Bombardier Slashing 7000 Jobs During the Next 24 Months

Bombardier announced Wednesday it will cut 7,000 people from its global workforce, including 2,830 in Canada.

The company announced more than a third of the layoffs will be in Canada and are the latest effort by the country’s largest aerospace company to turn itself around as it awaits word of federal aid.

Production rates have been modified based on the market, and Bombardier says it is adapting its workforce to meet the demand.

“Going forward, things look bright for Bombardier in Plattsburgh, given the approval in December by Congress of a long-awaited five-year federal transportation bill and the expected approval by the New York State Legislature this session of a five-year capital program for the MTA in New York City”.

Bombardier says about 2,000 of these layoffs will be contractors and none will be from the CSeries production team.

“Faced with the loss of 7,000 jobs, including 2,400 families losing their way of living, their means to live in Quebec, all that the prime minister has to offer is his condolences”, Mulcair said.

Bombardier already received order and commitment for a total of 678 C Series aircraft.

“We are engaged in a rigorous process that will increase our earnings power and cash flow generation over the next five years”, Alain Bellemare, the company’s chief executive and chairman, commented on the restructure. And this number won’t get much better; Bombardier expects to consume at least US$1 billion in 2016.

Bombardier said Wednesday that the job cuts and hirings will occur in 2016 and 2017.

At Bombardier’s rail unit, sites in Germany and Canada will be most affected by the staff reductions, the division’s President Laurent Troger said at its headquarters in Berlin.

A spokesman for Quebec Economic Development Minister Dominique Anglade said on Wednesday that the government had settled its case with Air Canada, in return for the airline agreeing to conduct maintenance on the CSeries jets in the province.

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.

For the fourth quarter of 2015, Bombardier reported a net loss $677 million, against $1.6 billion for the same period in 2014. Both numbers are down significantly year over year and were not even able to meet Bombardier’s reduced expectations.

Bombardier, Inc. (TSX:BBD.B) shares are on fire during early trading on Wednesday morning, soaring 20% as I write this.

Since receiving the cash injection from Quebec, Bombardier’s stock had fallen 40 percent to a record low of 72 Canadian cents (US$0.52) on Friday.

Last month, its stock fell below the $1 mark on the Toronto Stock Exchange for the first time in 25 years.