Bombardier to slash more jobs
MORE THAN 10PC: Company expects programme to yield savings of about US$300 million a year by the end of 2018
BOMBARDIER Inc will cut an additional 7,500 jobs — more than 10 per cent of its workforce — as the maker of trains and airplanes accelerates a restructuring plan after taking on billions of dollars of debt developing its marquee jetliner.
Restructuring charges of US$225 million (RM940.96 million) to US$275 million will be reported as special items starting in the fourth quarter and continuing through next year, Bombardier said in a statement yesterday.
The company expects the programme to yield savings of about US$300 million a year by the end of 2018, saying it would ensure competitiveness and lift profit margins.
The plan marks the second major employment cut in eight months by chief executive Alain Bellemare, who was hired in February last year with a mandate to restore profitability.
He’s working to overcome cost overruns and a delay of about twoand-a-half years on the US$6 billion C Series aircraft programme, which was developed to rival products made by Boeing Co and Airbus Group SE.
“When we launched our turnaround plan last year we committed to transforming our company,” said Bellemare in the statement. “And that is exactly what we are doing.”
He also reaffirmed his confidence in Bombardier’s strategy and its ability to achieve short-term goals as well as the objectives of a 2020 turnaround plan.
The job cuts will take place over the next two years, and Montrealbased Bombardier didn’t immediately provide details on where they would occur or which programmes would be hurt most severely.
The company will “streamline” administrative and non-production functions and create centres for design, engineering and manufacturing in both its aerospace and rail businesses.
After cancelling the Lear 85 business jet, Bombardier raised US$2.5 billion this year by selling stakes in the C Series and the company’s train unit to the Quebec government and the province’s largest pension fund manager.
Bombardier had US$8.96 billion of long-term debt at the end of June and US$4.4 billion of accessible liquidity. Bloomberg