Tuesday, July 10, 2012

In cost-cutting move, RIM puts corporate jet up for sale

Indeed, things have become this desperate: Research in Motion (RIM) is selling one of its two business jets as part of an effort to save $1 billion in operating costs, two people with knowledge of the matter told Bloomberg.

The company's nine-passenger Dassault Falcon F50EX has been put up for sale, with RIM trying to get between $6 million to $7 million for the mid-range jet (pictured). Shareholders needn't be concerned that the company's executives will be forced to fly in coach, as a sale would still leave RIM with a Dassault F900EX, which is a longer-range jet that can carry 14 passengers. The source asked for anonymity as the sale has not yet been completed.

RIM issued the following response to inquiries:

“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. It’s all part of the effort to find ways to reduce costs and drive efficiencies that Thorsten Heins has talked about."

RIM has seen its stock price - and thus its market capitalization - crash about 95 percent since its high-water mark in 2008. In June, RIM reported a fiscal Q1 2013 loss of $518 million, and announced that its long-awaited BlackBerry 10 operating system would be delayed until early 2013.

Speaking of shareholders, RIM is scheduled to meet with shareholders, as the company's annual shareholders' meeting takes place in Waterloo, Ont., Canada today. It is bound to be a vocal and contentious meeting.

Jaguar Financial Corp. CEO Vic Alboini, who is one of RIM's most outspoken shareholders, said, "There's a very substantial loss of credibility with the management team, both prior and current." He said he is pushing for CEO Thorsten Heins to be ousted, and has recently contacted RIM's management team with recommendations for three new board members, including the former CEO of Visto (currently DBA Good Technology), Brian Bogosian.

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Earlier, it was rumored that RIM might split its hardware and network management businesses, and then maybe even license its BBM, BIS, and BES technology, something that could be very lucrative for RIM.

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