Bombardier (TSE:BBD.B), the business jet maker, is finding itself embroiled in some labor troubles, and its latest attempt to break the logjam and return to the status quo isn’t looking good. Investors aren’t pleased either, as Bombardier shares are down modestly in Wednesday morning’s trading. New reports say that Bombardier rolled out what it called its “final proposal” to Unifor, the Canadian workers’ union that’s covering Bombardier’s workers. Unifor rejected the proposal, which means the strike remains on.
Negotiations, however, will continue between Bombardier and Unifor, though the latest reports note that “…both the parties remain apart on key union priorities.” The strike covers 1,350 workers who are involved in the Global series aircraft, and much of the work involved is done at the Pearson International facility in Toronto.
A Terrible Time for Labor Problems
While there’s never exactly a convenient time for a labor strike and a production stoppage—that’s why they’re useful tools for unions—this one comes at an especially bad time for Bombardier. Bombardier was starting to see rising demand for its Global jet line to be used for “special missions.” About three weeks ago, it inked a deal with Germany’s Aero-Dienst GmbH to offer a Challenger 650 as a medevac jet, and this might have been just the beginning.
With its jets becoming more than just fancy playthings for the wealthy, Bombardier can’t afford to become hamstrung on the sidelines. That should lend it extra motivation to get this labor dispute settled and its people back to work making jets that are discovering a brand new use case and a brand new market.
Is Bombardier Stock a Good Buy?
Turning to Wall Street, analysts have a Strong Buy consensus rating on BBD.B stock based on 10 Buys, one Hold, and one Sell assigned in the past three months, as indicated by the graphic below. After a 35.22% rally in its share price over the past year, the average BBD.B price target of C$102.72 per share implies 18.88% upside potential.
