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  1. JasW's Avatar
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    Default RIM Said to Sell Jet to Help Save $1 Billion

    This was in Bloomberg's tech news this morning:

    RIM Said to Sell Jet to Help Save $1 Billion

    By Hugo Miller - Jul 10, 2012

    Research In Motion Ltd. (RIMM), which has lost 95 percent of its market value since 2008, is selling one of its two business jets under a plan to save $1 billion in operating costs, two people with knowledge of the matter said.

    The maker of BlackBerry devices put its nine-passenger Dassault Aviation SA (DSY) F50EX up for sale, trying to fetch $6 million to $7 million, one of the people said. The person declined to be named because the sale hasn’t been completed. Selling the midrange jet would leave RIM with one Dassault F900EX, a longer-range aircraft that can fit 14 passengers, the person said.

    Chief Executive Officer Thorsten Heins, who will answer shareholders’ questions today at RIM’s annual shareholder meeting, is trying to rein in costs as the company’s smartphones fall out of favor and losses mount. A 47 percent plunge in U.S. sales last year has left RIM increasingly dependent on markets such as Indonesia and South Africa, forcing its top executives to roam further afield for sales growth. The company has offices in at least 27 countries and sells phones in more than 175 markets.

    “We’re looking at options with both our aircraft costs and finding ways to reduce our travel while still making sure we keep in close contact with our partners around the world,” Waterloo, Ontario-based RIM said in a statement in response to inquiries from Bloomberg. “It’s all part of the effort to find ways to reduce costs and drive efficiencies that Thorsten Heins has talked about.”

    ‘Significant Efficiencies’

    Heins has said he’s aiming to save $1 billion this fiscal year through “significant efficiencies and operating cost reductions.” That includes cutting 5,000 jobs, or about a third of RIM’s workforce, and a number of manufacturing sites.

    Vadim Feldzer, a spokesman for Paris-based Dassault’s Falcon business, didn’t return phone calls seeking comment.

    The F50EX typically costs about $2.1 million a year to run based on an hourly flying cost of $3,400, according to Bill de Decker, founder and president of Arlington, Texas-based business jet consulting firm Conklin & de Decker. The larger F900EX costs about $2.2 million in annual operating costs.

    The jet for sale was built in 1999, features beige leather interior, “high gloss Swiss woodwork” and “gold-plated hardware,” according to a sales brochure for the aircraft.

    While the yearly savings RIM can expect from paring its fleet is modest because it will now have to pay more for commercial jet travel, such moves assume much greater importance when the company is cutting jobs, de Decker said.

    “With corporate aviation, the symbolism far outweighs the dollars,” he said.

    BB10 Delay

    Shrinking sales, market share and profitability have shaken investor faith in RIM’s stock, which has lost almost three- quarters of its value in the past 12 months. The stock fell 2 percent to $7.52 at 10:16 a.m. in New York.

    The share performance has pushed Heins to intensify cost cutting, even as he pours more resources into finishing the new BlackBerry 10 operating system, RIM’s bet to compete with Apple Inc. (AAPL)’s iPhone and devices running Google Inc. (GOOG)’s Android software.

    Heins last month announced a delay of the first BB10 phone until the first quarter of next year. That means the introduction will be at least a year later than originally expected.

    Heins and key deputies such as Alec Saunders, head of BlackBerry developer relations, have been crisscrossing the globe to drum up support for the new BlackBerry platform and current smartphone models. For distant markets, RIM’s remaining Dassault F900 -- with a range of 4,500 miles (7,240 kilometers) -- is a useful aircraft, said de Decker.

    “They could say, ‘We believe our growth is in X, Y and Z, and we’re keeping a long-range aircraft,’” he said. “And at the same time, ‘We know we need to save money, so we’re going from two aircraft down to one.’”

    RIM Said to Sell Jet to Help Save $1 Billion - Bloomberg
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  2. Rickroller's Avatar
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    They're trying to batten down the hatches for the long haul..which is the right move if they want to survive. People here think that the world is waiting for BB10, and that as soon as it's released, RIM's market share is going to skyrocket upwards. Well it's not going to happen that way. Market adoption may see a slight upwards trend, but it's going to be a slow process.

