Bombardier Inc. (BBDB) Earnings Call Transcript & Summary

[Interpreted] Good morning, ladies and gentlemen. My name is Pierre Beaudoin, and I'm the Chairman of the Board of Directors of Bombardier. I would like to welcome you to Bombardier's Annual Meeting of Shareholders. This year, our meeting is once again being held virtually in view of the constraints imposed on us by the global COVID-19 pandemic. This virtual format once again allows us to ensure the health and safety of our shareholders and employees. This health crisis continues to have a profound impact on our communities, our colleagues and our families. Bombardier is proud to do its part in the collective fight against COVID by participating in the corporate vaccination campaign in Québec. I would like to thank all of the teams who beyond their duties brought this project to fruition in a very short time frame. Bombardier is also ready to support vaccination effort needed in all communities where our employees and their families work. On behalf of Bombardier and all our employees, I would also like to thank once again the thousands of health care workers in Québec and around the world. Your courage and dedication allow us to look forward to blue skies beyond this pandemic. In recent months, all our employees have been proud to see our aircraft and customers support the safe movement of medical personnel and equipment. Although the aviation industry has been hit hard by the pandemic, its thousands of workers bring as much passion and sustainable innovation to their jobs as before, while continuing to support their communities. Within this industry, we are completing a strategic refocus on business aviation. Today, these aircraft are a veritable cornerstone of the global economic recovery. It is in this context of hope and ingenuity that I welcome you all. While we are not in a position to meet with participants in person today, our goal is to ensure that you can fully participate in the meeting and that we can interact with you. I invite all registered shareholders and proxy holders to ask questions and to vote on each agenda item as if you were present in person. Our meeting will be conducted primarily in French, but allow me to say a few words of welcome in English. Ladies and gentlemen, good morning. My name is Pierre Beaudoin, and I am the Chairman of the Board of Bombardier. Welcome to Bombardier's Annual Meeting of Shareholders. Given the extraordinary context, we have decided again this year to hold our meeting virtually to ensure the health and safety of our shareholders and employees. While we are not in a position to meet with the participants in person today, our goal is to ensure that you can fully participate in the meeting that we can exchange with you. I invite you all -- I invite all the registered shareholder and proxy holder to ask questions and vote on each agenda item as if you were present in person. While our meeting will be held mainly in French, a simultaneous translation is available on the live webcast, and you may ask questions in either French or English. At the top right-hand side of your screen, you can choose to listen to the meeting in English or in French. Before moving to the more formal official portion of this meeting, please allow me a few moments to pay tribute to 2 longtime Board members who will be stepping down after this annual meeting: Mrs. Martha Finn Brooks and Mr. Vikram Pandit. Dear, Vikram and Martha, on behalf of all Board members, I want to offer our deepest appreciation for your many years of service and great support. Vikram, as our Lead Director, your steady hand and sage advice helped us successfully navigate a complex reorganization by keeping us focused on the primary objective, positioning Bombardier for long-term success. Martha, you are amongst our most experienced Board members, and we are truly grateful for your passion and commitment. You never hesitated to ask the hard questions, ensuring that we always took the right actions to succeed. Thank you to you both as well as all of our Board members. With our now focus on business aircraft, we are well-positioned to continue and even increase our lead in this industry. Metna? [Interpreted] Now I will give some instructions to enable you to enjoy and participate fully in this meeting. [Operator Instructions] I remind you that only registered shareholders and duly appointed proxy holders may ask questions and vote at this meeting. The left-hand screen of the webcast platform is designed to allow you to exercise your shareholder rights, in other words, to ask questions and to vote. During the meeting, I invite you to refer to the 3 icons located at the top of the screen. The information icon allows you to view information and instructions about the meeting, including how to ask questions and how to vote. The question icon allows you to ask questions, and the vote icon allows you to view the proposals and vote on each one. I should point out that there is a delay in the webcast of this meeting. It is therefore important that registered shareholders and duly appointed proxy holders submit their questions as soon as possible so that we can address them at the appropriate time during the meeting. If you wish to ask a question, you may do so by clicking on the question icon on the webcast platform. Please read the instructions under the information icon before submitting your question. In particular, please indicate whether your question relates to a proposal that is part of the official agenda of the meeting, or whether it is of a more general nature. Please also include your name and contact information. We will try to address questions that relate directly to a proposal on the agenda at the appropriate time during the meeting. More general questions will be saved for the question-and-answer period following the adjournment of the meeting. Again, For those shareholders who wish to do so, I invite you to ask your questions now. As always, questions should be related to Bombardier's business or operations and not be of a personal nature. Our webcast platform provider will keep a complete record of all questions received. In the event that, due to time constraints, your question could not be addressed, we will endeavor to reply to it after this meeting as long as you provide your contact information when submitting your question. The voting procedure will be explained to you in a few minutes by Mr. Torkia Lagacé, Secretary of this meeting. Before we begin, I would like to draw your attention to the notices and cautionary statements that appear on the screen. I would like to remind you that during the course of this presentation, including during the address by the President and Chief Executive Officer, we may make projections or other forward-looking statements about future events or about the corporation's future financial performance. A number of assumptions were made in the preparation of forward-looking statements, and we wish to caution that actual events or results may differ materially from those forward-looking statements. I make this statement on behalf of myself and on behalf of each of the speakers whose remarks today contain forward-looking statements. We can now begin. First of all, I would like to introduce the corporation's executives who are with me for this meeting. We have Ms. Annie Torkia Lagacé, Senior Vice President, General Counsel and Corporate Secretary; Mr. Bart Demosky, Executive Vice President and Chief Financial Officer; and Mr. Éric Martel, President and Chief Executive Officer. I will act as Chairman of this meeting, and Ms. Torkia Lagacé will act as Secretary. As we did last year, we will be using the services of a moderator whose task will be to inform the meeting of the questions we receive online. Mark Masluch, Senior Director, Communications and Public Affairs, will act as moderator for any requests, questions and comments submitted via the webcast platform of this meeting.

