Bombardier hopes to reach an agreement “soon” with its employees

This is what the leader said on Thursday to financial analysts in a call to discuss the results of the first quarter. At a press conference shortly afterwards, Mr. Martel added that the negotiations were going smoothly.

We remain fully confident that we will succeed in reconciliation, he added. You need to take the time to explain things properly. We are still in discussion and we still have discussions to do with them next week, before finalizing our offer. Once we have had a discussion, we will prepare a counter-offer.

Negotiations started off a bad start; in fact, the workers rejected the latest management offer of 99.6% and gave themselves a strike mandate of 98.8% on April 24. The International Association of Machinists and Aerospace Workers (IAMAW) felt that the wage offer was not enough to offset the rising cost of living.

Bombardier reportedly offered a wage increase of 2.5% for the first year and then 2.25% for the last two years of a three-year collective agreement, the union reported. A few days later, IAMAW said it sees progress on the settlement table.

For his part, Mr. Martel assured that the company will consider inflation in its salary offer. Uncertainty about the level of inflation, however, complicates the formation of an offer, he said at a press conference. The challenge of a collective agreement is to predict what inflation will be in the second and third years.

In its operations, however, Bombardier manages to offset the effects of inflation. The environment is favorable for selling prices, Bart Demosky, chief financial officer, told financial analysts. Prices also rise relatively faster than inflation. The wind is favorable for 2022.

The financial situation is improving

The bargaining round took place as Bombardier’s financial situation continued to improve in the first quarter. The business jet maker was able to generate money, a figure closely monitored by analysts, and paid off 400 million US dollars (513 million Canadian dollars) in debt.

The company’s cash flow reached US $ 173 million (C $ 222 million). Analysts expect the company to take instead US $ 230 million (CA $ 295 million) from its reserves, according to figures from Desjardins Capital Markets.

The fact that Bombardier did not use its cash reserves is acknowledged by Tim James of TD Securities. Every quarter that management seems to be on the right track to meet its 2025 targets builds credibility for the company and the new team that has been able to turn things around since taking office in 2020.

Investors, however, responded with less enthusiasm. At the close, the stock was down 11 cents, or 8.33%, to $ 1.21 on the Toronto Stock Exchange.

While the numbers show improvement in business, President and CEO Eric Martel said one should not expect to regularly see quarterly cash flow in excess of US $ 100 million (C $ 128 million). ). On the other hand, the ink will be red clearly remarkable for subsequent results, he said.

In the first quarter, the net loss from resumption of operations was US $ 287 million (C $ 368 million), compared to US $ 251 million (C $ 322 million) in the same period last year. The adjusted loss per share is 3 cents.

Revenues from the sale of business jets and after-sales service reached US $ 1.2 billion (C $ 1.54 billion). The company also reports deliveries of 21 aircraft in the first three months of the year.

Prior to the release of earnings, analysts expected an adjusted loss per share of 3 cents and revenue of US $ 1.3 billion (C $ 1.67 billion), according to financial data firm Refinitiv.

Despite a good start to the year, Bombardier decided not to touch on its forecasts because of the uncertainty associated with the conflict in Ukraine. Benoit Poirier, of Desjardins Capital Markets, believes the decision could show too much caution given the first quarter results.

Mr. Martel pointed out, at a press briefing, that activities should continue their momentum if the geopolitical situation and its effects on the economy do not worsen.

The effects of fighting inflation on the economy also raise questions. With its backlog, the company is in a good position to cope with economic problems, he said. We are able to suppress these disturbances for the future.