Bombardier to cut 5000 jobs as part of new restructuring plan

Bombardier Inc's CRJ900 regional jet

Bombardier Inc's CRJ900 regional jet. Courtesy of Bombardier

It hasn't specified where the job cuts will be made, but isn't ruling out cuts in the UK.

About 2,500 Bombardier workers will be laid off in Quebec and 600 in Ontario, with the 2,000 other cuts occurring overseas, according to a spokesman, who did not specify the units. Bombardier has had to slash more than 15,000 jobs in its aerospace and rail divisions around the world since 2015.

Bombardier will sell its Q Series turboprop program and de Havilland trademark to a subsidiary of Canada's Longview Aviation Capital Corp., the parent company of Viking Air Ltd., which makes the Twin Otter propeller plane.

The Montreal-based company also announced the sale of what it called "a number of non-core assets".

Montreal-based Bombardier made the restructuring announcement Thursday morning as part of its earnings for the quarter ended September 30, which showed a 5 percent drop in revenue but a profit of $149 million compared with a loss in the year-ago quarter.

"With the measures announced, we are confident that we will be able to reach our goals in 2020", chief executive Alain Bellemare's said of his plan to reduce debt.

"We're continuing to improve our processes", he said.

The GMB union, which represents Bombardier workers, said it was demanding answers from the company on behalf of its members.

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. 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.

In the third quarter, adjusted earnings rose to 4 cents a share, topping the 2 cent average of analyst estimates compiled by Bloomberg. Analysts, on average, expected US$3.87 billion in revenue and a profit of two cents per share. The overall restructuring is expected to take place over the next year and a half and will save the company US$250 million per year. The transaction was completed in July.

Mr Bellemare was brought in three years ago to shore up Bombardier, which was facing serious financial trouble with the C Series programme and had to be rescued by the Quebec government with a $1bn bailout. The Canadian government provided Bombardier with $372.5 million in reimbursable funding for the CSeries and Global 7500 programs previous year, stopping short of directly investing in the company.

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