Bombardier abolish 7000 jobs, including 2400 in Quebec

The pressure on the federal government to pull Bombardier Inc. out of its latest nosedive mounted Wednesday as the struggling Montreal aerospace giant slashed more than 10 per cent of its Canadian workforce.

At the same time, Bombardier will ramp up hiring to support production of the CSeries and its new Global 7000 business jets.

Bombardier also announced it has signed a $3.8 billion deal with Air Canada to buy 45 CS300 jets, with options to purchase another 30 planes.

He said he’s encouraged by the benefits that will result from this important transaction between these two iconic Canadian companies.

Nonetheless, the CSeries – behind schedule, about US$2 billion over budget and with fewer-than-expected buyers – is the primary reason for Bombardier’s request for financial aid from the federal government. The aerostructures and engineering services unit will eliminate 2,500 jobs, while the product development engineering, aerospace division will cut 800 positions. Almost half the cuts will be in Bombardier’s rail arm that has a large workforce in Europe. The first 25 aircraft will replace Air Canada’s existing Embraer E190 fleet, and the rest will expand the carrier’s network.

The reductions will begin in the coming weeks and will be implemented over a period of two years.

A spokesman for Bombardier said the company couldn’t give figures for individual sites as it was still “reviewing the overall picture in the UK”.

Transport Minister Marc Garneau says he has mixed feelings about the 7,000 layoffs Bombardier announced Wednesday because of a silver lining deal that was also announced.

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.

It will create a lot of value for Air Canada and its customers and it will become a catalyst future orders in North America and worldwide, “said Alain Bellemare, President and CEO of Bombardier”.

Any action the Government takes with respect to Bombardier, said Bains, will be first and foremost in the interest of Canadians. “We now have a clear plan in place and are applying disciplined execution to make Bombardier stronger”.

On a call with analysts, Bellemare said Air Canada’s order was a strong endorsement for the line of jets, which faces fierce competition from Boeing Co.’s 737 and Airbus Group’s A320 series.

Bombardier’s quarterly results missed analysts’ expectations, and it also forecast lower-than-expected revenue for 2016.

Revenue in the fourth quarter ended December 31 was $5 billion, down from just under $6 billion a year earlier.

The Toronto Stock Exchange’s benchmark Standard & Poor’s/TSX Composite Index rose 312.18 points, or 2.49 percent, to close at 12,867.16 points.