Wednesday, 5 April 2017

Some executive officers should be thrashed behind the woodshed
Bombardier Inc is a Canadian multinational aerospace company and it is also a ground transportation  company. Starting as a maker of snow machines or snowmobiles, over the years it has grown into a large manufacturer of  regional airliners,  business jets,  along with mass transportation equipment, recreational equipment and a provider of financial services. It has earned billions upon billions of dollars.

In 1986, it bought a federally owned aircraft manufacturer in Montreal. In 1992, with help from Ontario’s then New Democratic government, it bought another publicly owned aircraft manufacturer in Toronto.

That same year, it bought railway car manufacturers in Thunder Bay and Kingston from an Ontario government desperate to unload them.

For governments, privatization provided political cover. Publicly owned enterprise was out of favour. Governments had been unable to operate some of these big operations profitably. Privatization, it was hoped, would absolve them of political responsibility.

Naturally it never did. Governments had entered the aircraft and rail business to develop high-tech industries and support well-paid jobs. Those political imperatives didn’t disappear with privatization. They simply had to be met in other ways such as pawn it off to a private company such as Bombardier

Here is the storyline of which essentially is unchanged: company lays off 14,500 workers (including 5,000 in Canada); governments reward company by giving it money; company then uses money to give handsome bonuses to its top brass.

This was the company that by its own admission was on the verge of bankruptcy in 2015. It was also the company that planned to eliminate 14,500 jobs by the end of 2016. If fact, they did fire that many employees in their firm in 2016.

The Quebec government gave Bombardier roughly $1 billion in 2016 while the federal government recently announced a $372.5-million loan package for the firm’s CSeries and Global 7000 aircraft programs.

On March 30, 3017, the prime minister of Canada said that he stood by his government’s $372.5-million loan to Bombardier as a way of “ensuring good long-term jobs.”

But now even the Quebec government has lost patience, with the province’s finance minister, Carlos Leitao, saying he and his cabinet colleagues are “shocked” at the fat bonuses paid to the company’s leaders so soon after it pocketed big government loans. Quebec’s Economy Minister Dominique Anglade said, that she wasn’t questioning the merit of her government’s aid package, saying it was necessary to create jobs and help the plane maker with its CSeries program.

The governments should be shocked, and so should the taxpayers. Bombardier has turned to governments for help so often that it has effectively lost the right to run itself like any other company. Its decision to hand out big bonuses at the top executives underlines why governments should have insisted on changes to how the company is run before handing over more taxpayer dollars. Ninety per cent of respondents in a Léger poll published on the weekend said the company’s executives should renounce their salary increases outright. That isn‘t going to happen. Hogs at the trough are hardly willing to walk away from what is given to them.

After a public uproar, the company agreed to postpone half of those bonuses for a year which are contingent on the company meeting performance targets. But before they made that statement, Bombardier issued an open letter explaining the company’s compensation policies and called it “inappropriate” to compare the 2016 compensation to that of the previous year. That is like a drunk driver comparing a fender bender whereas the previous year he smashed into two people on the street.

Executives at companies across the country should take heed of the protest by hundreds outside Bombardier’s Montreal headquarters. People have clearly had enough of self-serving excuses for outrageous pay increases.

The usual patter by these hogs is that if executives don’t get hefty  raises and bonuses, then the companies can’t keep experienced executives to stay with the company or find experienced executives to join the company,  blah, blah, blah.  Bombardier stated that it must compete with firms globally to recruit and retain talent

Did Bombardier re-hire those whom they fired because the firm was close to bankruptcy?  No. They did not. After the firm got the loans, five of the aerospace giant’s senior executives saw their compensations rise by nearly 50 per cent. The five top executives received a total of $32.6 million USD in 2016, from $21.9 million the year before.  This is outrageous by any standards especially since the firm fired so many employees to stave off bankruptcy that they caused by poor leadership.  

Board chairman,  Pierre Beaudoin was given $32.6 million (U.SD.) in 2016, up from $21.9 million the year before. Was he worth that kind of money?   

The firm had problems delivering streetcars to the TTC and light rail cars to Metrolinx, to the point where the transit agency is suing the firm.

Bombardier workers are fed up about lacking a voice as the company has shed jobs in an effort to improve its financial health to wit, the financial health of its five top executives.  I should add that the general public is also fed up with executives raising their salaries and bonuses to outrageous levels.


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