Bombardier has announced actions that will lead to 5,000 job losses in the next one and a half year. The…
Bombardier has announced actions that will lead to 5,000 job losses in the next one and a half year.
The Montreal-based company announced that it will sell its Q Series turboprop aircraft to Longview Aviation Capital for $ 300 million.
The carrier reached another agreement to sell his airplane flight and technical training unit, which expires from Montreal, Quebec City and Dallas, to another Montreal multinational CAE.
Bombardier said that the movements will result in $ 250 million in annual savings.
Bombardier also sells CAE training services for $ 645 million. The CAE Transactions will amount to $ 800 million in Bombardier revenue and are expected to be completed by mid 201
Bombardier said the agreements with Longview and CAE will amount to $ 900 million in net proceeds.
Company revenues from the third quarter amounted to 3.6 billion US dollars, a decrease of about five percent compared to the same period last year. The company generated a profit of $ 149 million for the quarter, better than the 100 million dollar loss it saw in the same period last year.
Bombardier CEO Alain Bellemare said the cuts and sales are necessary and the company would continue
Before the news about the sale of the turboprop department, analyst George Ferguson said with Bloomberg Intelligence that he believes the Q series “will generate little to no one profit “for the company this year, so it makes sense to sell it. While most of Bombardier’s attention centers on the company’s aircraft, some of them get a significant amount of money for the company.
It contrasts with the rail transport part of the business, which continues to generate money. “Transport will generate almost all cash flow as the aviation industry … will be flat at best in 2018,” said Ferguson.
John Di Bert, chief economist of Bombardier, said in a conference call with investors on Thursday morning that “action announced this morning demonstrates our focused efforts to increase profits and cash flows.”
“We continue to make concrete Bombardier spokesman Simon Letendre confirmed 500 jobs will be cut in Ontario, where the company employs 6.500 people. “
Bombardier spokesman Simon Letendre confirmed 500 jobs will be cut in Ontario, where the company employs 6.500 people. It will cut 2,500 jobs in Quebec. The company has 70,000 employees worldwide.
The rest of the approximately 2000 work demands come from not yet named activities outside of Canada.
David Chartrand, Quebec Coordinator of the International Association of Machinists and Aerospace Workers, said Thursday’s announcement was “unfortunate and disturbing,” speaks to Radio Canada’s radio show for morning show Alain Gravel on Thursday.
“The biggest frustration is that Bombardier once again announces major cuts just before the holiday,” said Chartrand.
He said he wants the company to provide more information about which employees will be affected. About 20,000 people work for Bombardier in Quebec, he says.
“There are 20,000 employees with question marks in their minds.”
Chartrand said that the pattern of offers Bombardier has done in recent years, including handing over its C Series Airline company to Airbus and selling the Q400 facilities, indicates that it can renounce its commercial aviation business to focus on its business fleet.
“This is definitely one of the questions we will ask the company.”
Chartrand said he hoped the union could reach an agreement with CAE that would resemble the Airbus agreement: for CAE to hire Bombardier employees and retain their employment.
Quebec economist Pierre Fitzgibbon said the government would look at ways to help workers affected by the cuts, as well as “if needed”, how it could support projects from other Quebec companies that could create jobs.
A year ago, Bombardier gave a controlling stake in its C Series business to Airbus and analyst Ferguson, Bloomberg, expects that if that deal pays Airbus will ultimately take over the whole case.
“It’s likely if the C Series is a success, Airbus will buy the remaining for the cost given their options,” he said on Thursday. “Bombardier seems ready to narrow down to a business and railway manufacturer.”
With files from Radio Canada