Bombardier Report

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in this division are the RJ, the Global Express, and
the Lear-45. De Havilland, which was recently purchased with help from the
Ontario government, produces the Dash-8 series of airplanes. The Dash-8 has had
its production rate increased to 48 planes a year with about 81 on order.
Modified versions of the Dash-8 are in the works that could enable an even
bigger increase in production. Bombardier has cut costs and increased the
profit margin at de Havilland to improve profitability. Bombardier will likely
exercise the option to buy the remaining 49% from the Ontario government. The
outlook for the success of the RJ is very good, although most of its sales rely
on a small number of companies, these companies are pleased with the RJ's
performance to date. Bombardier's entrant into the long-range market is the
Global Express that has “about 60 orders” on the table, but needs 100 to break
even at a price of $34 million. It is experiencing strong competition from
Gulfstream, ...

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Bombardier has 28% and 12% of the
North American and European markets respectfully. The outlook for expansion in
the North American market is encouraging with the contract with Am-Trac to
supply high-speed trains and equipment for use in the United States. Recent
developments in Mexico has led to an increase in demand for railway cars in that
country. As well, the acquisition of Waggonfabrik Talbot will give Bombardier a
strong foothold in the European market that already accounts for 60% of sales.
One area of concern is that Bombardier's competitors in this industry are
becoming stronger. The merger between Asea Brown Boveri (ABB) and Damhler-Benz
has created a strong competitor. ...

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