Recession Isn’t Slowing This Transportation Company

The assembly line got slower this spring for Tony Delegato, a man who has spent the last few years building rail cars at the Bombardier Inc. factory in central Vermont.

A year ago, he and 500 workers were hustling to put the finishing touches on more than 300 cars for transit systems from Boston to Orlando, Fla. Now, the victim of a slowdown in orders for rail cars, he is preparing for a one-year layoff.

That’s the bad news at Bombardier (pronounced Bom-bar-dee-ay), which also is the maker of Learjets, Ski-Doo snowmobiles, aircraft wings and military surveillance drones. Now and then, a lag between orders has forced workers into furloughs, some lasting as long as eight months.

But this Canadian transportation company has proved remarkably resistant to the troubles other manufacturers have been suffering in the current recession.

While the profits of many other companies have been diminishing, Bombardier’s have risen 37% over the last two years, along with a 51% rise in revenue last year. For the nine months ended Oct. 31, Bombardier made $58.1 million, or 25 cents a share, a 9% increase. Revenue grew 62% to $1.77 billion.

“Their products seem to be holding up well in recession,” said Frederick K. Larkin, an analyst who follows the company for Bunting Warburg Inc. “An awful lot of their business is tied up with long-term contracts.”

Bombardier has positioned itself well for the 1990s, snapping up factories overseas at a discount to prepare for the European economic union scheduled for 1992.

“In their acquisition program over the last few years, they have very cleverly managed to put together a sizable European presence, which is very important for a company in the 1990s,” Larkin said.

Bombardier has come a long way. Its founder, Joseph-Armand Bombardier, a native of Valcourt, Quebec, made his first snowmobile on his father’s farm in 1922 using an an old Ford engine and a set of runners.

Bombardier, a first-born son of French-speaking Canadians, was sent away to seminary school at age 14. But the boy, a mechanic at heart, quit after a year. He eventually built a business around the snow machines, which took doctors and veterinarians and also lumber and other supplies over the snow during the harsh winters in Quebec.

“He was a person trying to improve the life of his fellow citizens by developing equipment that would allow them to live a better life,” said Andre Bombardier, Joseph-Armand’s youngest son.

Andre Bombardier remembers his father, who founded his company in 1942, as a hard-working and generous man who often took the family on picnics and contributed money to the Catholic Church.

Joseph-Armand’s son-in-law, Laurent Beaudoin, now the chairman of the company, is credited with expanding it. The company, which had gone public in 1969, got a big break in 1974 with a contract to build 400 Montreal subway cars for the 1976 Olympics.

Some time later, Bombardier bought the designs for Pullman and Budd rail cars, securing the market for those replacement cars. Bombardier also bought the Walt Disney Co. technology for the monorail, and it built 72 cars for the Disneyland system.

Bombardier also branched into aerospace, buying Canada’s state-owned manufacturer, Canadair, in 1986. The firm makes Challenger corporate jets and is developing a quiet fuel-efficient 50-seater, the RJ, which analysts see as one of the company’s most promising developments.

Bombardier bought Learjet Inc. of Wichita, Kan., last year. That purchase gave Bombardier a strong foothold in the market for smaller corporate jets.

Bombardier also moved into Europe, buying rail equipment makers in France, Belgium and Britain, as well as Short Brothers PLC, an aerospace company in Northern Ireland that makes turboprop commuter planes and the wings for Fokker 100 aircraft.

“When we moved into Europe, we wanted to position ourselves in the aerospace and the mass-transit sector in a way that we can capitalize on the coming of 1992, the opening of the (European) market,” said Andre Bombardier, now chief spokesman for the company.