MONTREAL — Bombardier Inc. is putting a politically savvy turnaround artist in its driving seat with the appointment of Paul Tellier, who moves to head the plane and train maker from Canadian National Railway Co., according to Reuters.
And those skills, according to peers in the close-knit Quebec business sector, will be crucial to guide Bombardier through today’s uncertain times, when plane orders are under threat and caution about economic prospects could slow investment on big projects like new rail lines.
Bombardier is the world’s third largest maker of civil aircraft and its biggest maker of passenger trains.
“Maybe it’s fair to say he is uniquely qualified to take on a challenge of this kind,” said Michael Sabia, head of BCE Inc (Toronto:BCE.TO – News), Canada’s largest telecom group, who became a friend of Tellier when he worked under him, both as a senior bureaucrat in Ottawa and later at CN.
“This guy is a master at being able to look at a whole host of issues and points of data and be able to draw out of that a crisp clear definition of the problem that needs to be solve.
“He is very determined, very decisive and pretty much ‘don’t get in his way’,” Sabia told Reuters.
Tellier, 63, made his determination clear in a conference call that followed his appointment to the top Bombardier job.
“The status quo is unacceptable to the shareholders. Bombardier needs to be re-energized,” he said. “My record at CN speaks for itself.”
A lawyer and an Oxford graduate, Tellier secured himself a spot in the Canadian establishment with top jobs in both the public and the private sectors.
A native of Joliette, Quebec and the son of a provincial cabinet minister, Tellier spent seven years running Canada’s civil service before moving to Canadian National in 1992.
Over a decade he turned an inefficient and money-losing railroad into North America’s most profitable railway, axing thousands of jobs and cutting routes to turn around a Canadian nation-building icon.
Tellier took CN public in 1995 in what was then Canada’s largest public offering and embarked on an expansion in the United States that made it North America’s fifth largest railway.
The stock, floated at C$27 a share, or C$13.50 when adjusted for a subsequent two-for-one stock split, hit a lifetime high of C$85 earlier this year.
UNEXPECTED SWITCH
Tellier’s switch to Bombardier was unexpected, but those who followed his job at CN think the move makes sense.
Rossa O’Reilly, a railroad analyst for CIBC World Markets, said Tellier might have left because he felt he had few challenges left at CN.
“It’s understandable that looking at a Canadian industrial flagship like Bombardier, which is facing difficult times, he would view taking on that position of CEO there as a more exciting challenge,” he said.
Bombardier stock slumped from a peak of C$24 in June 2001 to a seven-year low of C$3.13 in October.
The soft U.S. economy has curbed business jet deliveries and a crisis in the U.S. airline sector has raised uncertainties over the regional jets deliveries, the two most lucrative sectors at the Canadian group which also makes passenger trains, snowmobiles and personal watercraft.
Bombardier is Canada’s top manufacturer and its workforce of 80,000 is spread over 24 countries.
Bombardier has close ties to the Canadian government as, like other aerospace companies, it seeks public funds to help finance its exports worldwide.
“(Tellier) has a very good understanding of government, government processes and government relations,” said O’Reilly.
Buzz Hargrove, head of the Canadian Auto Workers Union (CAW), said Tellier was more cooperative than Bombardier chief executive Robert Brown on labor relations issues.
“We have some tough challenges facing us and I can’t imagine a better person to have at the helm quite frankly,” said Hargrove, in rare words of praise for a leading Canadian industrialist.
Tellier’s last public move at CN was to cut 1,146 jobs, but Hargrove did not see that as a bad omen.
“Things could not be any worse for us than they are today,” he said. “Tellier knows the business, he will want a good business plan for Bombardier and so do we.” ($1=$1.55 Canadian)