Bombardier to cut 7,000 jobs, stock rises

Bombardier will cut 7,000 jobs, but it won a major order and its stock rose significantly.

CBC Canada writes:

Montreal-based Bombardier plans to cut its workforce by up to 7,000 people even as the company has finally signed a deal to sell its CSeries jets to a major North American airline. Bombardier said Wednesday up to 2,000 of the total cuts will be contractors. Most of the job losses will be in Canada and Europe and be partly offset by hiring in certain areas, such as its new CSeries aircraft program. Worldwide, Bombardier currently has 3,450 people working in its CSeries division, a figure the company expects to rise as it ramps up sales and production. The company has 64,000 employees globally. The aerospace and rail equipment company says the job cuts will begin in the coming weeks and be completed by 2017.

The number of jobs affected include:

• 3,200 from its transportation division.
• 2,500 from its aerostructures and engineering services division.
• 800 from its aerospace product development engineering group.
• 500 from its business aircraft unit.

The company said no jobs will be cut from its commercial aircraft unit, which includes the CSeries. "I just hope the CSeries ramps up quick enough so that anybody who's laid off will be called back to work as quick as possible," said Dave Chartrand, Quebec co-ordinator for the the International Association of Machinists and Aerospace Workers,which represents 4,500 workers in the province. The federal government has been rumoured to be considering offering a bailout to the aerospace giant, similar to the $1-billion lifeline that Quebec offered last year.

Reuters reports:

Bombardier Inc (BBDb.TO) said it received the first order in 16 months for its CSeries aircraft, sending its shares up as much as 30 percent and overshadowing news of the planemaker's lower-than-expected quarterly results and plan to cut 7,000 jobs. The company said on Wednesday that it signed a letter of intent to sell Air Canada (AC.TO) 45 CSeries jets, with an option for 30 more. The order, worth as much as $3.8 billion based on the list price, is the first for the CSeries since September 2014. The Quebec government, which gave Bombardier a $1 billion lifeline last year, said it would drop a lawsuit against Air Canada. In return, the airline agreed to conduct maintenance on CSeries jets in the province.

The Canadian government said it was still in talks with Bombardier on its request for federal aid. The country's transport minister said Ottawa had put no pressure on Air Canada to buy jets from the planemaker. Bombardier Chief Executive Officer Alain Bellemare said the company still wanted federal assistance for the CSeries, which has been plagued by delays and cost overruns. "We are hoping the federal government would come very close to what Quebec did," Bellemare said on a conference call. "Quebec came with a very good structure where they have equity ownership, and we've been benefiting significantly from that."