Published: Sun, November 11, 2018
Money | By Ralph Mccoy

Bombardier to cut 5000 jobs

Bombardier to cut 5000 jobs

Bombardier has said this includes the reduction of "approximately 5,000" positions across the organisation over the next 12 to 18 months, which it expects will result in annual savings of $250 million (£191m) by 2021. "Cuts in jobs would be extremely short-sighted".

The Montreal-based company said will sell its Q400 turboprop aircraft program to a subsidiary of Longview Aviation Capital Corp. for about US$300 million ($444.3m).

It also announced the sale of its aircraft's flight and technical training business to CAE, and the monetization of royalties for about US$800 million.

Bombardier has been in a multi-year overhaul under the stewardship of CEO Alain Bellemare, with multiple rounds of job cuts and waves of asset sales in recent years.

Bombardier shares closed down 24.45 percent at C$2.41 on Thursday, after hitting an intraday low of C$2.34.

Bombardier manufactures about 28 to 30 Q400 aircraft annually at its Downsview property in Toronto, that the company sold earlier this year to the Public Sector Pension Investment Board.

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The decision to sell the Q Series line, Bellemare said, was made 'because we believe there is a better owner than us to keep this program going'. The Company also announced a number of strategic actions, including the launch of an enterprise-wide productivity programme.

On the back of the restructuring announcements, Bombardier also unveiled financial forecasts for 2019, with the company saying it's aiming for at least US$18 billion in revenue and adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) reaching as high as US$1.8 billion. "What's the future? This aircraft isn't selling".

Karl Moore, an aviation expert at McGill University's Desautels Faculty of Management, said the layoffs and selloffs will allow Bombardier to shift away from regional jets and shrink its debt. "We understand that", he added, pledging continued support for the aerospace sector.

The company's third-quarter revenues reached $3.6 billion United States, a 48 per cent increase compared to its earnings for the same period a year ago.

Following the announcement, a Bombardier UK spokesperson said: "We will take the necessary time to evaluate what this means for our Aerostructures and Engineering Services business". According to Bombardier, the sale of these two assets will net the company $900 million.

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