Canada’s Bombardier Emerges As A Global Aviation, Rail Power Diversified Manufacturer Builds Jets, Snowmobiles, Subway Cars
Nouveau riche Russians race its snowmobiles, Chinese leaders fly its corporate jets, New Yorkers cram into its subway cars. Bombardier Inc., founded in a mechanic’s garage in rural Quebec, is a company on the move.
Joseph-Armand Bombardier, who tinkered for years before inventing the snowmobile in 1936, wouldn’t recognize his namesake today. He died in 1964, before the company expanded into rail transit, developed the Sea-Doo watercraft, and, over the past 10 years, became the largest civil aerospace manufacturer in the world after Boeing, Airbus and McDonnell Douglas.
Its revenues more than doubled since 1992 to $5.25 billion in 1996. It has a backlog of orders worth nearly $7 billion, ranging from high-speed trains for Amtrak to 50-seat regional jets for major airlines.
New products include an electric car designed for use in Sunbelt retirement communities, a luxury long-range business jet and a 70-seat regional jet.
Canada’s top chief executives last year voted Montreal-based Bombardier the nation’s most-respected corporation. Outside Canada, however, the Bombardier name is less well-known than several of its products and subsidiaries - Ski-Doo and Sea-Doo, Learjet, de Havilland.
Bombardier was incorporated in 1942, six years after its founder sought a patent for the seven-passenger snowmobile he sold to country doctors, foresters, utility crews and others looking for faster ways to travel the snowbound roads of wintertime Quebec.
During World War II, the company produced an armored snowmobile for the Canadian army. After the war, it developed a snowmobile school bus.
The company’s first major breakthrough came in 1959, with the launch of the Ski-Doo, much smaller and faster than previous snowmobile models and the first design suited to recreational use.
The energy crisis of 1973 battered the snowmobile market, and prompted Bombardier to start its diversification. The guiding force was Joseph-Armand Bombardier’s sonin-law, Laurent Beaudoin, who at 27 had become company president in 1966 and remains in charge today.
Lacking any previous experience in mass transit, Bombardier successfully bid in 1974 to provide 423 cars for Montreal’s subway system. Other orders flowed in, including a blockbuster 1982 contract to provide subway cars for New York City that established Bombardier as North America’s No. 1 producer of rail transit equipment.
A bolder diversification move came in 1986, when the company decided to venture into aerospace and bought Canadair from the Canadian government.
In 1989, the company announced Canadair would develop a 50-seat passenger jetliner.
“That was the gutsiest decision,” said Yvan Allaire, vice president for corporate strategy.
The regional jet went into operation in 1992, and is now, after more than 200 sales, the market leader for its size. Its success prompted the company to confirm in January that it will develop a 70-seat stretched version.
Competition is stiff for both regional jets and business jets. Competitors in the business jet sector include Gulfstream Aerospace Corp. and the world’s biggest airplane manufacturer, Boeing Corp., which also has launched a business jet.
Bombardier has captured about 45 percent of the global market for regional aircraft. Overall, aerospace accounts for half the company’s revenue.
But Allaire says Bombardier doesn’t want to keep expanding aerospace operations at the expense of other sectors. He expects future growth for the rail transit sector in Asia and Latin America as big cities seek to limit highway congestion. The motorized consumer products division - which makes Sea-Doos and Ski-Doos - is likely to continue expanding powerboat production.