Single focus
Pure play versus diversification
They look odd, with their two big wheels up front and single wheel in the rear. The company says it has a lower center of gravity than a motorcycle, stability control, and an automatic transmission.
That company is Bombardier Recreational Products—or BRP—an offshoot of the same Bombardier that makes the Challenger and Global series of business jets. BRP also makes the Ski-Doo snowmobile, the Sea-Doo jet ski, an off-road four-wheeler ATV version of the Spyder, an electrically powered Can-Am two-wheel motorcycle, Alumacraft motorboats, and—drum roll—the Rotax series of engines that power so many LSAs and experimental category aircraft, plus the Can-Ams, Sea-Doos, and Ski-Doos.
BRP and a slew of other well-known companies once came under the Bombardier umbrella. But, like Bombardier’s Learjet division, its Short Brothers aerostructures division, its de Havilland division, its fractional company Flexjet, its CAE pilot training firm, its rail transportation company, and its CSeries business jet program, BRP was sold off by 2020.
Now Bombardier is a “pure play” company, with a sole focus on its business jets. I see from the General Aviation Manufacturers Association’s 2022 year-end shipment report that Bombardier sold 123 jets worth $6.046 billion. Apparently, that’s enough to help support a 14,000-employee company. But there are a lot of other, smaller “pure play” general aviation manufacturers that sold much, much less. Some shipment figures were as low as the single digits. How can you stay in business with sales levels like that? Sure, there is income from parts and maintenance, but still, it makes you wonder how some keep afloat. Take out loans, find a partner, or go into debt, I suppose.
Diversification helps any company weather revenue storms. The prize for the most diverse offerings in a GA company must surely go to Textron Inc. It not only owns Textron Aviation—GA’s industry giant—its holdings also include helicopter manufacturer Bell, E-Z-GO golf carts, Arctic Cat snowmobiles and ATVs, and Textron Systems’ Ripsaw, which is an unmanned tank, NightWarden drones, Commando line of armored vehicles, and its next-generation squad automatic rifle program. Then there’s the Big Dog wildland fire truck. Add the revenue from all those programs to Textron’s 2022 GA aircraft sales of $3.625 billion and the company should be able to ride out the economic ups and downs.
Of course, with pure play you’re banking on the strength of a narrow product line, a buoyant stock market, and other sources of funding. Word has it that Bombardier overspent on the CSeries, putting the company on an uneasy footing and forcing the sell-offs. I don’t think my Can-Am purchase will help out much.
