Leadership has been passed on to a non-family executive this week in a surprise announcement at Canadian family business Bombardier, as the company posts a big loss for the fourth quarter.
Pierre Beaudoin, grandson of the company’s founder, has been chief executive of the Montreal-based aerospace company since 2003, but on Thursday announced he was stepping down to make way for Alain Bellemare, a former United Technologies Corp (UTC) executive.
The company had EBITDA of negative $1.2 billion for the fourth quarter, compared to $185 million for the same period in the previous fiscal year. The company’s full year revenues sat at $20.1 billion, up from $18.2 billion in 2013.
The company is seeking $2 billion financing, with $600 million in equity, and a further $1.5 billion in debt.
It is also suspending dividends on its class A shares, which have multiple voting rights in its dual-class structure, and common shares.
In a statement, Beaudoin said his successor had demonstrated his “exceptional management skills” and focus on profitability during his 18-year career at the US aircraft manufacturing giant, UTC.
Beaudoin will step into the role of chairman, where he will continue to work fulltime, focusing on financing, and mergers and acquisitions.
He replaces his father, Laurent Beaudoin, who became chief executive and chairman in 1979, and led the company until his son succeeded him.
Bombardier is the world’s third largest maker of jet aircraft – an industry that has suffered since the global financial crisis.
The lower-than-expected cash flows for 2014 have raised concerns about the company’s ability to continue with investment programmes. In January, Bombardier announced it was pausing development of the Learjet 85, laying off 1,000 workers in Mexico and the US as a result.
The company is also suffering major delays in its launch of the CSeries – which aimed to challenge the Airbus and Boeing duopoly in the narrow-body aircraft market.
“The CSeries flight test programme has logged close to 1,000 flight hours and the performance of the aircraft is meeting or exceeding our expectations,” Beaudoin said in a statement on Thursday.
In tribute to his father, who will now become chairman emeritus, Beaudoin said: “Under his guidance, Bombardier became more than an iconic Canadian company, it became a global mobility leader with 74,000 employees and a presence in more than 60 countries across five continents. Our vast product portfolio, largely recognised as the best in the world, is part of his legacy.”
Bombardier was founded in 1942 by Joseph-Armand Bombardier.