Siemens and Alstom are going to MERGE!

[Transit geek]

Bombardier Inc. isn't in hot water with just its aerospace business.

Last Tuesday, two of Bombardier Transportation's biggest competitors - namely Siemens Mobility and Alstom Transport, announced plans to merge, which would form a combined European rail business under the name of Siemens Alstom. The new company's revenues of US$18 billion would exceed Bombardier by far and would present a bold attempt to dominate the competition out of China's massively expanding CRRC Corporation.

This is probably the most alarming thing I have ever learned of since I became a railfan in my high school years. All the companies mentioned above have made significant ground in the North American market. What is going to happen to all these vastly different products once they essentially are put under the same roof?

UPDATE: News just came in that Bombardier wanted to merge with Siemens, but Siemens refused this deal, largely due to Bombardier's $9 billion debt. And that opened the floodgates for Alstom, and that's just what ended up happening. I'm really shaking my head now, and I'm sure most of us here at CPTDB would be, too.

[smallspy]

I don't know why you would be surprised or shaking your head. It has been patently obvious for quite some time that there were going to have to be a large merger in the railway manufacturing industry to compete with the likes of CRRC. All of the smaller mergers that have been going on for the past 5 years were simply setting the stage for this one.

 

And don't think that for a second it ends here. There will be another couple of mergers before it is all said and done. It wouldn't even surprise me to see Bombardier swallow up one of the other medium-sized manufacturers, although they are very well diversified already.

 

By the way, don't think that Bombardier is somehow screwed in all this. Remember that they are the third- or fourth-largest railway supplier on the planet, and this merger doesn't change that position (Alstom is considerably smaller than Siemens or Bombardier). All it does is widen the gulf between the largest players and the rest of the field.

 

Dan

[TheAverageJoe]

15 hours ago, Transit geek said:

Bombardier Inc. isn't in hot water with just its aerospace business.

Last Tuesday, two of Bombardier Transportation's biggest competitors - namely Siemens Mobility and Alstom Transport, announced plans to merge, which would form a combined European rail business under the name of Siemens Alstom. The new company's revenues of US$18 billion would exceed Bombardier by far and would present a bold attempt to dominate the competition out of China's massively expanding CRRC Corporation.

This is probably the most alarming thing I have ever learned of since I became a railfan in my high school years. All the companies mentioned above have made significant ground in the North American market. What is going to happen to all these vastly different products once they essentially are put under the same roof?

UPDATE: News just came in that Bombardier wanted to merge with Siemens, but Siemens refused this deal, largely due to Bombardier's $9 billion debt. And that opened the floodgates for Alstom, and that's just what ended up happening. I'm really shaking my head now, and I'm sure most of us here at CPTDB would be, too.

France has openly said that there may be room to include Bombardier into this transaction/merger later on.

[smallspy]

3 hours ago, TheAverageJoe said:

France has openly said that there may be room to include Bombardier into this transaction/merger later on.

Maybe it's just me, but I don't see Bombardier getting involved in this. To be honest, I can't see any other manufacturers joining this particular union - it's already at the point where it may be "too big". As it is, it's going to take them years and years to untangle their individual supply chains to rationalize them.

 

Dan

[TheAverageJoe]

16 minutes ago, smallspy said:

Maybe it's just me, but I don't see Bombardier getting involved in this. To be honest, I can't see any other manufacturers joining this particular union - it's already at the point where it may be "too big". As it is, it's going to take them years and years to untangle their individual supply chains to rationalize them.

 

Dan

True as the 3 basically have the whole European market which I do not see EU letting happen. 

[dbdb]

Bombardier needs to split into two firms along the rail and aerospace lines.  That would be a good first start.  The challenges surrounding each of those markets spaces is quite different and really needs to be structured in a way that attracts the best corporate leadership and investment dollars to each.  As it stand now if I was a conservative investor who was comfortable with the rail business I'd be really spooked by the troubles dogging the aerospace side of the house.  Similarly on the high risk, high reward aerospace side of the house, the bleak looking prospects and huge debt on the rail side of the house would scare me. 