[Interpreted] Mr. Chairman, I have before me a copy of the notice of meeting and notice of availability of proxy materials and form of proxy in connection with this meeting, together with an affidavit of a Director of Computershare Investor Services, Inc., confirming that they were sent to all shareholders entitled to receive them on March 8, 2021, the date of record in accordance with the notice and access procedures. These documents will be kept on file with the corporation. I wish to emphasize that this Annual Meeting of Shareholders has been called to transact the business specified in the notice of meeting. A simple majority of votes cast by the holders of Class A, multiple voting shares and Class B limited voting shares voting together by proxy or at the meeting by webcast will constitute approval of each of the matters.

[Interpreted] Thank you, Madam Secretary. If there are no objections, Mr. Steve Gilbert and Mr. Patrick Gauthier, Computershare Investor Services, Inc. will act as scrutineers for this meeting.

Mr. Chairman, according to the report that the scrutineers gave me at the beginning of the meeting, they have confirmed that we have the required quorum to hold this meeting, both in terms of the number of shareholders present and the numbers of voting shares represented at this meeting, whether in person, via webcast or by proxy.

[Interpreted] Thank you, Madam Secretary. I would ask that you record the scrutineer's report in the file of the meeting. I, therefore, declare this Annual Meeting of Shareholders of Bombardier duly and validly called and constituted. As in every year, we encourage shareholders to vote in advance. If you have already voted, you do not need to do anything. However, any registered shareholder and any duly appointed proxy holder who has not yet voted or wishes to change his or her vote may vote directly on the live webcast platform. I now declare the ballot open. You will see the vote icon appear on the webcast platform, along with all the proposals for the meeting. I would like to remind you that nonregistered shareholders who have not appointed themselves as proxy holders will not be able to exercise their voting rights virtually during the online meeting. They may, however, listen to the meeting by logging into the live webcast as a guest. I would now like to invite Ms. Torkia Lagacé to review today's voting procedures.

[Interpreted] Those of you who are registered shareholders or proxy holders entitled to vote at the meeting can access the proposals and vote. The number of proposals on which you will be asked to vote is displayed at the top of the screen. Voting will be available on all proposals at any time during the formal part of the meeting. You may vote right away at the time each proposal is brought forward or wait to vote on all proposals until after the last item on the agenda has been voted on, i.e., just before the 1-minute mark before the ballot is closed. You may change your vote until the ballot is closed. All votes represented by registered shareholders or proxy holders entitled to vote at the meeting will be tabulated and added to those received by proxy, and the preliminary result of the vote will be shown on screen at the end of the formal part of the meeting. A report of the final voting results will be available on SEDAR, and a report of the final outcome of the election of directors will be issued by press release. If you have already voted by proxy prior to this meeting, you do not need to vote again today as your vote is already reflected in the total proxies received to date. However, if you wish to change your vote, and you were the person named as proxy in the submitted proxy, the virtual vote will automatically cancel any previously completed and submitted proxy.

