(The Associated Press circulated the following story on March 16.)
TORONTO — Bombardier Inc. said Wednesday it was cutting 6,600 jobs and closing seven plants in a massive restructuring of its troubled rail division in Europe.
The Montreal-based company said it will cut 18.5 per cent of the work force at its Bombardier Transportation unit and close seven plants in five European countries over the next two years. The moves, which will cost an estimated $777 million, are aimed at improving disappointing financial results at the division
“This restructuring initiative is part of a three-year strategy to bring back improved margins and profitability to this company,” chief executive Paul Tellier said.
Bombardier rail division’s 35 plants in 16 European countries have been under pressure to improve efficiency and bottom-line results. The train unit accounts for about half of Bombardier’s sales. The other half comes from the aerospace division’s regional airliners and business aircraft.
The rail division is the world’s biggest maker of train equipment, with about 36,000 employees.
Last month, Bombadier hired Andre Navarri, a former executive at French train-making rival Alstom, to run the rail unit.
“The urgency to move now at Bombardier Transportation has been underscored by disappointing financial results in this division in the last two quarters of fiscal year 2004,” Tellier said Wednesday.
Bombardier said the plants slated to close this year are in Amadora, Portugal; Doncaster and Derby Pride Park in Britain. The company will close plants in Pratteln, Switzerland; Ammendorf, Germany; Kalmar, Sweden; and Wakefield, Britain next year.
In another development, Bombardier and Alstom also announced they had settled a legal dispute with U.S. passenger train operator Amtrak over a $1.2-billion-high-speed rail program in the United States.
Under terms of the agreement, the parties will drop all claims against each other related to the delivery, performance and maintenance of 20 high-speed Acela Express trains over a 10-year period
For the year , Bombardier lost $195 million, compared with a loss of $709 million the previous year.
Quarterly revenues rose to $6.4 billion from $5.9 billion, while annual revenue rose marginally to $21.3 billion from $21.2 billion.