    Nobody outside of Crackberry and tech blogs even know BB10 is coming, and most people think Blackberry is a dead brand. It will take at least 6-12 months AFTER BB10 is released for people to release that RIM has new products and might not be going bankrupt. This time period is what they need to survive through, and it will still remain to be seen whether the general consumers will even want to adopt a "new" platform.
    Last edited by Rickroller; 07-10-2012 at 11:37 AM.
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  3. ColdFistOfTruth's Avatar
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    , a bake sale right now would probably not be a bad idea.

    -CFOT

    P.S. Funny and ironic that BlueStar fractional jet service ads are running on CB right now.
  4. njblackberry's Avatar
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    It's the right thing to do when you are trying to cut back. Not much of a real cost savings, but it sends the right message to employees who are being told to work harder.
  5. #5  

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    Quote Originally Posted by JasW View Post
    This was in Bloomberg's tech news this morning:

    RIM Said to Sell Jet to Help Save $1 Billion

    By Hugo Miller - Jul 10, 2012

    Research In Motion Ltd. (RIMM), which has lost 95 percent of its market value since 2008, is selling one of its two business jets under a plan to save $1 billion in operating costs, two people with knowledge of the matter said.

    The maker of BlackBerry devices put its nine-passenger Dassault Aviation SA (DSY) F50EX up for sale, trying to fetch $6 million to $7 million, one of the people said. The person declined to be named because the sale hasn’t been completed. Selling the midrange jet would leave RIM with one Dassault F900EX, a longer-range aircraft that can fit 14 passengers, the person said.

    Chief Executive Officer Thorsten Heins, who will answer shareholders’ questions today at RIM’s annual shareholder meeting, is trying to rein in costs as the company’s smartphones fall out of favor and losses mount. A 47 percent plunge in U.S. sales last year has left RIM increasingly dependent on markets such as Indonesia and South Africa, forcing its top executives to roam further afield for sales growth. The company has offices in at least 27 countries and sells phones in more than 175 markets.

    “We’re looking at options with both our aircraft costs and finding ways to reduce our travel while still making sure we keep in close contact with our partners around the world,” Waterloo, Ontario-based RIM said in a statement in response to inquiries from Bloomberg. “It’s all part of the effort to find ways to reduce costs and drive efficiencies that Thorsten Heins has talked about.”

    ‘Significant Efficiencies’

    Heins has said he’s aiming to save $1 billion this fiscal year through “significant efficiencies and operating cost reductions.” That includes cutting 5,000 jobs, or about a third of RIM’s workforce, and a number of manufacturing sites.

    Vadim Feldzer, a spokesman for Paris-based Dassault’s Falcon business, didn’t return phone calls seeking comment.

    The F50EX typically costs about $2.1 million a year to run based on an hourly flying cost of $3,400, according to Bill de Decker, founder and president of Arlington, Texas-based business jet consulting firm Conklin & de Decker. The larger F900EX costs about $2.2 million in annual operating costs.

    The jet for sale was built in 1999, features beige leather interior, “high gloss Swiss woodwork” and “gold-plated hardware,” according to a sales brochure for the aircraft.

    While the yearly savings RIM can expect from paring its fleet is modest because it will now have to pay more for commercial jet travel, such moves assume much greater importance when the company is cutting jobs, de Decker said.

    “With corporate aviation, the symbolism far outweighs the dollars,” he said.

    BB10 Delay

    Shrinking sales, market share and profitability have shaken investor faith in RIM’s stock, which has lost almost three- quarters of its value in the past 12 months. The stock fell 2 percent to $7.52 at 10:16 a.m. in New York.

    The share performance has pushed Heins to intensify cost cutting, even as he pours more resources into finishing the new BlackBerry 10 operating system, RIM’s bet to compete with Apple Inc. (AAPL)’s iPhone and devices running Google Inc. (GOOG)’s Android software.

    Heins last month announced a delay of the first BB10 phone until the first quarter of next year. That means the introduction will be at least a year later than originally expected.

    Heins and key deputies such as Alec Saunders, head of BlackBerry developer relations, have been crisscrossing the globe to drum up support for the new BlackBerry platform and current smartphone models. For distant markets, RIM’s remaining Dassault F900 -- with a range of 4,500 miles (7,240 kilometers) -- is a useful aircraft, said de Decker.