[Interpreted] I now submit Bombardier's consolidated financial statements for the year ended December 31, 2020. The independent auditor's report thereon, and the annual financial report to the shareholders. These financial statements have previously been made available to shareholders through the notice and access procedures. As these documents have been publicly filed and previously made available to the shareholders, we will not read them. Madam Secretary, please attach a copy of these documents to the minutes of this meeting. Mr. Masluch, have we received any questions in relation to this proposal?

[Interpreted] Mr. Chairman, I hereby confirm that we have not received any questions on this item.

[Interpreted] We will now proceed to the election of the directors of Bombardier. Bombardier's management proposes the election of 12 directors for the current fiscal year. As mentioned in the circular and in the introduction, Ms. Martha Finn Brooks and Mr. Vikram Pandit will be retiring from the Board of Directors at the close of the meeting. We, therefore, propose 2 new directors, Melinda Rogers-Hixon, and Eric Sprunk. May I now have a proposal for the election of these 12 nominees?

Mr. Chairman, my name is [indiscernible], and I'm a shareholder of Bombardier. I move that each of the following 12 persons be elected as Director of Bombardier until the next Annual Meeting of Shareholders of the corporation or until his or her successor is elected or appointed: Pierre Beaudoin, Joanne Bissonnette, Charles Bombardier, Diane Fontaine, Diane Giard, Anthony R. Graham, August W. Henningsen, Melinda Rogers-Hixon, Éric Martel, Douglas R. Oberhelman, Eric Sprunk, Antony N. Tyler. Does anyone want to second this proposal?

[Interpreted] Mr. Chairman, my name is [indiscernible], and I am a shareholder of Bombardier. I second this proposal.

[Interpreted] The proposal has been duly moved and seconded. Mr. Masluch, have we received any questions in relation to this proposal?

[Interpreted] Mr. Chairman, I hereby confirm that we have not received any questions on this item.

[Interpreted] Thank you. Shareholders are asked to vote on the election of each of the 12 nominees for the position of Director. I would ask the Secretary of the meeting to recall, for your benefit, the voting procedure.

[Interpreted] As the Chairman has mentioned, you must vote for each of the 12 nominees in the manner I explained earlier. The names of the 12 nominees are listed on the webcast platform. If you have already submitted your vote via the proxy form and do not wish to change your vote, there is no need to vote via the webcast platform as your vote has already been tabulated.

[Interpreted] We will now proceed with the appointment of Bombardier's independent auditors for the current fiscal year. You must also authorize the Board of Directors to set their compensation. The Board of Directors and management of Bombardier recommend that you reappoint Ernst & Young as Bombardier's independent auditors and to authorize the Board of Directors to set their compensation. May I have a result of this effect?

[Interpreted] Mr. Chairman, my name is [indiscernible], and I'm a shareholder of Bombardier. I move that Ernst & Young be appointed as Bombardier's independent auditors for the current fiscal year, that Ernst & Young hold office until the close of the next Annual Meeting of Shareholders of the corporation, and that Bombardier's Board of Directors be authorized to set their compensation.

[Interpreted] Does anyone wish to second this proposal?

[Interpreted] Mr. Chairman, my name is [indiscernible], and I am a shareholder of Bombardier. I second this proposal.

[Interpreted] The proposal has been duly moved and seconded. Mr. Masluch, have we received any questions in relation to this proposal?

[Interpreted] Mr. Chairman, I hereby confirm that we have not received any questions on this item.

[Interpreted] Thank you. I would ask the Secretary of the meeting to remind shareholders of the voting procedures.

[Interpreted] Dear shareholders and proxy holders, please vote on the appointment of Ernst & Young as Bombardier's independent auditors to hold office until the close of the next Annual Meeting of Shareholders of the corporation, and on the authorization of Bombardier's Board of Directors to set their compensation. As a reminder, if you have already submitted your vote via the proxy form and do not wish to change your vote, there is no need to vote via the webcast platform as your vote has already been tabulated.

