Bombardier chief executive Eric Martel has highlighted the airframer’s extensive US industrial presence and strong trading relationship as he used the company’s full-year results call to warn against the imposition of tariffs on Canada-built products.
President Donald Trump on 1 February said the US would immediately add a 25% tariff to all goods made in Canada or Mexico being imported into the country. However, their introduction was subsequently paused for a month.
Nonetheless, the “uncertainty created by the threat of tariffs” has prompted Bombardier to suspend providing financial guidance for 2025, says Martel, briefing investors on 6 February.
Bombardier, he says, has some 2,800 suppliers across 47 US states which employ around 10,000 people and there are more “parts and systems” from those suppliers on its aircraft than from any other country.
They are not confined to small parts either, he notes, but “major structures and components” – including the Global 7500’s wing – are built by US companies.
In addition, Bombardier’s defence business is based in Wichita, Kansas and the company has a string of service centres spread across the country.
Martel says the firm has a “reciprocal trade balance” with the USA “where both sides have equally won”.
Tariffs “would not benefit anyone in the long term”, he adds.
But should the 25% tariff still come to pass, Bombardier has “developed solid contingency plans for multiple scenarios… should we face an immediate complication for US deliveries”.
These would give the airframer time “not to be forced to decide rapidly”.
“Our focus is on finding a solution with a long-term view should tariffs disrupt our ability to perform to the level of our ambition in the short term,” says Martel.
And, he stresses, Bombardier’s balance sheet would allow it to better weather any trade disruption.
Although the USA remains Bombardier’s “core customer and shareholder base”, its backlog is “well diversified” with a “solid proportion of large aircraft set for delivery in international markets”.
That, combined with Bombardier’s growing services business – hitting $2 billion of revenue last year – mean the US “probably has less significance than it had a few years ago”.
Even with the tariff uncertainty, “the level of activity in the first quarter at this point is higher than a year ago, even in the US”, Martel adds.
Aerospace analysts were broadly supportive of Bombardier’s cautious approach. Speaking at the recent Pacific Northwest Aerospace Alliance conference BofA global research analyst Ron Epstein said the uncertainty makes long-term planning difficult.
“As of Monday morning, an $80 million business jet from Canada cost $100 million. By Monday afternoon, it was $80 million again.
“How do you manage a business in that environment? I think you just have to step back and just think through things pretty carefully.”
Bombardier turned in another solid performance last year, with revenue up 8% at $8.6 billion, against $8 billion a year earlier, while EBIT was $878 million, up 11% on the $793 million booked in 2023.
“It is the fourth year in a row that we have grown the company in line with our plan,” adds Martel.
