WatchBombardier Inc firms up deal with Quebec for 1 billion investment in

MONTREAL — After months of negotiations, Bombardier Inc. has reached a definitive agreement with the Quebec government on a US$1-billion investment in the CSeries passenger jet program.The two sides have been working out details of the agreement since the plan was originally announced in October.The Montreal-based company is slated to receive the money in two instalments of US$500 million, the first June 30 and the second Sept. 1.Once the Quebec government’s investment is complete, it will own 49.5 per cent of a new limited partnership with all the assets, liabilities and obligations of the CSeries aircraft program, including larger versions of the plane beyond the CS100 and CS300 should they be developed.Bombardier CEO Alain Bellemare said the investment demonstrates the provincial government’s confidence in the company’s largest aircraft.“Their investment will accelerate the momentum we’ve created, strengthen customer confidence in the aircraft and provide Bombardier with the financial flexibility needed to compete and win,” he said in a statement.Air Canada Inc threatens to walk away from Bombardier Inc CSeries deal if legislation over maintenance isn’t passedBombardier Inc sells amphibious aircraft program, sells 10 CRJ regional jets to unnamed customer for US$472 millionBombardier Inc cutting 200 Toronto positions in move to outsource some Q400 manufacturingPremier Philippe Couillard has said Quebec’s intervention in the CSeries was key to securing orders from Air Canada and Delta Air Lines.Air Canada said Thursday that it continues to work on finalizing a contract with the manufacturer for up to 75 CSeries planes after the Senate passed amendments giving it relief from obligations under the Air Canada Public Participation Act, which required it to perform heavy maintenance on its fleet in Montreal, Winnipeg and Mississauga, Ont.Meanwhile, Finance Minister Bill Morneau said the federal government is continuing to negotiate potential financial support for Bombardier, which is seeking $1 billion from Ottawa.“We believe that long-term it’s (the aerospace sector) one of the more innovative places in the economy, so in that regard having a leading company like Bombardier is important and we’re engaging with them to think about how we can ensure that the sector remains successful,” he told reporters after speaking in Toronto to the Economic Club of Canada.Morneau wouldn’t discuss stumbling blocks but Ottawa has reportedly pushed Bombardier to change its voting structure, something the founding family that controls the company through multiple voting shares insists it has no intention of doing.The CSeries aircraft is two years behind schedule and has incurred about US$2 billion in cost overruns. The first plane is slated to be handed over to Swiss Airlines next week and enter into service July 15.Quebec Transport Minister Jacques Daoust said the partnership with Bombardier will ensure the employment of up to 2,500 workers on the program.“So this is a win-win relationship that will benefit all Quebecers and the entire aviation sector,” he said in a news release.The new entity will be headed by Fred Cromer, president of Bombardier Commercial Aircraft. The board will contain three Bombardier nominees — former Quebec premier Daniel Johnson, who will be chairman, Bellemare and chief financial officer John Di Bert. Quebec will nominate two members.Under the revised deal, Quebec will receive warrants to purchase up to 100 million Bombardier shares or about 4.26 per cent of its outstanding shares. That’s half as many at the same price of $2.21 per share that was outline in the preliminary deal.Spokeswoman Sylvie Gauthier said the change was made to reflect Bombardier’s improved financial position.“We’ve derisked the program, we’ve had sales; the shares are nearly double where it was so that all comes to play in the negotiations,” she said in an interview.She said Quebec’s contribution will be used to help ramp up production until it reaches a break-even point in 2020 with 90 to 120 planes produced a year. read more

UPS says global economy getting worse customers are nervous weakness in Asia

AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email by News Staff Posted Jul 24, 2012 5:48 pm MDT NEW YORK, N.Y. – UPS expects the global economy to get worse before it gets better. Again.The world’s largest package delivery company is more pessimistic about U.S. growth than many economists. It predicts global trade will grow even slower than the world’s economies — a trend not seen since the recession. It’s making cuts in its business and reducing its earnings projections.UPS on Tuesday lowered its forecast for all of 2012 and said its third-quarter earnings will fall below last year’s results.Customers are worried about the global economy weakening in the second half of the year, the company said. Their skittishness was also felt in the second quarter, where UPS missed analysts’ expectations for both earnings and revenue. The stock fell nearly 5 per cent Tuesday.“Economies around the world are showing signs of weakening and our customers are increasingly nervous,” Chairman and CEO Scott Davis said in a conference call with analysts.That sentiment, along with similar comments from chemical maker DuPont, weighed on investors, who are already nervous about the global economy. The S&P 500 index dropped 0.5 per cent in the morning. UPS is a closely watched barometer of broader economic health because it moves millions of packages between consumers and businesses every day.UPS said it expects the U.S. economy, by far the world’s largest, will grow just 1 per cent this year. The company cited stalling growth from U.S. service companies, lower retail sales and still-high unemployment as signals that the U.S. isn’t holding up as well as UPS anticipated just three months ago.Although economists have been cutting their projections, estimates for U.S. economic growth this year are still in a range of about 1.8 per cent to 2 per cent.This marks the third straight year growth has stalled at mid-year after getting off to a promising start.UPS cut its full-year earnings forecast by 25 cents per share to $4.50 to $4.75. Wall Street had been expecting earnings of $4.82, according to FactSet.For the three months ended in June, UPS said net income rose 2 per cent to $1.12 billion, or $1.15 per share, compared with $1.09 billion, or $1.09 per share, a year earlier. Analysts expected $1.17 per share according to FactSet.Revenue for the Atlanta company rose 1.2 per cent to $13.35 billion.In the U.S., revenue rose 4 per cent from a year earlier, driven by a higher volume of packages. UPS said the increase was mostly due to a higher number of packages ordered from Internet retailers.Overseas, revenue fell 4 per cent on lower exports from Asia and falling revenue per package, an indication of lower prices.Revenue in UPS’ supply chain and freight business fell 1.7 per cent. That segment includes both UPS’ long haul trucking business and a unit that helps manufacturers streamline and make their businesses more efficient.A month ago, rival FedEx Corp. warned that slow global economic growth will crimp its earnings over the next 12 months.UPS said Tuesday that it’s cutting some flights out of Asia and reducing the frequency of others over the next several quarters to counter slowing demand. That amounts to a 10 per cent cut in capacity on Asia flights, on top of a previous 10 per cent reduction.The company warned it would take additional actions, if necessary, to bolster its financial results.UPS does see one bright spot ahead: it believes fourth-quarter earnings will be buoyed by major technology product launches ahead of the busy holiday season. Apple Inc. is expected to release a new version of the iPhone in the fall. UPS says global economy getting worse, customers are ‘nervous’; weakness in Asia and Europe read more