[Interpreted] The agenda now calls for shareholders or their proxy holders to vote for or against the adoption of the nonbinding resolution on Bombardier's approach to executive compensation. You will find the text of this resolution on Page 17 of the circular. As explained in the circular, Bombardier's approach to executive compensation is to maximize the overall performance of the corporation through the individual performance of its executives. The goals of the policy are to attract, retain and motivate executives in order to increase business performance and enhance shareholder value, which supports the pay-for-performance commitment of Bombardier. May I entertain a proposal for the adoption of this resolution?

[Interpreted] Mr. Chairman, my name is [indiscernible], and I am a shareholder of Bombardier. I move the adoption of the nonbinding resolution on Bombardier's approach to executive compensation appearing on Page 17 of the circular.

[Interpreted] Does any shareholder or proxy holder wish to support or second this proposal?

[Interpreted] Mr. Chairman, my name is [indiscernible], and I am a shareholder of Bombardier. I second this proposal.

[Interpreted] The proposal has been duly moved and seconded. Mr. Masluch, have we received any questions in relation to this proposal?

Mr. Chairman, I hereby confirm that we have a question for MÉDAC, which I read out: my name is Willie Gagnon, and I am acting on behalf of the Mouvement d'éducation et de défense des actionnaires, MÉDAC. A recent article in the Canadian press mentioned that Glass Lewis and ISS recommended voting against Bombardier's compensation policy. What is happening? Why this? Have you been in contact with these 2 corporations? Can you give us an explanation?

[Interpreted] Yes, we've taken due note of their comments, their remarks. And in fact, these were the same comments as those they expressed last year. They also recognize that lot of adjustment has been made to executive compensation at Bombardier now that we've become a company focused on business aircraft. And the general comments have been that the adjustments have been made and that through our compensation, we recognize the fact that the company has changed in size from last year. And in fact, the comments have been very positive. The comments expressed by Glass Lewis and others are connected rather to decisions that were taken in the past, and are very similar to what was presented last year -- what was expressed last year, so this is basically already something we've seen and heard in the past, and we much appreciate the fact that they've taken the time to examine our policies.

[Interpreted] Thank you, Mr. Chairman. I hereby confirm that we have not received any further questions on this item.

[Interpreted] Thank you. The Board of Directors of Bombardier recommends that as registered shareholders or proxy holders, you vote for the adoption of this resolution. I would like to remind you that this is an advisory resolution and that the results of the vote will not be binding on Bombardier's Board of Directors. However, the members of the Human Resources and Compensation Committee will take it into account in their future review of the principal policies, programs or arrangements relating to executive compensation. I now ask the Secretary of our meeting to recall the voting procedure.

[Interpreted] Dear shareholders and proxy holders, I invite you to vote on the nonbinding resolution on Bombardier's approach to executive compensation. If you have already submitted your vote via the proxy form and do not wish to change your vote, there is no need to vote via the webcast platform as your vote has already been tabulated.

[Interpreted] Having completed all the items on the agenda, we invite you to vote if you have not already done so. We will close the ballot in 1 minute. [Voting]

[Interpreted] I confirm that the ballot is now closed. The scrutineers inform us of the following preliminary results. All directors were elected with over 97% of the votes cast. I congratulate them, and I welcome Melinda and Eric. Ernst & Young has been reappointed. Lastly, a majority of votes were cast in favor of the nonbinding resolution on Bombardier's approach to executive compensation. A report on the final voting results will be available on SEDAR. Now that we have dealt with all the items on the agenda, I propose to close the formal part of the meeting before moving on to an address by Bombardier's President and Chief Executive Officer, Mr. Éric Martel, followed by a question-and-answer period. I hereby declare the meeting closed. I would now like to invite Bombardier's President and Chief Executive Officer, Mr. Éric Martel, to take the floor to share his vision and the corporation's objectives.

