Bombardier cutting about 5,000 jobs as part of restructuring plan

Marco Green
November 9, 2018

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.

Bombardier also announced it will sell its business aircraft flight and technical training unit to CAE, and will also sell its Q Series turboprop aircraft program to Longview Aviation Capital, for anticipated total proceeds of US$900 million.

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.

Bombardier's widely traded Class B shares plunged 13 per cent to $2.76 at 11:12 a.m. after sinking as much as 27 per cent for the biggest intraday decline since January 2015. "Bombardier has had problems historically and the problem is often that their balance sheet gets into trouble because they chew up a lot of cash", he said. The company said it will "explore strategic options" for its CRJ regional-jet program. Bellemare cited capital needs at the company's rail business for spoiling the cash-flow goal, which includes leeway of plus or minus US$150 million.

He offered similar sentiments Thursday. It has also slashed costs, selling off non-core assets and streamlining processes.

The Canadian manufacturer is working off US$9.5 billion in adjusted debt, which was largely incurred as it poured money into two aircraft-development programs plagued with delays and cost overruns.

A spokesman said the firm does not yet have details on the remaining expected job losses.

Sales were down 5% to $3.6bn, but revenue is expected to jump 10% to at least $18bn next year.

The changes came as Bombardier reported a profit of $149 million (U.S.) or four cents per share in its latest quarter, compared with a loss of $100 million (U.S.) or four cents per share in the same quarter past year.

In the third quarter, adjusted earnings rose to 4 cents a share, topping the 2 cent average of analyst estimates compiled by Bloomberg. The deal gives CAE full flight simulators and training devices for all of Bombardier's business jet product lines, Learjet, Challenger and Global, including its newest Global 5500, 6500 and 7500 large-cabin jets.

"The Dash 8 turbo-prop is the ideal 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.

A Bombardier UK spokesperson said: "We will take the necessary time to evaluate what this means for our Aerostructures and Engineering Services business".

Other reports by Click Lancashire

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