the decision of his company to drop the luxury device, which was to retail for around $17 million.
Bombardier had built a factory in Querétaro, Mexico, in 2010, to manufacture the fuselage of the aircraft and Cormer had obtained a contract from the Quebec aircraft manufacturer to supply it with components. Bombardier had demanded that the Winnipeg aeronautical firm also build a factory in Querétaro and Cormer had inaugurated his factory on January 14, 2014 across the street from that of Bombardier.
A year later, Bombardier announced that the luxury aircraft project was on hold and then, in October 2015, shelved the project for good, abandoning its suppliers.
Cormer is claiming $12.4 million with interest from Bombardier in compensation and another supplier, AviaComp, is claiming $4.2 million with interest. In the latter case, the French firm had already manufactured parts for the device.
The Chairman of the Board of Directors of Bombardier, Pierre Beaudoin. (File photo)
Pierre Beaudoin explained that the idea of putting the project on hold was first presented to the board of directors in October 2014. He was then executive chairman of the board and president and chief executive officer of Bombardier. . The final recommendation was presented on January 14, 2015 and announced the following day.
The decision to abandon the project had cost the Quebec multinational US$2.6 billion, which had been swallowing up between $300 and $400 million per year since its launch in 2007. Pierre Beaudoin acknowledged that the company had misjudged the market for this type of device, expecting a turnaround that never came after a collapse on the fringes of the 2008 economic crisis.
It was known in the industry. It was no secret that the ''light airplanes'' (of which the Learjet 85 was a part) was in trouble, he explained. But Bombardier analysts took a long time to admit they had been overly optimistic.
Until October 2014, in an interview granted to analysts and specialized journalists, he had ruled out the possibility of abandoning the Learjet 85, while adding: I cannot say that the demand is as strong as it is. she was. Almost at the same time, business aircraft management asked the board to consider putting the project on hold.
Bombardier's current President and CEO, Éric Martel, will testify on Wednesday 25 January. (File photo)
In a tough cross-examination, Me De Zordo confronted Pierre Beaudoin with a strategic orientation document from Bombardier's business aircraft division, prepared in 2012, in which several scenarios were mentioned for this device.
This document, prepared almost two years before the construction of the Cormer plant, presented several scenarios, including those of delaying production of the Learjet 85 or even ;cancel the project completely.
Already, the launch of the aircraft scheduled for 2013 was destined to be delayed and, ultimately, a scaled-down version of the aircraft would have finally entered service in 2017 and the production of the more expensive version. was planned for 2020.
Until the end of 2014, Bombardier continued to inject hundreds of millions of dollars at a loss into the project, betraying its optimism towards a market which, even in 2022, has never recovered. its flight: If we put this kind of money, it means that we are convinced.
A Bombardier C Series aircraft. (File photo)
Never mind, Me De Zordo cited other documents dating from 2013 and 2014 where the scenarios of suspension or abandonment of the project were present. Several of these internal documents, of which Pierre Beaudoin said he was unaware, reported numerous technical problems under development.
The lawyer sought to have the witness say that these problems, combined with the major financial pressures that Bombardier had imposed on itself by developing two other planes in parallel, the Global 7000 and the CSeries, were as many signals of alarms that the project was doomed and that Bombardier knew it.
Pierre Beaudoin repeatedly argued that the development of a new aircraft always presented technical difficulties given the complexity of such a project. He also maintained that Bombardier had the financial capacity to support the three projects at the same time.
He repeated many times that the decision to drop the Lear 85 was strictly related to lack of demand: If we had seen a potential market for the Lear 85, we would have completed it, he hammered.
The current President and CEO of Bombardier, Éric Martel, is scheduled to testify on Wednesday. He was president of the business aircraft division when the company ended the Learjet 85 project. He had left Bombardier to become president and CEO of Hydro-Québec in 2015 before returning to lead the Quebec multinational in 2020.