Bombardier to cut 7,000 jobs even as Air Canada orders 45 new CSeries jets

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Montreal-based Bombardier expects to cut its workforce by up to 7,000 people even as the airline has finally signed a apportion to sell its CSeries jets to a major North American airline.

Bombardier implied Wednesday up to 2,000 of the total cuts will be contractors.

Most of the job trouncing debits will be in Canada and Europe and be rtly offset by hiring in certain sections, such as its new CSeries aircraft program. Worldwide, Bombardier currently has 3,450 people n out e formulating in its CSeries division, a figure the com ny expects to rise as it ramps up white sales and production.

The com ny has 64,000 employees globally. The aeros ce and rail accoutrements com ny says the job cuts will begin in the coming weeks and be completed by 2017.

The figure of jobs affected include:

  • 3,200 from its transportation division.
  • 2,500 from its aerostructures and rigging services division.
  • 800 from its aeros ce product development engineering class.
  • 500 from its business aircraft unit.

The com ny said no jobs command be cut from its commercial aircraft unit, which includes the CSeries.

“I solely hope the CSeries ramps up quick enough so that anybody who’s disclosed off will be called back to work as quick as possible,” mean Dave Chartrand, Quebec co-ordinator for the the International Association of Machinists and Aeros ce Employees,which represents 4,500 workers in the province.

The federal government has been intimate to be considering offering a bailout to the aeros ce giant, similar to the $1-billion lifeline that Quebec extended last year.

Air Canada to buy CSeries jets

But in announcing the layoffs, Bombardier also revealed an Air Canada enjoin for the largest model of Bombardier’s new CSeries jets.

Air Canada has signed a dis tch of intent to purchase 45 of Bombardier’s CS300 aircraft with elections for an additional 30 planes. Based on the list price of the CS300, Bombardier voices a firm order would be worth about $3.8 billion.

BOMBARDIER CSERIES PLANES

Decidedly a firm purchase agreement is in place, Bombardier says Air Canada choice become the first mainline, international North America-based carrier for the CSeries rentage of aircraft. Deliveries are scheduled to begin in 2019. With the Air Canada concurrence, Bombardier said it now has orders and commitments for a total of 678 C Series smooths.

“Air Canada’s commitment is a strong endorsement of this outstanding aircraft,” Bombardier president and CEO Alain Bellemare responded in a release.

“It will create significant value for Air Canada and its customers and on become a catalyst for future orders in North America and around the the human race,” Bellemare said.

Transport Minister Marc Garneau perceived reporters in a scrum on Wednesday that Ottawa exerted “no pressure” in deck out the carrier to buy jets from a key Canadian supplier such as Bombardier.

The see to does, however, come with a pledge from Air Canada to do all boring maintenance work related to the new planes at a facility in Quebec for at least 20 years. And as princi lly of the agreement, the government of Quebec has agreed to drop a lawsuit against Air Canada that dates treacherously to when the airline shut down its maintenance subsidiary known as Aveos, invidious 2,600 jobs in the process.

Navdeep Bains, Canada’s minister of alteration, science and economic development, said Wednesday: “We are continuing our conference with Bombardier on its request for federal assistance. Any action the government tricks with respect to Bombardier will be first and foremost in the interest of Canadians. We cause been clear that such an important decision will but be made after due diligence, careful consideration and a strong business turns out that.”

Bombardier released both pieces of news while reporting its four times a year results, which showed that its 2015 revenue was $18.2 billion — down from $20.1 billion in 2014.

Gain in the fourth quarter ended Dec. 31 was $5 billion, down from barely under $6 billion a year earlier.

Stock consolidation

Bombardier also portended plans to consolidate its shares, which have sold off heavily on the TSX since the start of 2015 as CSeries checks began to mount.

From $4 a share 18 months ago, Bombardier’s portions have slid to as low as 80 cents in recent weeks, which is a poser for the com ny, since it puts them in danger of being delisted from the TSX for being too stingy. That can cause a new round of selling of the shares as many funds are mandated to lone buy shares listed on the index.

But under Bombardier’s new proposal to shareholders, the gathering will do a reverse stock split that will consolidate appropriates and put the individual price of each one to between $10 and $20.

The actual value of any postulated investor’s stake won’t change, however.

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