Pierre Beaudoin, the chief executive officer of railway and aircraft equipment maker Bombardier, announced he is stepping down after the company reported disappointing earnings and its need to obtain additional capital.
This announcement follows a shakeup in Bombardier’s management after recent setbacks the company has faced.
Repeated delays in a brand-new airliner have earned disenchantment from investors who eventually dumped the company’s shares, which went downhill this year. The addition of a new Learjet business plane has been suspended just last month and this resulted in laying off 1,000 employees.
Beaudoin’s departure marks the end of the Beaudoin family’s direct management of the company. Former United Technologies executive, Alain Bellemare, will replace Pierre Beaudoin. Meanwhile, Pierre will stay as a replacement of his father, Laurent, as Bombardier’s executive chairman.
Bombardier announced last Thursday that it is incurring a $1.59 billion loss for the fourth quarter. This contrasts with the $97 million profit it gained in the same quarter last year. Meanwhile, sales rose to $5.9 billion, an improvement from $5.3 billion in the same period last year.
For the entire year, Bombardier incurred a $2.2 billion loss, in contrast with a $1.4 billion profit back in 2013. Revenue was better year on year at $20 billion.
Aside from its aviation unit, Mr. Beaudoin noted that issues also come from its railway equipment unit, where profits are expected to be eroded by additional research and product development spending aside from possible contract issues. Bombardier’s railway equipment unit is the world’s biggest passenger train maker.
Mr. Beaudoin expressed in a conference call with reporters that the change in leadership was not a result of growing displeasure from investors and analysts. The CEO change, according to him, was spurred by Mr. Bellemare’s resignation last month as president and CEO of the United Technologies propulsion and aerospace systems group.
Mr. Beaudoin went on to say that, “I felt there was a great opportunity and it’s the right thing for Bombardier to do at this time.”