Bom­bardier cut­ting 5,000 jobs — mostly in Canada

North Bay Nugget - - NATIONAL NEWS - Christo­pher reynolds

mon­treal — bom­bardier inc. an­nounced thurs­day it will shed 5,000 jobs com­pany-wide and sell off two units as part of chief ex­ec­u­tive alain belle­mare’s five-year plan to rein in costs, fo­cus on rail and busi­ness jets and re­duce the net long-term debt of $9 bil­lion.

about 2,500 bom­bardier work­ers will be laid off in Que­bec and 600 in on­tario, with the 2,000 other cuts oc­cur­ring over­seas, ac­cord­ing to a spokesman, who did not spec­ify the units.

the com­pany said it will sell its Q400 tur­bo­prop air­craft pro­gram to a sub­sidiary of Longview avi­a­tion Cap­i­tal Corp. for about $395 mil­lion. the mon­treal-based com­pany also an­nounced the sale of its flight train­ing busi­ness to Cae inc. for about $850 mil­lion.

the re­struc­tur­ing, an­nounced along­side bom­bardier’s thirdquar­ter earn­ings, is slated for com­ple­tion within 18 months and for sav­ings of $250 mil­lion an­nu­ally.

the an­nounce­ment comes af­ter mass lay­offs over the past three years, with about 14,500 po­si­tions cut around the world in the aero­space and rail­way di­vi­sions.

drop­ping the Q400 will al­low bom­bardier to zero in on pro­duc­ing its global se­ries of long-range busi­ness jets, in­clud­ing the global 7500, whose first air­craft is slated for de­liv­ery next month.

“With the mea­sures an­nounced, we are con­fi­dent that we will be able to reach our goals in 2020,” belle­mare said dur­ing a con­fer­ence call.

bom­bardier shares tum­bled by more than 20 per cent to $2.53 in mid-af­ter­noon trad­ing on the toronto Stock ex­change due to con­cerns over cash flow.

bom­bardier fore­cast 2019 rev­enue to in­crease by 10 per cent to at least $18 bil­lion, pow­ered by more de­liv­er­ies of its global 7500s.

Free cash flow came in “well be­low” ex­pec­ta­tions that bom­bardier could break even on cash with­out fall­ing back on its $635 mil­lion in pro­ceeds from the sale of a toronto plant ear­lier this year, said an­a­lyst benoit Poirier of des­jardins Cap­i­tal mar­kets.

“the new fa­cil­ity at Pear­son (air­port) will prob­a­bly be pro­duc­ing only the global busi­ness jet, and hav­ing a ded­i­cated fa­cil­ity for one line gives them a chance to op­ti­mize the per­for­mance,” said ernie ar­vai, a part­ner at com­mer­cial avi­a­tion con­sul­tancy airin­sight.

“the next ques­tion for bom­bardier is what hap­pens with the CRJ line and what hap­pens with the rest of the com­mer­cial busi­ness.”

the fate of the ag­ing CRJ re­gional jets has been un­clear since the com­pany an­nounced in oc­to­ber 2017 that air­bus Se would ac­quire a ma­jor­ity 50.01 per cent stake in the C Se­ries, ef­fec­tive July 1 of this year.

belle­mare said at the time the com­pany was com­mit­ted to the Q400 and CRJ. “We like these prod­ucts, they give us crit­i­cal mass.”

he of­fered sim­i­lar sen­ti­ments thurs­day. “on the CRJ, the fo­cus is still on re­duc­ing cost and sell­ing air­craft to­day. We are los­ing money on the CRJ.”

Karl moore, an avi­a­tion ex­pert at mcgill univer­sity’s de­sau­tels Fac­ulty of man­age­ment, said the lay­offs and sell­offs will al­low bom­bardier to shift away from re­gional jets and shrink its debt.

“the trans­porta­tion side and busi­ness jets are clearly the cen­tral fo­cus of bom­bardier go­ing for­ward,” moore said.

Que­bec Pre­mier Fran­cois Le­gault weighed in af­ter speak­ing with com­pany and union lead­ers.

“my govern­ment will make ev­ery ef­fort to min­i­mize the num­ber of job losses and to help af­fected em­ploy­ees find a new job,” he said on twit­ter in French.

Longview avi­a­tion, the par­ent com­pany to vik­ing air Ltd., said once it com­pletes its deal with bom­bardier it will be­come North amer­ica’s largest com­mer­cial tur­bo­prop air­craft man­u­fac­turer.

the agree­ment en­com­passes the en­tire dash 8 pro­gram, in­clud­ing the 100, 200 and 300 se­ries and the in-pro­duc­tion Q400 pro­gram.

“the dash 8 turbo-prop is the per­fect com­ple­ment to our ex­ist­ing port­fo­lio of spe­cial­ized air­craft in­clud­ing the twin ot­ter and the Canadair CL 215 and 415 se­ries of wa­ter bombers,” Longview avi­a­tion chief ex­ec­u­tive david Cur­tis said in a state­ment.

Cae pres­i­dent marc Par­ent said in a state­ment its pur­chase of bom­bardier’s flight train­ing wing “rep­re­sents a win-win for both com­pa­nies, re­sult­ing in en­hanced core fo­cus.”

Ryan remiorz/the CANA­DIAN PRESS

Flags fly out­side a Bom­bardier plant in Mon­treal, Thurs­day. Bom­bardier Inc. says it’s cut­ting about 5,000 jobs across the or­ga­ni­za­tion over the next 12 to 18 months as part of a new re­struc­tur­ing plan.

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