New Bombardier charts own course

Saint-Bruno, Quebec — José Boisjoli is a small man who loves to ride machines. Any kind of machines. Snowmobiles, ATVs, boats, motorcycles. And he likes to talk about the machines and tell people how he thinks they perform. He’s not shy about offering suggestions for improvements, either.

That’s good, since he’s the new president and CEO of Bombardier Recreational Products, Inc. (BRP), the company spun off last December from the huge international manufacturer, Bombardier, Inc.

“I’m a product guy,” says Boisjoli. “When I’m challenging an engineer, I know what I’m talking about.” That’s reasonable, since he’s a trained professional engineer.

“I’m a believer that product is king,” he says. “This is discretionary money. I will push product innovation and push technology.”

But Boisjoli’s challenge today will be more than fine-tuning a machine design; it’s whipping into shape a new company trying to digest a major acquisition in 2001, battling a difficult exchange rate problem between the Euro and the U.S. and Canadian dollars, dealing with a large debt incurred in the purchase, and operating a far-flung manufacturing system with facilities scattered across the globe from Wisconsin to China.

THE BIG SPIN-OFF
On April 3, 2003, Paul Tellier, the new president and CEO of the $10 billion Bombardier, shocked the powersports and financial communities when he announced that Bombardier would sell its Recreational Products Division as part of a major assets sale to raise cash for the company.

The attacks of 9/11 had knocked the bottom out of Bombardier’s lucrative corporate jet manufacturing market, its rail car manufacturing business was lagging, and the company was facing a cash crisis.The quickest solution was to sell Recreational Products.

The Bombardier family, major shareholders of Bombardier, Inc., agreed with the move even though the company began in 1942 when Joseph-Armand Bombardier incorporated a new company to manufacture snowmobiles. The key to the new company was implementation of a patent won by Bombardier for a gear-driven track system. The giant international corporation grew from that simple manufacturing operation based in Valcourt, Quebec, Canada.

Recreational Products was put up for sale, and the prize was won by a consortium of U.S. and Canadian investors led by the Bombardier family. The sale was completed Dec. 18, and the new company was named Bombardier Recreational Products (BRP). In an interview with Powersports Business, Boisjoli talked about the new company and his plans for it.

THE FIRST STEPS
The first move made by the company’s board of directors was to hand over the reins to Boisjoli and let him run with it. His promotion was announced the same day the sale closed. Laurent Beaudoin, executive chairman of the board at Bombardier and the son-in-law of Joseph Bombardier, was named chairman of BRP.

Boisjoli, a 15-year veteran of Bombardier and president of the snowmobile and watercraft and ATV division, seemed like the logical choice.

“In that whole organization, I can’t think of anyone who is better qualified,” said Maurice Murray, vice president of sales and marketing at Global Motorsport Group, a major powersports distributor. Murray worked with Boisjoli at Bombardier for nearly three years. “I rate him as one of the best leaders I ever worked with,” says Murray. “He’s able to see the big picture, and he understands details at the same time.”

“The plan is clear,” says Boisjoli, “the family is here for the long-term and the (investors) are here for the short, about five years. The plan is to do an IPO (initial public stock offering).”

There’s no specific timeframe for that exit strategy, he said, but when it happens it will provide an opportunity for BRP employees and dealers. Boisjoli’s first major move was to reorganize the company into business units based upon geography. (See organizational chart on Page 7) “I combined operations in North America,” he said, “because they’re on the same continent and there is synergism in sales and marketing and dealer and customer support.”

Interestingly, Boisjoli named two executive vice presidents with North American responsibilities. Roch Lambert, a Bombardier veteran and the man who integrated the OMC purchase, will have responsibility for product development and sales and marketing in North America. He’ll be responsible for all BRP products in the North American market, including snowmobiles, PWC and jetboats, ATVs, and Johnson and Evinrude outboard motors. He’ll also be responsible for parts, accessories and apparel.

Alain Villemure was named executive vice president of manufacturing operations in North America and China.
Also given key roles in the new organization were Louis Morin, formerly financial officer with Bombardier, and Michel Hade, who is responsible for international sales of boats and ATVs outside of North America.

“Those people were handpicked by Jose,” says Murray. “The board is allowing him to stretch his wings even more and he’s doing it by building the next level of management with people who have done well by him.”

He also plans to move the BRP corporate headquarters from the Bombardier, Inc., complex here to the manufacturing facility in Valcourt. That move will happen this summer and will bring the management team together at the same time that it reduces costs.
The main focus of the new structure, says Boisjoli, is to integrate all services in North America. That could well mean consolidation and closing of certain facilities.

TRIMMING THE FAT
Industry insiders predict that Boisjoli’s team will begin cutting costs by trimming the excess from its many overlapping divisions. One example of potential trimming might center around the separate marketing staffs each division currently features, an insider suggested.

In fact, at least one of the company’s marketing gurus decided it was a good time to move on this fall. Glenn Sandridge, who used to serve as director of marketing for watercraft at Bombardier, has taken a position as vice president of marketing at boating retailer MarineMax.

Any layoffs that do take place are likely to be completed soon, since budget recommendations were due to Boisjoli early this month.

In addition to layoffs, the company plans to integrate its procurement, which will increase volumes and decrease costs, as well as call centers and dealer support resources.

One of the main reasons why cost-cutting is such an important part of Boisjoli’s immediate plans is that it is disadvantaged by the strengthening of the Canadian dollar relative to the U.S. dollar. Cutting costs in the U.S. will help to minimize this impact in the short-term.
“Any changes we make now will benefit us even more when the exchange rate improves,” says Boisjoli.

PRODUCT IS KING
Look for plenty of product innovation from the new BRP; it’s the company’s history and its heritage. Bombardier built the first snowmobile and it prefers to innovate rather than copy and improve.

“We proved (the philosophy) with the REV-platform snowmobile,” says Boisjoli. “We took risks, but we were convinced that the REV was a good platform and we went with it. We had a good marketing plan, and we were able to take over number one (market) position. If you want to be successful, you have to innovate; you have to create pull from customers.”

Boisjoli ticks off innovations from many sides of the company — snow, ATV, outboard — and says that innovation is continuing now with the introduction of a new PWC that will drive Gen Xers into dealerships.

He was tightlipped about the boat, but the new product will be shown to dealers this month. Many industry observers claim the intro will be for a long-awaited stand-up model, a more plausible craft just may be a stand-up/sitdown hybrid based loosely around the former Sea-Doo HX.

So, what about a motorcycle? BRP’s Rotax unit makes engines for Aprilia and BMW and one of BRP’s strengths is metal fabrication. Can it be much of a leap to a proprietary motorcycle? Perhaps not.

“We have an idea about how to enter this market,” says Boisjoli. “It’s too big of a market not to be a major player. It could be done through acquisition or development; it’ll be road, but it’ll be motocross, too, that’s for sure.”

Liz Walz, executive editor of Boating Industry magazine, contributed to this story.

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