RIM Scrounges For Money, Sells Company Jet To Pay The Bills
Research In Motion (RIM), makers of the once popular Blackberry line of Smartphones has watched its market share fall by 95% since 2008 and now Bloomberg has discovered that the public firm is selling one of its two jets as part of a plan meant to save $1 billion in annual operating costs.
The plane in question is a nine-passenger Dassault Aviation SA (DSY) F50EX which could bring in $6 million to $7 million. The company in the meantime will hold onto a 14 passenger Dassault F900EX.
RIM watched sales in the U.S. fall by 47% in 2011 and the company has become more reliant than ever on overseas dealings, specifically in markets such as Indonesia and South Africa where cellular technology is still developing. RIM currently operates in 27 countries and 175 markets.
Chief Executive Officer Thorsten Heins recently announced plans to reduce operating expenses by $1 billion through “significant efficiencies and operating cost reductions.” Among the company’s plans is the firing of 5,000 workers and the closure of several manufacturing sites.
Removing the F50EX from operation will save the company approximately $2.1 million per year based on the jets hourly operating cost of $3,400. The company will still maintain $2.2 million annually in operating costs for its larger F900EX.
The jet for sale is an extravagant plane manufactured in 1999 and features “high gloss Swiss woodwork” and “gold-plated hardware.”
With the number of executives the company flies around the world the savings may not be realized when compared to commercial flights however the move is largely a symbolic gesture as the company moves to fire 5,000 employees.
In the meantime the Blackberry 10 OS has been delayed until at least early 2012 and RIM devices continue to falter. RIM is going to need to do a whole lot more than sell a jet and fly commercial if it plans to turn around its fortunes anytime in the near future.