Bombardier to cull 5,000 jobs and sell off $900m in assets
Bombardier outlined plans to axe 5,000 jobs from its global operations and sell off $900m (£687m) in non-core assets today, sending its share price crashing down by 15 per cent.
The Canadian plane and train manufacturer has launched a company-wide restructure focused on streamlining production and slashing costs as it flattens management structures.
Around 5,000 jobs will go as a result between the next 12 to 18 months, helping it save around $250m (£191m) each year by 2021.
The company warned that its 2019 revenue would be hit by a restructuring charge as a result.
Around $900m should come in from the sale of non-core assets including its business jets manufacturing division and its Q Series turboprop propeller plane arm.
“With our heavy investment cycle now completed, we continue to make solid progress executing our turnaround plan,” said Alain Bellemare, president and chief executive of Bombardier, said.
“With today’s announcements we have set in motion the next round of actions necessary to unleash the full potential of the Bombardier portfolio. During the earnings and cash flow building phase of our turnaround, we will continue to be proactive in focusing and streamlining the organisation, and disciplined in the allocation of capital. I am very proud of what we have accomplished, and very excited about our future.”
Bombardier employs around 5,500 in Northern Ireland, around 4,000 of whom work at a factory in Belfast, while 1,600 people build trains for the firm in Derby.
“For Bombardier’s UK-based operations in Derby and Belfast, the fall out from this announcement is unclear and this could have a knock-on effect on the domestic supply chain," said Paul Adams, aerospace sector specialist at management consultancy, Vendigital.
“The company has 900 approved European suppliers, of which about 800 are in the UK and Ireland, fulfilling orders worth around £200m. Any orders that relate to the turboprop are likely affected.”
The news came as Bombardier reported that third quarter earnings grew 48 per cent year-on-year to $271m, with revenue growing three per cent to $3.6bn.
Full year revenue will come in at the low range of the company's guidance at around $16.5bn.