[Interpreted] Thank you, Pierre, and hello to all. Thank you for being with us here today. Today marks exactly 13 months since I returned to Bombardier at the very beginning of the pandemic. Despite the unprecedented challenges that we faced, I'm extremely proud of the way in which the Bombardier teams have responded in every way. And I'm very honored to be leading this great company and helping to reshape it so that it continues to be a source of pride for all of our employees, our shareholders, our province and our country. There is already so much to be excited about and so much that has been done in the past year to demonstrate our ability to transform ourselves into a dynamic, profitable, resilient and forward-thinking company. If we think about the actions that we have undertaken over the course of the pandemic, we see how we have been versatile, resourceful and persistent. We have taken immediate actions to protect the health and safety of our employees and our customers in order to support government mandates, the idea being to slow the spread of the virus and to support our clients and suppliers to the best of our ability. Bombardier was recognized last week as we received the prestigious Mercury Award in occupational health and safety in that category for innovative health and safety program. This is a testament to our ingenuity and leadership. Similarly, we continued all of our strategic business activities and completed our repositioning as a company focused exclusively on business aviation. That we accomplished amid a global pandemic, we successfully closed 3 of the largest industrial transaction of the year: the sale of our CRG aircraft program to MHI; of our Aerostructure business to Spirit; and of our rail to Alstom. Completing these large transactions under the conditions we experienced is a real testament to the skill and commitment of our people. While we have chosen to exit the rail and commercial aerospace business, we can all be very proud of the innovation and advances Bombardier brought to these industries. I'd like to recognize all of our employees, past and present, who contributed to these incredible chapters in our history. Aside from these transactions, there were many other notable accomplishment for Bombardier in 2020. They include the successful ramp-up of the Global 7500 Aircraft, with 35 Global 7500 deliver in 2020 and having just reached the milestone 50th delivery in March, the aircraft continues to set the standard with its unmatched combination of size, performance and cabin comfort. Further highlighting the strength of our portfolio, the Global 5500 and 6500 were recognized by Aviation International News magazine as the best new business jet in 2020. None of these accomplishments would have been possible without the hard work done by our talented employees across Bombardier. I would like to take this opportunity to thank them for their many contributions and their dedication to the company, to each other and to our customers. As always, these milestones were achieved through total commitment to the highest ethical standards, sustainable business practices and support for communities in which we operate. Examples include Bombardier's leadership in development and in developing the next generation of Canadian innovators by once again offering more than 1,000 paid internships in 2021, and our leadership in sustainable aviation with the Global 7500 aircraft being the first business aircraft to be subject to an environmental product declaration. We are also very proud to contribute to vaccination efforts against COVID-19 in Montreal. This continues to increase health and safety of our employees, their families and members of our community, and this is a natural extension of our commitment to making a real and lasting difference. What does Bombardier look like as a business aviation focused company? Our goals are crystal clear, to lead the industry in our performance in the value we provide to customers and shareholders and in the manner which -- in which we operate, which is with the highest commitment to our people and our communities. In other words, our goal is to bring the same exceptional performance that has defined our aircraft and our talented employee to every aspect of our company. We began this chapter of our history on solid foundations, and we can continue to build, proudly headquartered here in Montreal, Quebec, Bombardier is present in more than 12 countries and has more than 13,000 employees worldwide spread across our production and engineering facilities and our customer support networks as well as a global fleet of some 5,000 aircraft in service. Leading product portfolio and a strong $10.4 billion backlog, the 5-year strategic plan we laid out at Investor Day highlight the financial target we've set: Deliver solid financial performance to reach $7.5 billion in revenue in 2025; reach $1.5 billion of EBITDA in 2025; and generate more than $500 million free cash flow in 2025. As we settle into being a business aviation company, we've set 4 important objectives as well as supporting action and strategies to achieve these goals, and we've already been hard at work putting them into motion. The first is to build a sustainable capital structure. We are redesigning our operations and transforming the way we work within the context of reducing costs across the business by at least $400 million between now and 2023. We've already identified reductions totaling $325 million or 80% of this amount. The overall goal is to make the company more efficient and agile, a company capable of generating stronger financial results under current market conditions, while establishing a lower cost base for growth once the market recovers. We will deliver predictable financial performance. This will be driven in large part by the growth of our aftermarket services and by accelerating diversification into the high-margin specialized aircraft business. With major expansion project underway in Singapore, London, Melbourne and Miami, the largest aftermarket footprint expansion in Bombardier history, we are adding significant new capacity, which position us well to capture a greater share of this growing market, and to bring a higher percentage of our 5,000 in-service aircraft owned. Equally exciting, multi-role platforms, aircraft can be performed medevac, transport and search and rescue mission with a single platform are getting more and more attention. The versatility of our aircraft, including their range, their reliability, low operating costs, exceptional field performance in white cabin, make Bombardier Jet, especially attractive. As we focus on operational excellence and build a culture of accountability throughout Bombardier, we will be able to ensure our financial results are predictable. We are implementing a process for continuous improvement across the company, which will provide us with all the necessary tools to standardize project management and accountability measures to ensure that we deliver on our commitments and do what we have said that we will do. Our third goal is to focus on our customers and to provide them with unparalleled aircraft owner experiences. We must be extremely close to them and respond to their needs. We must also be active across all product life cycles over and above the initial sale and what I mean by this is service, refurbishing, upgrades and resale. To reach our goal, we have many exciting plans. In particular, we will harness the power of mega data and digital to connect our fleet of more than 5,000 Bombardier aircraft and maintain our leadership position with global and challenger aircraft lines to be able to continue to innovate. This will help us expand our offering and provide extraordinary service to our customers. We'll put the focus on our people and work towards engaging all our employee and stakeholders. We will do this by enacting important diversity and inclusion initiative, investing in recruiting, developing and retaining our people and launching a new environmental, social and governance program. I have also spent a lot of time talking about resetting our culture to become customer- and employee-centric, to value performance and honor our commitment to be transparent and authentic at all times and at all levels of the organization, to work together with a team spirit and to making operational excellence fundamental in all that we do. In shifting our culture, we also reaffirm our commitment to pursuing ambitious environmental, social and governance goals. These include reaching a 25% reduction in greenhouse gas emission, adding more than 30% women in management and reaching an employee engagement score of more than 75%, all by 2025. Over the last month, I've been speaking with our leadership and have been sharing the detail of this plan with our management team and expressing what we need to do to ensure its success. I want to share with you that I am invigorated by these discussions. There is a real sense of excitement across Bombardier, a feeling of energy that we are embarking on a new and exciting journey together. Everything is possible, and our team is on board and ready to get the work done. If the results of the first quarter release this morning are any indication of what lies ahead, we are on the right track. I'm confident that we are doing what it takes to ensure that Bombardier is an exceptional company, a company that can once again deliver successfully on the world stage in an ethical, responsible, accountable and profitable manner. With our unparalleled product portfolio and the collaboration of our talented employees, Bombardier will be more resilient and profitable. And all our employees, customers, suppliers and shareholders will be proud of this over the long term.

