MONTREAL — Bombardier Inc.’s regional jet assembly lines will restart Monday after machinists voted heavily in favour of accepting the company’s revised offer of a 16% pay boost over four years, according to the National Post.
The settlement comes on the same day the company announced major orders for rail cars.
The vote by 7,500 members of the International Association of Machinists and Aerospace Workers, Local 712, ends a 19-day-old strike.
The new contract includes a $1,000 signing bonus, a two-year reduction in the retirement age and other benefits, said John Paul Macdonald, vice-president, communications, Bombardier Aerospace.
The union said it won concessions worth $15-million in the conciliation process, bringing the total value of the deal to $213-million.
Bombardier would not comment on those figures or discuss the impact of the strike on deliveries and on its bottom line.
“The strike has had an impact on our regional jet operations and on the employees,” he said, “but over the next few weeks and months, we’ll make up for it and deliver aircraft according to our clients’ expectations.”
He would not detail any financial fall-out for the company.
One analyst temporarily reduced his estimate of Bombardier’s overall earnings for the first quarter earlier this week and fiscal 2003 on the assumption the strike might be extended.
Others, however, minimized the impact, saying Bombardier could easily catch up on its orders.
“I don’t think they lost too much ground,” Elvis Picardo, an analyst with Global Securities Corp. in Vancouver, said yesterday.
“They should be able to make up whatever ground they lost on the deliveries front.”
Bombardier stock rose 35¢ to $14.25 on volume of 5.2-million shares late yesterday.
Bombardier Aerospace expects to deliver 190 of its 50-passenger and 70-passenger regional jets this fiscal year. The strike also halted output of Challenger business jets.
Meantime, the company announced yesterday $1.3-billion of rail equipment orders in the United States and Europe, bringing the transportation unit’s order backlog to about $23-billion, up from $20.4-billion at the end of fiscal 2002, which ended Jan. 31.
It will supply 352 stainless steel commuter cars to Long Island Rail Road, the fourth such contract since 1999 and worth $941-million. Cars under the first LIRR contract are now going into service. The cars are built in Quebec and at Plattsburgh, N.Y.
Bombardier will also make 42 electric locomotives worth $188-million for the Italian State Railways in a contract that came with last year’s $1.1-billion takeover of DaimlerChrysler AG’s Adtranz rail equipment unit. Bombardier acquired electric traction technology, as well as manufacturing plants in several European countries.
The Italian locomotives, which are to be used to pull both freight and passenger cars, will be designed and produced in Italy, Poland and Germany.
These orders bring the transportation unit’s total since Jan. 31 to $3.4-billion, excluding first-quarter deliveries. The earlier orders were for passenger cars for a British leasing company and for network operator Go-Ahead Group Plc.
Bombardier will deliver the last Acela high-speed train to Amtrak for the Washington-New York-Boston corridor in July. The trains were built under a US$700-million contract signed in 1996 and expanded in 1998.