Bombardier action plan: Dump recreational products for quick cash
Canadian PlasticsCanadian Plastics
Transportation manufacturer Bombardier Ltd. has announced plans to sell off its recreational products division, a m...
Transportation manufacturer Bombardier Ltd. has announced plans to sell off its recreational products division, a move that will reverberate through the Quebec plastics industry. Bombardier Recreational Products manufactures snowmobiles, personal watercraft and all-terrain vehicles, and is a major client of many Quebec plastic processors.
A statement issued April 3 reads: "The corporation has decided to divest its recreational products business as it is the most liquid asset in Bombardier’s portfolio." Segmented revenues of this division for the year ended January 31, 2003 were $2.5 billion Cdn.
However, the sale may not mean a loss of contracts for Quebec processors. Snowmobiles are what launched Bombardier in 1942, and members of the Bombardier family have expressed an interest in being part of an eventual group of investors seeking to acquire the recreational products business.
The divestiture is part of an action plan unveiled April 3 by Bombardier’s new CEO, Paul Tellier. The plan also included an equity offering and an intention to focus on the aerospace and transportation (rail) businesses. Tellier also announced fiscal 2003 revenues of $23.7 billion and a net loss of $615.2 million after non-cash special items.
Bombardier Recreational Products designs, develops, manufactures, distributes and markets Ski-Doo snowmobiles, Sea-Doo watercraft, Bombardier all-terrain vehicles, Johnson and Evinrude outboard engines, snow-grooming equipment and multi-purpose tracked vehicles. It also manufactures Rotax engines that power Bombardier and other manufacturers’ products.