In fact, if Bombardier had split before the C-Series program, they likely would have attracted more private investment and they wouldn't have given Boeing and Embrarer the ammunition to claim it's receiving unfair subsidies, that could ultimately kill the entire company.

[smallspy]

19 hours ago, dbdb said:

Bombardier needs to split into two firms along the rail and aerospace lines.  That would be a good first start.  The challenges surrounding each of those markets spaces is quite different and really needs to be structured in a way that attracts the best corporate leadership and investment dollars to each.  As it stand now if I was a conservative investor who was comfortable with the rail business I'd be really spooked by the troubles dogging the aerospace side of the house.  Similarly on the high risk, high reward aerospace side of the house, the bleak looking prospects and huge debt on the rail side of the house would scare me. 

In fact, if Bombardier had split before the C-Series program, they likely would have attracted more private investment and they wouldn't have given Boeing and Embrarer the ammunition to claim it's receiving unfair subsidies, that could ultimately kill the entire company.

With the exception that they are not selling stocks from each side, they are already set up largely as you are suggesting. There are very separate Bombardier Transportation and Bombardier Aviation divisions, with separate accounting and separate corporate structures.

 

Dan

[OC Transpo/STO Fan]

On 2017-09-28 at 6:25 PM, Transit geek said:

Bombardier Inc. isn't in hot water with just its aerospace business.

Last Tuesday, two of Bombardier Transportation's biggest competitors - namely Siemens Mobility and Alstom Transport, announced plans to merge, which would form a combined European rail business under the name of Siemens Alstom. The new company's revenues of US$18 billion would exceed Bombardier by far and would present a bold attempt to dominate the competition out of China's massively expanding CRRC Corporation.

This is probably the most alarming thing I have ever learned of since I became a railfan in my high school years. All the companies mentioned above have made significant ground in the North American market. What is going to happen to all these vastly different products once they essentially are put under the same roof?

UPDATE: News just came in that Bombardier wanted to merge with Siemens, but Siemens refused this deal, largely due to Bombardier's $9 billion debt. And that opened the floodgates for Alstom, and that's just what ended up happening. I'm really shaking my head now, and I'm sure most of us here at CPTDB would be, too.

Why so surprised? Also, why are you shaking your head at this?

[Transit geek]

36 minutes ago, OCTranspo/STO Fan said:

Why so surprised? Also, why are you shaking your head at this?

Both Siemens and Alstom have competing products in the same fields. For example, the Siemens S70 and Alstom Citadis Spirit. Then, for the rest of the world, Siemens has its Avenio series, and Alstom the other models in its Citadis lineup. Same goes with Siemens Inspiro and Alstom Metropolis. With both companies under the same roof, would one of these models be discontinued, or merged into another? Or would they remain separate and complicate Siemens Alstom's product offerings in this category?

[OC Transpo/STO Fan]

3 minutes ago, Transit geek said:

Both Siemens and Alstom have competing products in the same fields. For example, the Siemens S70 and Alstom Citadis Spirit. Then, for the rest of the world, Siemens has its Avenio series, and Alstom the other models in its Citadis lineup. Same goes with Siemens Inspiro and Alstom Metropolis. With both companies under the same roof, would one of these models be discontinued, or merged into another? Or would they remain separate and complicate Siemens Alstom's product offerings in this category?

OK, I see. I still agree with smallspy, though.

[TheAverageJoe]

5 hours ago, Transit geek said:

Both Siemens and Alstom have competing products in the same fields. For example, the Siemens S70 and Alstom Citadis Spirit. Then, for the rest of the world, Siemens has its Avenio series, and Alstom the other models in its Citadis lineup. Same goes with Siemens Inspiro and Alstom Metropolis. With both companies under the same roof, would one of these models be discontinued, or merged into another? Or would they remain separate and complicate Siemens Alstom's product offerings in this category?

Gonna take years to make the product and supply line simple

[webfil]

Aaaand that's a no-go.

E.U. Blocks Siemens-Alstom Plan to Create European Train Giant ― The New York Times