Bombardier cutting 7,000 jobs over two years

MONTREAL -- Bombardier announced Wednesday it will cut 7,000 positions over two years -- close to 10 per cent of its global workforce -- in the latest effort by Canada's largest aerospace company to turn itself around as it awaits word of federal aid.

See Full Article

The Montreal-based firm said the layoffs will include 2,000 contract jobs. Nearly half of all the cuts would be at Bombardier Transportation, its rail division, which will lose 3,200 jobs. The rest would come from aerostructures and engineering, aerospace product development and Bombardier's business aircraft division.

Most of the cuts will be in Canada and Europe, though they will be partly offset by hiring in certain areas, Bombardier said. Layoff notices are expected to be issued in the coming weeks and completed by next year.

No job losses are anticipated at the company's commercial aircraft business segment, which supplies airlines with passenger planes including the new CSeries jets, which Bombardier has had trouble selling.

But amid the bad news there was a sign that Bombardier could be reviving its fortunes: a letter of intent that could see Air Canada buy 45 CSeries 300 planes, with an option to buy up to 30 more.

"We are turning Bombardier around to make this great company stronger and more competitive," CEO Alain Bellemare said in a statement.

"And today, with the signing of Air Canada for the leading-edge CS300 aircraft, we add a major international airline customer based in North America to complement our orders in both Europe and Asia."

The CSeries is Bombardier's new generation of aircraft for commercial airlines, in development for more than a decade as an alternative to smaller models of passenger jets built by rivals Boeing and Airbus. The aircraft is about two years behind schedule and at least $2 billion over budget.

Late last year, Bombardier asked Ottawa for financial assistance as it tries to sell the CSeries. The federal government issued a statement Wednesday saying it was still reviewing that request.

"Any action the government takes with respect to Bombardier will be first and foremost in the interest of Canadians," federal Innovation Minister Navdeep Bains said. "We have been clear that such an important decision will only be made after due diligence, careful consideration and a strong business case."

Transport Minister Marc Garneau said he was encouraged to hear of the agreement between Bombardier and Air Canada but concerned about those losing their jobs.

The announcement of job cuts and the letter of intent with Air Canada came as Bombardier released its financial report for 2015 and an outlook for 2016.

The company, which reports in U.S. currency, had a net loss of US$5.34 billion for 2015, including a US$677 million loss in the fourth quarter.

Those losses include a number of special items and, without them, Bombardier says it would have had US$326 million of adjusted income for the full year and US$9 million of adjusted net income for the fourth quarter.

Among other things, Bombardier reported its revenue in the fourth quarter ended Dec. 31 was $5 billion, down from just under $6 billion a year earlier.

Its 2015 revenue was $18.2 billion, down from $20.1 billion in 2014. It's estimating 2016 revenue will fall further and be in a range of between $16.5 billion and $17.5 billion.

Bombardier is also planning to reduce the number of shares it has outstanding. The company plans a special shareholder meeting to get approval for a reverse stock split that will aim to exchange outstanding shares for a smaller number of consolidated shares, with a price in the range of C$10 to $20 each.

Bombardier's publicly traded B shares closed Wednesday at 90 cents on the Toronto Stock Exchange. Last month, its stock fell below the $1 mark on the Toronto Stock Exchange for the first time in 25 years.



Advertisements

Latest Economic News

  • Ex-J.C. Penney executive tapped for CFO gig at Hudson's Bay Company

    Economic CTV News
    TORONTO -- Hudson's Bay Company has tapped the former chief financial officer of another struggling retailer, J.C. Penney, to fill its vacancy. Edward Record will step into the executive role on Aug. 28, taking over the job from Paul Beesley, whose upcoming departure was announced in early July. Source
  • Apple CEO makes $2 million pledge to fight hate

    Economic CTV News
    SAN FRANCISCO -- Apple is donating $2 million to two human rights groups as part of CEO Tim Cook's pledge to help lead the fight against the hate that fueled the violence in Virginia during a white-nationalist rally last weekend. Source
  • Walmart took bigger bite out of Canadian grocery industry last quarter, earnings show

    Economic CBC News
    Walmart says its Canadian stores gained market share against rivals during its fiscal second quarter. "We further improved our price position against competitors, which contributed to market share gains in key traffic driving categories such as food and consumables," Walmart chief financial officer Brett Biggs said in remarks prepared for analysts during a conference call to discuss its most recent results Thursday. Source
  • Minnesota to review Enbridge Line 3 oil pipeline from Alberta

    Economic CTV News
    MINNEAPOLIS -- Minnesota regulators on Thursday released the final environmental review of Enbridge Energy's proposal to replace its aging Line 3 oil pipeline, which carries Canadian tar sands crude across northern Minnesota to Wisconsin. The state Commerce Department has updated and expanded the massive document since it released the draft for public comment in May. Source
  • Ontario court dismisses CUPE lawsuit over sale of Hydro One shares

    Economic CTV News
    TORONTO - An Ontario court has thrown out a lawsuit against the provincial government over the controversial partial sale of Hydro One. The lawsuit filed last December by the Canadian Union of Public Employees alleged the sale of shares in the utility was "motivated by improper and ulterior purposes," namely to reward benefactors of the Ontario Liberal Party. Source
  • L.L. Bean boosts production of iconic boot

    Economic CTV News
    LEWISTON, Maine -- L.L. Bean hopes to give the boot to backlogs of its most iconic product. The Maine-based retailer is expanding production to keep up with demand for its leather-and-rubber "duck boot" with a new manufacturing centre with another machine used to make the rubber soles. Source
  • Canadian manufacturing sales fall 1.8 per cent in June, breaking winning streak

    Economic CTV News
    OTTAWA -- Canadian manufacturing sales fell in June following three consecutive months of gains, with declines led by the petroleum and coal industry. Manufacturing sales slipped 1.8 per cent overall to $53.9 billion in June, Statistics Canada said Thursday in a monthly report. Source
  • EpiPen settlement reached in U.S. for $465M

    Economic CBC News
    Mylan NV has finalized a $465 million US settlement with the U.S. Justice Department, resolving claims it overcharged the government for its EpiPen emergency allergy treatment, which became the centre of a firestorm over price increases. Source
  • Canadian U Box It wins u-u-uge trademark battle over American U-Haul

    Economic CTV News
    OTTAWA -- A family-owned Canadian garbage business is claiming victory over huge American moving company U-Haul International in a David-versus-Goliath battle involving whose U-themed brands deserve trademark protection in Canada. The Federal Court of Appeal has upheld a lower court ruling denying U-Haul two trademarks because they too closely resemble the brand of U Box It, a small waste management services company in the Greater Toronto Area. Source
  • Canadian subsidiary of French defence giant gets $5.2 billion contract

    Economic CTV News
    OTTAWA -- The Canadian subsidiary of French defence giant Thales has been awarded a multibillion-dollar contract to service Canada's new fleet of Arctic offshore patrol ships and joint support vessels. The federal government says Thales Canada, in a joint venture with the company's Australian arm, will provide in-service support for the vessels under a contract that could total $5.2 billion over 35 years. Source