Bombardier transportation and the Adtranz Acquisition

1. What is this case about (250 words)? 2. What are the Key Success Factors of the railway equipment industry ? 3. Draw a schematic representation of Bombardier’s business portfolio before and after the Adtranz acquisition. How critical is the European railway market for Bombardier? (From a business and a corporate level perspective). 4. Is Adtranz an attractive acquisition target for Bombardier? What are the arguments for and against? 5. What should Lortie do with Adtranz? Integrate it ? Leave it as a stand alone? A mix? Justify. What should be his focus in Europe in the next three years : growth or profit ? Justify. 6. Propose an organizational structure for the Railway SBU of Bombardier. Justify.
Question 1
Bombardier transportation was one of three major operating groups of Montreal, Canada-based Bombardier Inc, it was one of the world’s largest manufacturers of passenger rail cars.
Adtranz, an European company belonging to DaimlerChrysler is the major player in Europe in propulsion systems and train controls.
In order to expand BT’s presence in the global rail equipment industry, especially on European continent, BT considers that merging with Adtranz could enlarge its key competencies and know-how and will allow BT to be more competitive on its market. But this operation presents four main issues to be solved:
The size of the acquisition, Adtranz was approximately twice the size of BT.
The ability of BT’s management to manage this acquisition, Lortie BT’s COO evaluated the capacity of its management to take care of the new acquisition, and strategic priorities;
The structures of both companies are quite different: BT is organized on geographic bases; Adtranz is organized by line of products. Those two organization structures need to be compatible in order to run properly.