Bom­bardier is cut­ting 5,000 jobs

Mostly in Canada, some over­seas

The Hamilton Spectator - - Business - CHRISTO­PHER REYNOLDS

MON­TREAL — Bom­bardier Inc. an­nounced Thurs­day it will shed 5,000 jobs com­pa­ny­wide 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 spokesper­son, 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 US$300 mil­lion. The Mon­tre­al­based com­pany also an­nounced

the sale of its flight train­ing busi­ness to CAE Inc. for about US$645 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, said an­a­lyst Benoit Poirier.

AARON VIN­CENT ELKAIM THE CANA­DIAN PRESS

The com­pany said it will sell its Q400 tur­bo­prop air­craft pro­gram to a sub­sidiary of Longview Avi­a­tion Cap­i­tal Corp.

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