Bombardier’s Skeletons Draining Cash From Alstom

Zwei knew all would not be happiness with Alstom’s acquisition of Bombardier Inc. Lingering court cases, lawsuits and other criminal intrigue with the Yongin and Kuala Lumpor ART systems (that is SkyTrain in TransLink Speak) and other issues pertaining to the now called Movia Automatic Light Metro System (erroneously called SkyTrain), must be causing acute indigestion with the new owner.

One wonders is the proprietary MALM light metro is one of those skeletons? With only one customer for the aging light-metro and no sales for over 15 years, one wonders if Alstom will “cut and run” and abandon production, freeing up production space for more lucrative transportation products.

It certainly fits the reason why TransLink hired a glorified spin doctor from the USA and not a person with credible transportation credentials as the new CEO.

When I asked a transportation engineer in Baltimore, where Translink’s CEO last worked, about his stint with the MTA, I got this reply.

You are about to get a new CEO of TransLink in the person of Kevin Quinn.  This is a good news/bad news situation.   good news is we are rid of him, bad news you are getting him.

Mr Quinn may be the nicest yes man you will ever meet.  he is very personable and friendly but have yet to actually see him in 6yrs have an opinion of his own.   and if he has any use for light rail he has kept it well hidden.

Hopefully you will have better luck than Baltimore, ridership is off (before pandemic) 2% year over year since he took over.

Good luck!

Skeletons indeed!

Lingering Bombardier ‘skeletons’ draining cash from Alstom in rocky integration

Expects costly and painful months ahead to turn Bombardier rail operations around

Jul 05, 2021

Alstom SA Chief Executive Officer Henri Poupart-Lafarge expects costly and painful months ahead as the rail-equipment maker works to turn around the flagging operations of the Canadian rival it acquired.

Alstom is set to detail on Tuesday a path for improving profitability for the combined group after the Bombardier deal was sealed in January. Alstom is forecasting a cash drain in the first half of this year and a return to pre-acquisition margin levels only in the 2024-2025 fiscal year, according to a statement.

The shares fell as much as 8.2 per cent in early trading in Paris, the steepest intraday drop since March last year, and were down 4.3 per cent at 11:53 a.m. local time.

There will be “no more skeletons” going forward, he said in an interview, saying provisions for problematic contracts related to Bombardier have been capped at the roughly 1.08 billion euros ($1.3 billion) already announced. “The key element is to turn around Bombardier.”

Alstom has won major large train orders in recent months, benefiting from a wave of investment in carbon-free transport. But integrating Bombardier’s business has been a rocky process.

Alstom is forecasting negative cash flow in the first half of this fiscal year of between 1.6 billion euros and 1.9 billion euros, according to the statement. This will lead to “significant” negative free cash flow for the full year.

This is due to higher spending to make up for delivery delays and mismanagement related to ex-Bombardier orders, Poupart-Lafarge said. These are in countries like the U.K. and Switzerland and will require Alstom to raise train deliveries by 35 per cent.

On the brighter side, Alstom is looking at additional spending in the U.S. on infrastructure under the Biden administration as “upside potential,” he said.

In Europe, the biggest markets will be Germany along with Italy, Spain and Portugal — southern countries set to spend under the region’s stimulus package.

Key highlights

  • Alstom sees significant negative free cash flow this fiscal year including between negative EU1.6 billion and negative EU1.9 billion in the first half.
  • “Stabilization” of Bombardier legacy contracts in two or three years.
  • Adjusted EBIT margin to reach between 8 per cent and 10 per cent from 2024-25 onwards vss 5 per cent pro forma.
  • Yearly positive free cash flow toward mid-term target.
  • Order backlog stands at 74.5 billion eurosGoal to expand global market share by 5 percentage points to 36 per cent: CEO


2 Responses to “Bombardier’s Skeletons Draining Cash From Alstom”
  1. Dan says:

    Funny Surrey ‘Mayor’ Doug announced funding for the mis named SkyTrain yet no mention of this Alstroms situation) or the fact the original expo line needs 3-4 billion in rehab first.

    Also as far as I can tell the wrongly named ‘SkyTrain’ is proprietary but a number say it is not because the so called Mayor of Surrey and others said it is not however these same people have no clue Canada Line and Expo Line are not the same technology..

    Personally one gets more bang for the buck with LRT like pretty well everyone else uses.

    This all being said I have not ridden a bus or used transit since about 2009 or whenever the Canada line opened as I could catch the bus right at Scottsdale and fall asleep and wake up downtown now it only goes to Richmond then have to take Canada line then a bus. So instead of a nice no transfer trip it is a two transfer trip now. So screw you translink.

    It used to be great being able to take one bus right down town and heck sometimes I would catch the Crescent beach one in the summer and meet wife and kids there it was the 350 or 351 if I remember right but again that one does not go downtown anymore. Nor does the one that goes to 1st ave near the border, I think it was the 601 as we get off at Diefenbaker Park and walk to the old Reef or Breakers in Point Roberts..

    So I and a number of others drive now, a lot less hassle and I would never ever go back to transit until it is done right and that will never happen with Translink or any provincial government as NDP/Libs are on the same page when it comes to transit…


    1) do you think Translink would be better run by the private sector than government? Normally I would be sketchy on this myself but honestly I do not think Metro’s Transit system could be run any worse… I dunno and honestly I no longer care anymore… The border will be opening very very soon and cheaper gas etc so Tran$link won’t be getting any of money other than what they steal from Property taxes and hydro bill..

    2) Should the translink board be an electable by the people positions for a term instead of having mayors and councillors on it? I think the board needs an enema as not useful when basically just the Surrey and Vancouver mayors can basically out vote everyone else or pretty close to it…

    I thought I should also mention I have one brother in Abby and one in Chilliwack and neither want Tran$link anywhere near them as property taxes, hydro, gasoline etc will go up…

    Amazing how the powers that be since early 80’s really pulled the wool over peoples eyes regarding ‘skytrain’ as many believe it is the best in the world and just throw a line or two out to the valley and will make trips quicker and less cars. Yet they have no concept how expensive that is and percentage wise I believe the vehicle/transit use has not changed since early 70’s. Sure more people use transit but also more drive as Metro’s population has I believe almost triple since 1970.

    Have good weekend.

  2. zweisystem says:

    Thank you and good questions; questions that politicians do not like to answer.

    The question of SkyTrain or more correctly MALM is proprietary is really answered with: “When did MALM or Innovia, or ART or ALM, or ALRT or ICTS cease being proprietary?” Also note that the Canada line is a conventional railway and is not proprietary and can operate other manufacturers vehicles, including LRT, which the Expo and millennium lines cannot.

    Being proprietary means you are tied to one supplier, now Alstom and this could lead to pointed questions ruining a good photo op.

    TransLink, as it stands is a cumbersome bureaucracy, more interested in self preservation than anything else. So powerful is TransLink that regional politicians tremble in fear of these guys. Remember, TransLink was an NDP bribe to get then Vancouver Councillor and GVRD Chair, George Puil, on side with the ART/SkyTrain Millennium line.

    TransLink would be greatly downsized with planning done by private contractors, rather than six figured salaried bureaucrats. The rail for the Valley project would be far better run by the SRR of BC, than TransLink.

    I always believed TransLink’s board be elected and get the damn mayors out of it. The idiot mayor of Surrey has cost the taxpayer literally billions of dollars with his flip flop from LRT to MALM.

    As for pulling the wool over the public’s eyes, the mainstream media including the Sun, Global/CKNW and the CBC have created the SkyTrain myth and continue the SkyTrain myth. Yellow journalism prevails in BC!

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