[Interpreted] Thank you, Éric. We will now take questions or comments from our shareholders. [Operator Instructions] Just as a reminder, questions need to focus on Bombardier's activities and cannot be asked around personal affairs. Mr. Masluch, the floor is yours.

Thank you, Mr. Chair. The first question comes from Harry Timmers .

About increasing its rating with rating agencies to get better interest rates on the debt and be able to renegotiate its upcoming existing debt load?

Bart, if you could answer this question.

Thank you. Thank you very much, Pierre. And thank you for your thoughtful question. Definitely reducing the amount of debt that we have on the company's balance sheet in order to achieve a sustainable capital structure and reduce our interest cost is a top priority for the company. To this end, we've recently deployed $2.4 billion of cash on our balance sheet to debt reduction. And as a result, our annual interest expense is going to be going down by about $200 million per year going forward. As well in the coming months, we do expect to further reduce our outstanding debt and interest expense as we deploy more of the cash that we have on our balance sheet currently. Now these steps are obviously most important to first provide Bombardier with a sustainable balance sheet and cost structure, but absolutely, they could very well result in higher credit ratings over time and further reductions on credit costs as we go forward in the future. Thank you.

Thank you, Bart. Any other questions?

[Interpreted] Yes. The next question comes from Josh Marish.

Stack up against the incoming competition from Gulfstream and Dassault?

Éric, I'm sure you'd love to answer this question.

