What the blocked Siemens-Alstom rail deal could mean for Bombardier

Bombardier Inc. (BBDb.TO) replaced the head of its troubled train unit after a series of missteps on key contracts.

Danny Di Perna, a former Pratt & Whitney executive who led Bombardier’s aerostructures and engineering business, was appointed president of the Transportation unit, the company said in a statement Thursday. He succeeds Laurent Troger, who is stepping down after 15 years with the company. The changes take effect immediately.

North America’s biggest maker of rail equipment is working to overcome a string of stumbles on high-profile projects in France, Switzerland and cities such as Toronto and New York. Montreal-based Bombardier is counting on rail, its largest business, to contribute half of the US$20 billion in sales the company is targeting for 2020.

The move came as a surprise to some observers. “There were no apparent signs of a pending change, and Mr. Di Perna was appointed to his prior role as president of aerostructures in November,’’ Cam Doerksen, a National Bank Financial analyst, said in a note to clients.

Third Chief

Di Perna becomes the third person to run the rail business since December 2015. He was a 24-year veteran of United Technologies Corp. where he was an executive at its Pratt & Whitney engine division. He spent a short time at General Electric Co. before joining Bombardier last year. Bombardier Chief Executive Officer Alain Bellemare is also a Pratt alumnus.

In November, Bombardier replaced the head of its North American rail unit with a former chief executive of New York’s Metropolitan Transportation Authority.

While Bombardier’s earnings from rail have been increasing in recent years, the company also garnered attention for delays and production-related issues.

Last month, Switzerland’s federal railway took the Canadian manufacturer to task for delivering new train sets that fell short of standards, causing service interruptions and delays. New York’s MTA pulled dozens of Bombardier subway cars out of service because of reliability problems.

In December, Canada’s Via Rail selected Germany’s Siemens AG instead of Bombardier for a $969 million order of locomotives and passenger cars. On-time delivery was a key reason for the decision to choose Siemens, Via Rail said.

To replace Di Perna as head of aerostructures, Bombardier promoted Paul Sislian, who previously acted as chief operating officer of the company’s business jet unit.

Bombardier’s widely traded Class B stock rose 5.4 per cent to $2.16 in Toronto Thursday. That takes its gain this year to 6.4 per cent, short of the 9.6 per cent climb posted by Canada’s benchmark stock index.