Bombardier brings in another outsider in executive shake-up
Long time executive Mike Arcamone has been replaced by a former president of a major buyer of commercial aircraft
MONTREAL—Bombardier’s new chief executive is bringing in another outsider with extensive industry experience to turn around the company’s commercial aircraft business, which makes its Q400, CRJ and CSeries planes.
Long-time Bombardier executive Mike Arcamone was replaced April 9 by Fred Cromer, who was most recently president of International Lease Finance Corp., a major buyer of commercial aircraft.
Prior to his six years as president of ILFC, Cromer held positions at several U.S. airlines.
“His strong leadership skills, international network and deep understanding of the aviation industry are a perfect match for Bombardier Commercial Aircraft, as we are preparing to realize the true market potential of our new CSeries aircraft while refocusing on our Q400 and CRJ programs,” Bombardier (TSX:BBD.B) chief executive Alain Bellemare said Thursday.
Arcamone’s departure after about three years with the company and the pending retirement of Bombardier’s chief financial officer, Pierre Alary, come amid a number of senior management and other changes at the aerospace and rail giant, including the sudden installation of Bellemare as CEO in mid-February.
Since early 2014, Bombardier has undergone an organizational restructuring, laid off more than 3,500 employees and seen the departure of several officials including aerospace CEO Guy Hachey. A replacement for head of commercial sales has yet to be found.
The latest management shakeup comes amid media reports that Ilyushin Finance Co. is rethinking its purchase of CS300s. The company, which has a firm order for 32 of the aircraft and options on 10 others, told trade publication FlightGlobal that it will make a decision by the time of the Paris airshow in June.
Bellemare is a former executive from United Technologies Corp., including at the Pratt and Whitney division that makes jet engines for Bombardier and other customers. Bellemare joined Bombardier as it announced fourth-quarter results on Feb. 12, including a $1.59-billion loss attributed mostly to the company’s Learjet 85 program for non-airline customers.
Bellemare replaced Pierre Beaudoin who, in turn, had replaced his father, Laurent, as chairman of the company after investors expressed a lack of confidence in the way Bombardier’s management was handling the CSeries program _ a multibillion-dollar project.
Bellemare also announced Thursday that Bombardier will be getting strategic advice from a company headed by former ILFC chief executive Henri Courpron, a former president and CEO of Airbus North America, who has a mandate to review Bombardier Commercial Aircraft’s operations to improve its performance.
“Having Fred and Henri on board gives us a strategic edge like we’ve never had before,” Bellemare said.
“We are really paving the way to strengthen our existing commercial programs and to make the CSeries aircraft a phenomenal success.”
Analysts said Bellemare is moving quickly to improve the commercial aerospace operations.
“Arcamone may have progressed the CSeries program, but the unit was a poor financial performer and the CSeries did experience delays under his watch,” said analyst David Tyerman of Canaccord Genuity.
He added that Cromer appears to have very good credentials, but wondered if he has the manufacturing expertise to dramatically improve profits.
Walter Spracklin of RBC Capital Markets said the new appointments were an opportunity for Bellemare to “form his own team with fresh mandates.”