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Thu, Feb 12, 2004

Bombardier Asked to Adopt 'Customer Code of Ethics'

Shareholder Unhappy With Purchase Process

Citing poor treatment of customers as a reason for the declining sales of Bombardier business jets, and the Company's disappointing stock performance, a Bombardier shareholder is calling for the Company to adopt a "Customer Code of Ethics and Satisfaction."

This new Customer Code, proposed in a Shareholder Resolution submitted by Michael Huffington, President of Hermes Aero, Inc., would commit Bombardier, Inc. to "the highest standards of behaviour in all of its relations with customers and prospective customers." It would "pledge the Company to deal honestly with customers and prospective customers at all times, to honour its contracts and commitments, to treat its customers with fairness, respect and candour, [and] to ensure that customers are provided with complete and truthful information at all times and in a timely manner."

Proposal: Customer Code of Ethics and Satisfaction

Be It Resolved That the corporate bylaws be amended to include a "Customer Code of Ethics and Satisfaction" to ensure that the Company adheres to the highest standards of behaviour in all of its relations with customers and prospective customers to ensure customer satisfaction. The "Customer Code of Ethics and Satisfaction" will pledge the Company to deal honestly with customers and prospective customers at all times, to honour its contracts and commitments, to treat its customers with fairness, respect and candour, to ensure that customers are provided with complete and truthful information at all times and in a timely manner and to ensure unprecedented customer satisfaction in all aspects of the customer's dealings with the Company.

Within three months of the adoption of this resolution, the Board of Directors shall cause the Code to be published in an appropriate manner for the information of the Company's shareholders, customers and prospective customers.

Be It Further Resolved That the corporate bylaws be amended to require the appointment, within three months of the adoption of this resolution, of a "Customer Ethics and Satisfaction Officer" whose duties and responsibilities shall include the duty to monitor the Company's compliance with the Code and to report annually to the shareholders regarding the Company's compliance with the Code. The "Customer Ethics and Satisfaction Officer" shall also serve as the "advocate for the customer" within the Company and shall develop procedures whereby customer-raised issues may be effectively dealt with to ensure customer satisfaction. 

The office of Customer Ethics and Satisfaction Officer shall be held by an individual who holds no other officer position within the Company and, after the initial appointment, the office of Customer Ethics and Satisfaction Officer shall not remain vacant for more than 60 consecutive days at any time.

The Shareholder Resolution, if circulated by Bombardier in its proxy circular, would be voted on at the Company's annual meeting in June. It calls for the appointment of a "Customer Ethics and Satisfaction Officer" whose duties and responsibilities would include the monitoring of compliance with the Customer Code. This officer would also serve as the "advocate for the customer" within the Company and would develop procedures whereby customer- raised issues may be effectively dealt with to ensure customer satisfaction.

Mr. Huffington said, "I am submitting this resolution as both a shareholder, who has seen Bombardier's stock price decline by more than 50 percent over the past two years -- along with a fifty percent reduction in the dividend rate -- and as a customer who has experienced first-hand what it's like to do business with this Company. In both instances, Bombardier has performed miserably."

"Bombardier's business jets are competitive with anything that's on the market," Mr. Huffington said, "and yet they delivered only 77 business jets in fiscal 2003, compared to 162 in fiscal 2002. I believe that they sold 85 fewer aircraft in fiscal 2003 not only due to a lackluster economy, but also because Bombardier doesn't always deal with its customers in a fair and professional manner. That's why I am submitting this proposal. As a shareholder, I want to do what I can to help restore this Company to the profitability it once enjoyed."

Mr. Huffington said that for the past eight years his company, Hermes Aero, has been trying -- without success -- to purchase a new Global Express business jet from Bombardier Aerospace. During this period, Hermes Aero paid millions of dollars in deposits and met the terms of the Purchase Agreement, and yet it still does not have an aircraft. Why? Bombardier tried to insist that Hermes Aero accept a Global Express that had been hit by lightning.

"You wouldn't accept a new car that had been seriously damaged before delivery, no matter how well it was repaired. And, there isn't a judge anywhere who would force you to make such a deal. Yet, Bombardier expected Hermes Aero to accept this $38 million airplane that had been damaged before delivery. No one should be forced to fly in a damaged plane. There's no exit ramp at 45,000 feet," Mr. Huffington commented.

Mr. Huffington added, "You would think that a company which has laid off more than 3,000 employees over the past year and has had to secure C$600 million in government loan guarantees for potential purchases of its regional jets would do everything it could to increase and encourage sales. Think how many jobs the sale of an additional 85 business jets would have saved. Even the sale of just one US $38 million aircraft would have a positive impact."

"My own personal experience, however, is included only by way of example. In the final analysis, this shareholder resolution isn't about me or my company; it's about Bombardier's attitude that has caused employees, shareholders and customers to suffer because of the inexcusable way in which this Company has treated some of its customers," he added.

FMI: www.aero.bombardier.com       

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