Canadian plane and train maker Bombardier has announced significant job cuts for the second time this year, cutting another 7,500 posts around the world through the end of 2018.
About 2,000 positions will be cut across Canada, including 1,500 in Quebec. Two-thirds of the global positions will be in the rail division, Bombardier Transportation, and nearly 2,500 in the aerospace division.
The move will prompt a restructuring charge of $225-$275m in the fourth quarter and through 2017.
“The actions announced today will ensure we have the right cost structure, workforce and organization to compete and win in the future,” Bombardier president and CEO Alain Bellemare said in a statement. “We are confident in our strategy, our leadership team and our ability to achieve both our 2016 goals and our 2020 turn-around plan objectives.”
‘A very competitive industry’
In February, Bombardier said it was cutting 7,000 jobs. Nearly half of these cuts are being made in its rail division, which has a large workforce in Europe.
The Montreal-based company said it would streamline its administrative and non-production operations and reorganise its design, engineering and manufacturing activities by creating new “centres of excellence”.
The job losses will be partially offset by more than 3,700 strategic hirings as Bombardier ramps up production of its CSeries commercial jetliner and new Global 7000 business aircraft, along with delivering rail contracts.
Bellemare said the new jobs will be added in low-cost countries and more established higher cost operations.
“It’s the only way that we can protect the thousands of jobs in the industry and at Bombardier. It’s a very competitive industry and it’s important to take the necessary steps to remain competitive in this context.”
Financial burden
The manufacturer has been struggling because of heavy spending on the development of its CSeries jetliner, which was 2.5 years behind schedule and $2 billion over budget.
The company is also dealing with a slowdown in business jet demand and production challenges for its railway products. It also faces large pension obligations.
Bombardier has received a $1-billion US investment in the CSeries from the Quebec government, sold a 30 per cent stake in Bombardier Transportation to Quebec’s pension fund manager, the Caisse de depot, and has requested a $1-billion US infusion from the federal government.
Federal Innovation Minister Navdeep Bains said Ottawa’s investment in the aerospace giant is not a matter of if but how will be done.
He said Ottawa wants Bombardier to keep its head office and the jobs connected to its research and development activities in the country.
With files from The Canadian Press
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