Bombardier Inc., the US$3.5 billion Canada-based manufacturer of regional aircraft, business jets and rail transportation equipment, explained to its shareholders the impact the Canadian dollar is having on profits.
In a speech given May 30, Laurent Beaudoin, chairman and CEO, noted that much of the efforts by company employees are offset by "current dramatic and rapid rise of the Canadian dollar.
"If the Canadian dollar continues to gain ground, manufacturing companies that export will soon have almost no other choice but to increase the U.S. dollar content of their business or move production to countries where costs will allow them to be more competitive," Beaudoin told shareholders.
In first-quarter 2007, which ended April 30, 2006, profits declined to US$24 million from year-earlier results of US$55 million on restructuring costs and lower revenue.
Beaudoin also told shareholders that the Bank of Canada should take action to regulate the Canadian dollar.
"While I understand the Bank of Canada's role is to control inflation by varying interest rates, I have a hard time understanding why it only steps in when there is a loss of confidence in the Canadian dollar, and not in the opposite case when there is excess confidence that leads to an overly rapid appreciation of our currency."