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Bombardier Inc. (BBDB.TO) has two main operating groups. Aerospace provides civil aircraft, while Transportation produces rail cars and related products and systems. Three percent of revenues are generated in Canada, 47% in the United States of America, 26% in Europe, and 24% of revenues are from other geographic regions.

Facilitated by one family, and founded in Quebec in 1942, Bombardier has since expanded into an international Fortune 500 transportation empire. Today, it has billions of dollars in market capitalization, an impressive portfolio of international holdings, and is still run by the same family.

The story of the Bombardier family business starts with Joseph-Armand Bombardier, a precocious mechanic who wanted to simplify movement in snowy rural Quebec. He ended up expanding his snowmobile company L'Auto-Neige Bombardier Limitée adroitly and leaving it for the next generation to manage. In 1969, it went public as Bombardier Limited on the Montreal and Toronto Stock Exchanges. Ten years later, his son-in-law Laurent Beaudoin took over and oversaw much of Bombardier’s transition into the world’s largest rail-equipment company and third largest civil airplane producer. Today, the family stills own 79% of the company’s shares, without disproportionate representation on the board of directors. (Bombardier also has a fully independent audit committee in line with prevailing corporate governance standards.) The son of Laurent, and grandson of the founder, CEO Pierre Beaudoin, currently oversees the empire that his predecessors built.

As it has grown, Bombardier has benefitted from a close relationship with the Canadian government. Besides enjoying Canada’s low corporate tax rate, it has also received low-interest loans that some have called subsidies. For example, in 1988, Embraer, which itself had been pushed along by the Brazilian government, accused Bombardier of receiving unfair government help to the World Trade Organization. Such ties with government bodies, however, are not all that uncommon in the aerospace industry.

Several key acquisitions expanded Bombardier’s product base to the diverse transportation solutions it offers today. For example, the snowmobile maker first got into rail by acquiring Lohner-Rotax of Vienna in 1970. Later, Bombardier bought a faltering Canadair, which proved to be the core of Bombardier’s Aerospace segment, from the Canadian government in 1986. Revenues are now split roughly in half among the Transportation and Aerospace segments, and this split provides Bombardier with some diversification compared to other Aerospace companies.
Bombardier Aerospace is currently having some difficulty with expansion. As a distant third player behind Boeing (BA – Free Boeing Stock Report) and Airbus, this segment faces fundamental difficulty in breaking into the fleets of major carriers due its lack of market share. In response, it has positioned itself with smaller planes that offer distinct competitive advantages. All eyes remain on the company’s fuel-efficient CSeries model, and it appears that Bombardier is gaining some traction with new orders. Sales of perhaps its most famous model, the Learjet, have suffered along with the overall economy. Business flyers, still averse to flying with the masses and to being scrutinized in high security environments have, instead, looked to save expenses through jet-sharing programs, such as Bombardier’s FlexJet.

Bombardier Transportation, on the other hand, has been outperforming Aerospace recently. Its biggest market is in Europe, but the company is looking to developing economies for growth. It is active in China, which has been investing heavily in its rail network, and seems to have a good relationship with the Chinese Ministry of Rail, signing a strategic cooperation agreement in 2010. Unfortunately, a fatal crash in June involving a bullet train built by a Bombardier joint venture, served as a bump in Bombardier’s road to expansion in China. Overall, though, the long-term outlook remains good.

At the time of this article’s writing, the author did not have positions in any of the companies mentioned.