BUSINESS

Bombardier Braces Itself For Double Dose Of Bad News For Railway, Aircraft Businesses

It could face hits from both Europe and the U.S.

09/26/2017 08:47 EDT | Updated 09/26/2017 11:34 EDT
Denis Balibouse / Reuters
People attend the Bombardier stand during the European Business Aviation Convention & Exhibition (EBACE) at Cointrin airport in Geneva, Switzerland, May 22, 2017.

MONTREAL — Bombardier faces the prospect of a double barrel of bad news today affecting its commercial aircraft and railway businesses.

The first hit could come from Europe early this morning with the announcement of a possible deal to merge Germany's railway manufacturer Siemens with Alstom of France.

Alstom acknowledged on Friday that it was in talks with its rival about a possible combination. Bombardier (TSX:BBD.B) is also believed to have talked to Alstom.

Other bad news could come from U.S.


Published reports suggest a multibillion-dollar deal could be announced Tuesday, that would leave Bombardier out in the cold.

The industry is undergoing consolidation to compete with the state-backed rival Chinese railway manufacturer CRRC that is growing its global reach.

The other piece of bad news could come this afternoon in Washington, D.C., when the U.S. Department of Commerce announces its decision on imposing preliminary countervailing duties on sales of CSeries planes.

The Trump administration is widely expected to back Boeing's petition. However, no duties will be paid until Bombardier delivers the first planes to Delta Air Lines next year.

A preliminary anti-dumping determination is currently scheduled to be announced Oct. 5, but can be extended. The department will make final determinations on duties before the U.S. International Trade Commission issues its final injury determination.

Bombardier has said it is confident that in the end ITC "will reach the right conclusion."

The process could take months to complete while hefty duties would undermine Bombardier's efforts to sell CSeries planes directly to U.S. airlines.

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