Since his appointment as CEO of Bombardier in 2015, Alain Bellemare, MBA ’93, has weathered many crises – from his company’s near bankruptcy to its year-long trade battle against Boeing. On March 16th, Bellemare returned to his alma mater to speak in the CEO Speaker Series, giving insights into his career and providing perspective on controversies surrounding Bombardier’s C-series airliner.
The Bombardier chief spent the first twelve years of his career in Crown Cork & Seal Canada and Kraft Canada. Bellemare was on the verge of moving to Kraft’s Chicago headquarters in 1996 when United Technologies (UTC) invited him to join the manufacturing operations of Pratt & Whitney, one of UTC’s Greater Montreal-based subsidiaries.
Bellemare was indecisive about moving to a different company. “I was getting comfortable at Kraft,” Bellemare said. “I wasn’t sure if I wanted to start [my career] all over again.” In hindsight, he acknowledged that joining UTC was “one of the best things [he’s] ever done.” Entering the aerospace industry allowed Bellemare to return to his background in aeronautical engineering. Furthermore, Bellemare was able to transfer his knowledge of business operations from Kraft to his new role in Pratt & Whitney. “It was a bit of a challenge to move from producing peanut butter to jet engines,” Bellemare jokes. Executives at UTC were surprised by the company’s decision to hire a new colleague from the food industry, but Kraft’s “disciplined” and “cost-focused” operations trained Bellemare to succeed in the aerospace industry as well. Bellemare’s most notable responsibilities at UTC included the manufacture of aerospace systems for the Boeing 787 and the merger of UTC subsidiary Hamilton Sundstrand and the Goodrich Corporation in 2012.
Given the current political climate in the United States, Bellemare himself was surprised by the 4-0 ITC ruling in favour of Bombardier.
However, none of Bellemare’s experience prior to becoming Bombardier CEO prepared him for his company’s trade battle against Boeing. In April 2017, Boeing filed a complaint accusing Bombardier of receiving billions from the Quebec and federal governments as unfair subsidies for Bombardier’s C-series aircraft program. Six months later, the U.S. International Trade Commission (ITC) ruled to impose a nearly 300-percent tariff on the C-series, a decision the organization later unanimously overturned in January.
When reflecting on the trade case, Bellemare depicted Boeing as being “really bad guys” and “dishonest.” Bellemare stated, “what [Boeing] did [in the trade case] was really, really unfair… coming after the C-series, which was not competing with Boeing, and coming at us was absolutely ridiculous. It was a big joke.” Given the current political climate in the United States, Bellemare himself was surprised by the 4-0 ITC ruling in favour of Bombardier.
Given the pretext to the Airbus partnership, Bellemare admitted his company’s struggles facing rivals who “produce ten times more aircraft” than Bombardier does, as well as the financial burden the C-series imposed. “When I joined [Bombardier] in 2015, there’s a lot of speculation that I would shut [the C-series program] down,” Bellemare said. “I [was] not going to shut it down, but I [was] going to find a way to unleash the value of the investment [in the C-series].” It became evident to Bellemare that Bombardier could only save its beloved aircraft through a partnership.
Bellemare praised Quebec Premier Couillard’s judgment in backing the company and stated that the Airbus partnership will bring the province more revenue and jobs.
An initial partnership proposal with Airbus in 2015 did not come into realization until Airbus reconsidered and agreed to co-manage the C-series program with Bombardier in October 2017. Bellemare emphasized that the partnership was a “purely strategic move.” Even though Airbus assumed leadership of the C-series production, the company brought Bombardier a larger clientele, more leverage with suppliers, and a vast customer support network. In the partnership agreement, Airbus gained a controlling stake of 50.1-percent in the C-series program, and now controls the manufacturing and sales of the aircraft. Bombardier and Investissement Quebec will own a 31-percent and 19-percent interest, respectively.
Bellemare believes that government subsidies were Bombardier’s best option to save the C-series prior to the Airbus partnership. “What people do not understand is that in 2015, there was not one airline customer that wanted to buy the C-series,” Bellemare recounted. “If the Quebec government [did not] put a billion dollars into Bombardier, it would have [meant the end] for the C-series. Without the C-series, Bombardier would’ve had a very tough time.” According to the CEO, the C-series subsidies convinced his company’s airline clients that the production of Bombardier’s flagship aircraft was not disbanding anytime soon.
Bellemare praised Quebec Premier Couillard’s judgment in backing the company and stated that the Airbus partnership will bring the province more revenue and jobs. The Bombardier chief further demanded more support of his company from the Quebec business communities. “We’re so fortunate to have a global player right here in Montreal and Canada,” Bellemare said regarding Bombardier. “We should cherish [Bombardier] and we should understand that it comes with challenges when you operate a company of that size.” Regardless of the incurred debt, the backing of the Quebec government speaks well to the future of aspiring businesses in the Canadian landscape.