    “They could say, ‘We believe our growth is in X, Y and Z, and we’re keeping a long-range aircraft,’” he said. “And at the same time, ‘We know we need to save money, so we’re going from two aircraft down to one.’”

    RIM Said to Sell Jet to Help Save $1 Billion - Bloomberg
    Maybe they can package the jet with all those Curves they're selling in India.

    'Buy 1 Million Curves and get the jet for free!"

    The fact that they're selling off a big ticket item that they possibly, or probably, took a some type of tax deduction on when they purchased it says "We're in trouble! Batten down the hatches and let's try to ride this one out!"
    Last edited by ADozenEggs@aol.com; 07-10-2012 at 12:52 PM.
  6. Thunderbuck's Avatar

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    Quote Originally Posted by Rickroller View Post
    They're trying to batten down the hatches for the long haul..which is the right move if they want to survive. People here think that the world is waiting for BB10, and that as soon as it's released, RIM's market share is going to skyrocket upwards. Well it's not going to happen that way. Market adoption may see a slight upwards trend, but it's going to be a slow process.

    Nobody outside of Crackberry and tech blogs even know BB10 is coming, and most people think Blackberry is a dead brand. It will take at least 6-12 months AFTER BB10 is released for people to release that RIM has new products and might not be going bankrupt. This time period is what they need to survive through, and it will still remain to be seen whether the general consumers will even want to adopt a "new" platform.
    Agreed, 100%. People forget that RIM makes money off subscribers in a way that no other handset maker does. If they can successfully cut expenses then they can continue for some time with their operating revenue.
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    Quote Originally Posted by njblackberry View Post
    It's the right thing to do when you are trying to cut back. Not much of a real cost savings, but it sends the right message to employees who are being told to work harder.
    Actually, the cost savings may be significant. Just KEEPING a jet costs millions a year. Selling it off is probably the equivalent of 15-20 staff cuts.
  8. njblackberry's Avatar
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    Add back in the costs of commercial flights for all the executives who had flown on the plane. I have no clue how expensive commerical service is to/from Waterloo (or even what airport is used). It's a nice, symbolic gesture.
  9. imcurved's Avatar
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    another step to the right direction. I like their focus and commitment. Next is to clear up the existing BBOS7 inventory by cutting the prices of these devices -- the sooner the better. If this happens, I'm going to pickup two more BlackBerry Bold 9900.
  10. ColdFistOfTruth's Avatar
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    Quote Originally Posted by Thunderbuck View Post
    If they can successfully cut expenses then they can continue for some time with their operating revenue.
    Assuming their revenues don't continue to drop at an accelerated pace...

    -CFOT
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    Average hourly cost per person for this jet is 377$ ish. You can get FAR cheaper tickets than that in business class, now not sure about First class (which is what most execs would take).
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    Quote Originally Posted by ColdFistOfTruth View Post
    Assuming their revenues don't continue to drop at an accelerated pace...

    -CFOT
    Their operating revenue (subscriptions) is stable, and the subscriber base actually continues to grow. Remember that even with the $500+ million loss they announced last quarter, they actually managed to ADD $100 million cash.

    Where they're seeing declines is in handset sales, and if they restructure properly they don't actually need to depend on those for continued survival.

    New product would also do wonders for those handset sales figures, and we know that's not coming for a little while yet.
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    I wonder if the have a list of the assets that they are willing to part with?

    And if so how far down that list are the patents?
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    It's great that they are doing everything to keep costs down, but if any other company was doing this, it wouldn't be a story.
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    Quote Originally Posted by scalemaster34 View Post
    I wonder if the have a list of the assets that they are willing to part with?

    And if so how far down that list are the patents?
    Probably right after they sell off the Executive Gym memberships.
    sinsin07 likes this.
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    nothing extraordinary. when you have to "resize" the firm, this extra bonuses advantage has to be withdrawn. better to sell a jet than having to fire 10 developers...

    Sent from my BlackBerry 9900 using Tapatalk
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    Expected the media to say other assets and such. A plane/jet isn't a bunch of assets or patents. Weeeeesh.
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  18. louzer's Avatar
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    Crackberry should buy it. If Kevin can't be CEO, then he could at least be a captain.
    Attached Thumbnails Attached Thumbnails RIM Said to Sell Jet to Help Save alt= Billion-cb_jet..jpg  
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    Most companies lease jets. They'll probability sell one and lease it back.

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