So clearly, we strongly -- we feel very strong about our positioning with our jet today. We have, first of all, a very comprehensive portfolio of products. We are well equipped to compete in the 2 markets we're in, in the medium and large segment. We have on the Global -- and yes, there is a new competition coming, but our Global 7500, which is the flagship of Bombardier, but also the flagship of the industry, is actually extremely well received by the customer base. As I mentioned earlier, we just delivered our 50th airplane. And the airplane is performing extremely well in service today. We are already at more than 99.7% of reliability, so that's clearly a focus of us, and it's well received, as I mentioned, by the customer base. I think the comment that we're getting on our platform are the uniqueness of our craftsmanship and interior, which has always been a differentiator for Bombardier compared to our competitor. The reliability of the airplane has always been a differentiator also. And the flagship, the 7500, continue into that direction. And of course, I would say one of the comment that I hear the most these days from our customer is the uniqueness and how smooth is the ride on a 7500. I've had the opportunity myself to fly the airplane, and this for me was an unprecedent, never seen before. So the comfort of the airplane, the size of the cabin, the quality of the craftsmanship, the reliability of our product is unique and could be in a position to compete with any other airplane that will either -- is already being delivered or will be delivered in a few years from now. And within the next few years also, we will have already a very solid installed base on the 7500 around the world.

[Interpreted] Thank you, Eric. Can we take another question?

[Interpreted] Yes, Mr. Chair. The next question comes from Jay Carlson.

Class B shares. Bombardier's corporate earnings have been poor for many years now. While there have been glimmers of hope and positive news, most of it has been short-lived. My question is, will Bombardier ever again achieve sustained positive long-term earnings for it to be able to survive as a viable business free from government handouts?

So I can answer that question, Éric Martel here. Clearly, the plan that we've laid out is achievable. In -- first of all, we have a market, and that market is actually a lot more resilient than people may think. The services business and even the Global platform are extremely resilient, capable of absorbing economical downturn. So that's question number one. We are extremely well-positioned with our product portfolio, as I just mentioned in the last question. We are competing in the medium segment. We are the #1 there, very strong portfolio and the Challenger is renown and capable and reliable the best performer out there. Our global platform has just been a refresh. We are owning today the flagship of the industry with the 7500, as mentioned also, the 5500 and 6500 as -- were named best entry into service last year, and our services business also will be growing. And also, this is a very resilient and capable business for us with around 5000 airplane flying around the world. So we feel very strong about our plan. We also have a plan to reduce our cost, which is extremely well on its way by $400 million in 2023, and we also have a plan to improve the margin, which is also actually exactly in line with our plan to improve the margin on the 7500 airplane. So between the service business, the unit cost of the 7500 going down, our $400 million cost reduction program, we are extremely well aligned to have a sustainable performance. So -- and with the ability also to absorb any shock that the economy may have, as this is something we don't control. But we set our business exactly to do what you were saying as a business that can deliver and perform on a regular basis.

Thank you, Éric. The only thing I may add is that, yes, the reorganization took some time, but as Éric said, we feel very confident about our positioning today with focus on business aircraft and our ability to have sustainable profitability through the years. Another question? Do you have another question?

[Interpreted] Yes. The next question comes from [indiscernible]. What are you going to do to restore the business reputation amongst the community, the local community?

[Interpreted] That's an excellent question, and it's clearly a concern on a daily basis. I believe we did need to get through this reorganization, which we have managed to complete successfully since the beginning of the year. I believe that all of this will be reestablished little by little as we progress through our plan as we deliver our -- on our business goals quarter after quarter, and knowing that we have gotten off to a good start, we are very proud of the results that we have announced this morning. Everyone is very proud of the results announced this morning. And knowing that we have employee commitment, that's always been something that's very unique to Bombardier. Employees are very proud to work with Bombardier, and we need to find that pride again. Our 13,000 employees are always our best ambassadors to talk about our organization, and we take strides to be able to keep up this pride and reinforce our situation. So it will come back, it will bounce back, we have to be patient. And I think we're doing all the right things going in the right direction to do all of this, we want to be a transparent company. I keep saying that we have nothing to hide. We want to be much more present. Clearly, the pandemic is limiting us right now in our capacity to be before the public, but we have to explain our business. We create 13,000 employees, 7,000 in Quebec. These are good paying jobs in a business recognized internationally. So I believe that we do need to be very proud of our organization. Bombardier products are across the world. We are one of the best aviation builders in the world, if not the best, for the quality of our products, and we are very, very proud. And I always like to say that we can count, on one hand, the number of countries who can produce aircraft from A to Z. And I'm very pleased because in Montreal, we can create an aircraft from A to Z, and we can build it, and we can have Quebec stand out on the international stage. So we need to look at to this pride. I think I've shown you that I have this pride myself, but I feel like our results will simply become better and better when we start to deliver constant results and if we continue to be the incredible company that we are in Quebec. Thank you very much. We often hear in your discussion, you talked about employees and communities and the Board recognizes that Bombardier's success, it does stem from employees in the community and that trust that we've established. So clearly, that is a priority for us to be able to ensure our long-term success.

