(The Canadian Press circulated the following article on December 1.)
MONTREAL — Bombardier Inc. is cutting 2,200 more jobs in its rail transportation division, bringing the total reductions to 7,600 by April 2006 – or 21 per cent of the division’s workforce.
The new cuts are spread across 14 countries and 27 locations, but affect mainly Germany, Britain and Canada, the Montreal-based company (TSX:BBD.B) said Wednesday.
The job losses were announced as Bombardier reported a third-quarter profit of $10 million US, compared with earnings of $133 million US a year earlier.
In the first three quarters, ended Oct. 31, the firm has lost $141 million US, versus a profit of $255 million US a year ago.
“No one around here is underestimating the challenges that stand between us and our potential, but the view forward gives cause for encouragement,” CEO Paul Tellier said in a release.
“We feel our plan is the right one and our job is to make yards the hard way – through faultless execution one play at a time.”
The restructuring was made necessary by lowered growth projections in the core European market.
In the aerospace division, “the resurgence of the business aircraft market shows the benefit of diversification in our aircraft business,” Tellier said.
“We are making progress with our recovery plan despite the serious challenges our customers are facing – particularly the North American airlines.”
Total aircraft deliveries for the year to date, at 221, are slightly ahead of fiscal 2004 with 217. New orders for the first nine months are also up, reaching 217 compared to 145, driven by a continued strengthening of the business aircraft market.
A net total of 100 new business aircraft orders was recorded during that period, compared with 43 the previous year. Shortly after the end of the quarter, new orders were confirmed for 11 additional Canadair Regional Jet aircraft.
The adjustment in the production rate will bring the total CRJ200 aircraft deliveries to 54 in the next fiscal year.
“No additional workforce reductions will be required as the impact will be mitigated by the uptick in the business aircraft market,” the company said.
Earlier in the quarter, Bombardier adjusted the CRJ production rate with a scheduled reduction of the aerospace workforce of 2,000 over a nine-month period.
Quarterly revenue rose to $3.6 billion US, up from $3.5 billion a year earlier.
The rail transportation division accounted for $1.9 billion US, down from $1.7 billion.