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.