Mr. Chair, the next question comes from Brendan Bernhard.

Deal with the global shortage of qualified aviation technicians?

I can answer this question. Thank you. I'll answer the question in English. So this is clearly a challenge for the entire industry this day as the aviation industry becomes more global, there's a need. We've been extremely proactive, Bombardier. I was with my team actually just last week discussing it, and we have detailed plan by locations whatever for in Montreal or if we're in the Fort Lauderdale or in Berlin or all around the world, in Singapore, to make sure that we are looking ahead and that we are working with schools to make sure that we bring the right talent internally to do that. I've mentioned also earlier on in my speech that we have about 1,000 students that were working with us last year and about the same thing this year. So this is important that we give people that are either university student or technician, the visibility on our company, what we're doing so that they know us more and feel that they could join our company. So it is clearly a challenge around the world, but I can tell you that Bombardier is very, very proactive in making sure that we're not going to have any shortfall in the next coming years.

[Interpreted] Yes, we have a question from [indiscernible].

[Interpreted] Congratulations for the performance of the just concluded quarter. In view of the many future commercial opportunities connected with space, I'm wondering whether the development of space operations is one of your strategic priorities? Thank you.

[Interpreted] Space activities, the space operations. Well, look, clearly, our focus is going to continue to be in the aeronautical industry. If you're thinking about other areas of that industry, we'll always be open to looking at industries where Bombardier can contribute, thanks to the high level of know-how of our employees. As I said, what we do in Montreal is unique. We can manufacture planes from A to Z, and very few other companies can do this worldwide. So yes, new business are going to be created, [indiscernible] and others, for example, but we're very focused on business aircraft today. But every year, we review our strategic plan to enhance it. So of course, we're going to keep an eye open for new opportunities. But for the time being, in the short term, our focus is going to be entirely on business planes. The business aircraft sector is going to grow in the coming years, and we want to be sure that we get a large share of that market. Mr. Masluch, we only have time for one more question.

[Interpreted] Mr. Chairman, the last question comes from Harry Timmers once again.

For shareholder value, the share price of Bombardier has been depressed for 2 years now. Is there a plan to help bust the share price?

Well, I can start with the answer, and Éric, I'm sure will have a few words. The complex reorganization we've been through is exactly focused on that, how can we create value for our shareholders. And we feel that by concentrating our business and making a focus on business aircraft, that's a great way to get back to sustained profitability for the company. So that's exactly what the management team has put in place to start a 5-year program that shows a significant progress in profitability, which, therefore, will reward our shareholders. So Éric, maybe if you want to add?

Thanks for highlighting those, because this is exactly what our plan is doing here, create value for all the stakeholders and the shareholder by being a more profitable, more predictable company in terms of our financial performance. And our plan is real. The cost saving program that we've put in place to leverage our -- to improve, I should say, our profitability is clear. It's happening. We already had $25 million of benefit we said this morning in our first quarter, it will be a bit more than $100 million this year, and we're targeting $400 million of improvement by 2023. We also have the global unit cost that is going down. We have the service center growing as we are building new capability and growing that business, which is also going to have a solid contribution to our margin. So all this put together, plus us addressing our balance sheet challenge that we had and reorganizing, this is altogether will definitely make our company more profitable, more attractive and more predictable.

[Interpreted] The question period is now closed. Our webcast platform provider is keeping a complete record of all questions received today. In the event that due to time constraints, your question could not be addressed, we will endeavor to reply to it by e-mail after this meeting as long as you provide your contact information when submitting your question. On behalf of the company, I would like to thank you for having attended this meeting and for your continued commitment to Bombardier. I wish you and your families all the very best. And I hope that you will remain safe and healthy. Goodbye, and thank you. [Statements in English on this transcript were spoken by an interpreter present on the live call.]