Tuesday, Dec. 14, 2004 | 10:55 a.m.
As the Las Vegas Monorail prepares to begin the final battery of tests that will tell whether the $650 million system will re-open this year, the Canadian company that built and is now helping repair it is looking to a change in leadership to ease its own troubles.
Monorail officials have consistently distanced themselves from their builder's woes, saying that mounting problems from the multi-billion dollar Bombardier Inc. will not trickle down to the privately financed system.
Meanwhile Bombardier, the Montreal-based company that built and runs the beleaguered system, has been plagued by a litany of financial and personnel uncertainty since a fallen washer prompted the three-month closure of the monorail.
The list continued Monday, as company spokespersons announced the creation of a new Office of the President, effectively firing President and Chief Executive Paul Tellier, whose contract was slated to expire.
Helene Gagnon, a spokeswoman for the manufacturer, and monorail spokesman Todd Walker said Monday that the changes, like the problems before them, would not impact individual projects like the monorail.
"Our concern is for the completion and operation of the Las Vegas Monorail," Walker said. "We don't see them (the changes) impacting this project. We've actually had, since the closure of the system great energy and focus from Bombardier."
Work on the monorail continued this morning, as engineers prepare for the "recommissioning" of the system, which Ron Lynn, the Clark County Building Official, said could begin later this week. The process, which will entail between 1,000 and 2,000 individual 8-mile round trips on the 4-mile route, must continue trouble-free before the county approves the system to re-open.
Gagnon would not answer further questions about Tellier's departure, referring to a company statement released Monday morning.
"The announcement will not have any impact on the monorail," she said. "... For now, the only statement is that it doesn't have any impact."
In the company's written statement, Bombardier executives said incoming Chief Executive Laurent Beaudoin, previously the company's president and chief operating officer, will "focus on the development of the corporation's overall strategic direction ... "
Beaudoin represented Bombardier at the system's opening in July.
Tellier's departure caps a rocky period for the Canadian railroad and aerospace firm, which saw its bond rating fall to junk status after the high-profile bankruptcy of US Airways, a key client for the company's commercial airplane division.
The monorail company has also seen its own share of fiscal challenges. In that time, two Wall Street financial analysts have placed $451 million of the monorail's bonds on "Rating Watch Negative," meaning its bonds were also in danger of being downgraded to the higher risk "noninvestment" or "junk bond" categories.
The potential downgrade, which so far has not happened, would not affect the monorail's current operations but would hurt holders of its current debt, analysts have said.
Meanwhile lost ticket sales cost the company roughly $85,000 a day, meaning it has lost almost $8 million to date.
The closure also threw plans for a publicly financed extension to downtown Las Vegas into question. The $233 million contract awarded Bombardier in October 2003 expired in September, monorail executives said.
Unlike the current route, which was privately financed and backed by a private insurance company, the proposed expansion would include substantial government funding.
Since the most recent monorail closure -- the first having occurred when a 60-pound wheel assembly fell off a moving train less than a week before -- Bombardier has laid off more than 6,600 employees in seven European factories and has faced fines stemming from the late delivery of cars for the 8-mile Hiawatha light rail line in Minneapolis-St. Paul, Minn. That publicly financed system opened in June after conflicts between the company and the Minnesota Department of Transportation over the late delivery of the rail cars.
Monorail executives in September publicly blamed Bombardier operators for missing 149 warnings that the wheel assembly was unstable.
In that time the firm has stepped up its Las Vegas operations, bringing in engineers and technicians to study the problems in the monorail here, Gagnon said.
The company now employs roughly 75 people, who work at the monorail's control center behind the Sahara hotel as engineers, safety officers and supervisors.
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