bombardier changes leadership

In an unexpected management switch, Bombardier named former Canadian National Railway chief executive Paul M. Tellier to lead the multi-national company. Known as a politically savvy turnaround artist, the 63-year-old Tellier replaces Robert E. Brown as president and chief executive.

In a statement on December 13th, the company said its board appointed Tellier to the positions at a special meeting after Brown "asked to be relieved of his functions."

Bombardier chairman Laurent Beaudoin will assume the CEO functions on an interim basis, until Tellier takes over Jan. 13.

Bombardier is the world's third largest maker of civil aircraft and its biggest maker of passenger trains.

According to many in the Quebec business sector, Tellier's skills will be crucial to guide Bombardier through uncertain times, when plane orders are under threat and caution about economic prospects could slow investment on big projects like new rail lines.

No stranger to Bombardier he has been a director of Bombardier since1997. He was quoted as emphasizing that, "The status quo is unacceptable to the shareholders. Bombardier needs to be re-energized. My record at CN speaks for itself."

As chief executive of the Canadian National Railway, Tellier transformed that government bureaucracy into one of North America's most admired and efficient publicly traded railroad companies.

He will be charged with a similar challenge at Bombardier, which makes vehicles that range from commuter jets and passenger trains to powerboats and snowmobiles.

If history repeats, Montreal-based Bombardier is in for the same treatment that Tellier used to transform Canadian National. There he cut thousands of jobs, sold nonrailroad businesses and introduced tight schedules.

The New York Times quoted Douglas Young, an Ottawa-based attorney who was Canada's transport minister when Canadian National was privatized in 1995, as stating: "Six months from now, Bombardier will be another company from what it was two months ago." Young was also quoted as saying that he expects "big changes" to come and he didn't think the new Bombardier honcho would "dilly-dally."

Bombardier announced Tellier's appointment on Dec, 13th. At that time the 63-year-old fitness fanatic, skier and BMW motorcycle rider, stated there was no way that Bombardier shareholders could accept the company's current performance.

Bombardier's stock price is down more than 75 percent in the last two years.
Tellier and Bombardier face many challenges. The aerospace division- makers of Canadair Regional Jets, Learjet and Global Express corporate jets- received orders for just 43 aircraft in the third quarter, down from 205 the previous year.

In addition, the New York Times reported that the rail division is engaged in billion dollar dispute with DaimlerChrysler over Bombardier's acquisition last year of a German railcar manufacturer.

The New York Times reported that aspects of Bombardier's corporate governance have also come under fire from analysts. As an example the article reported changes in accounting methods have made it difficult to compare present and past performance.

Members of the Bombardier family own 20 percent of the equity, but control about 60 percent of the voting stock.

A graduate of Oxford University and a lawyer by training, Tellier led the federal departments of Indian affairs and of energy before former Canadian Prime Minister Brian Mulroney in 1985 named him clerk of the privy council and secretary to the cabinet, Canada's most senior job in civil service.

The New York Times article noted that Tellier has often said that his one regret at Canadian National is that he did not move fast enough. Upon his appointment, he said his first task at Bombardier would be to focus on the balance sheet. He also planned to spend the first two or three weeks visiting as many units as possible.