STATEMENT ON BOMBARDIER RECREATIONAL PRODUCTS

April 3, 2003 - In a press release issued earlier today, Bombardier Inc. published its financial results for fiscal year 2003 and announced a recapitalisation program, featuring among other things, an asset divestiture including the sale of Bombardier Recreational Products.

The recreational division includes Johnson and Evinrude outboard engines, personal watercraft, sport boats, snowmobiles and all-terrain vehicles.

Is there a curse on the Evinrude/Johnson brand? Despite the promise of great things after Bombardier's take over of the OMC company last year, we now have Bombardier CEO Paul M. Tellier directly referring to the sale of the "Bombardier Recreational Products" which includes the marine engine division.

"The divestiture is one of several initiatives designed to strengthen the company's balance sheet and refocus the corporation on the aerospace and transportation businesses."

"We will rebuild our credibility with investors with the action plan we are announcing today," said Tellier. "The sale of our recreational products business provides a good balance between our asset divestitures and the equity offering. Combined with our cost reduction programs, it gives us the financial flexibility we need going forward."

Are we seeing the final chapter of this once great brand being written? Pundits are laying the blame squarely at the feet of the previous OM management and the failed "FICHT"

Bombardier who promised so much, where placed on the back foot by the clear poor design of these engines. Within weeks of Bombardier about to re-commence production they had to recall all 1999 & 2000 Fichts. Text of Bombardier's letter to dealers follows:

"As we prepare to restart outboard production, an issue of significant importance has come to our attention. This issue has to do with the recall of all 1999 and 2000 Evinrude Outboards with FICHT technology in the 200- and 225-horsepower categories that have not been upgraded and were built by OMC. These units may suffer fuel leaks that could potentially result in fire or explosion."

Recreational Products division confident about the future

In a separate statement today, Bombardier's Recreational Products division stated its confidence in its future.

"Indeed, because of our profitability, the quality of our assets and our international reputation as a leader in most of our markets, Bombardier Recreational Products is very attractive to investors," the division acknowledged.

"With the growth and success experienced over the recent years, we are well positioned to compete on our own and to become even more successful," the division said. "Our group offers the best product line-up in the market, manufactured by a highly creative, competent and motivated group of employees making important contributions to their communities world-wide."

The division also expressed that it is "business as usual" in all its operations.

Hmm, I am sure there is more to come. Attempts to contact Bombardier Australia for comment have been unsuccessful to date.

Source: http://www.boatbiz.com/index.asp