By Lisa Gordon | January 22, 2014 Estimated reading time 5 minutes, 28 seconds.
Bombardier announced on Tuesday that it plans to cut 1,700 jobs from its aerospace division, with the majority of them being in the Montreal region.
Shortly after the announcement on Jan. 21, company spokesperson Haley Dunne told Canadian Skies that the cuts are being made so resources can be focused on the aircraft programs currently under development, including the new CSeries narrow-body commercial jet – which has been delayed again and is now slated for entry into service in the second half of 2015. According to Bombardier, that date has been pushed back to accommodate further flight testing, to ensure “overall system maturity.”
On the business aircraft side of the equation, the manufacturer has also been struggling with delays incurred in its Learjet 85 program. The first business jet with an all-composite fuselage, the Learjet 85 had been targeted for its maiden flight in early 2013; then, it was pushed back to the end of that year. It’s now expected to fly sometime in the “coming weeks.” Entry into service is still set for this summer, but that too may be revised, depending on flight test data.
Bombardier has also invested heavily in its Global 7000 and 8000 long-range business jet lines.
Taken all together, it’s been a challenging year for the Canadian company, which announced on Monday that orders for its commercial and business aircraft were down 19 per cent in 2013, compared to numbers from the previous year.
Dunne said the company has been putting universal cost reduction programs in place since late 2012. “We’ve been asking employees and management to look at the budgets, and look at ways to save costs,” she said. “At this point, we need to continue to manage the business prudently, and unfortunately it’s resulted in the difficult decision to reduce the workforce by 1,700 positions.”
About 300 of those jobs were already eliminated last December in both Canada and the U.S., explained Dunne. Of the remaining cuts to come, she said they will be primarily in manufacturing and assembly, engineering, sales and after sales service, and administrative support functions. In total, about 1,100 employees will be laid off in Canada, mostly at the Mirabel plant, with 600 affected in the U.S. The cuts will affect permanent, contract, unionized and non-unionized workers.
When asked if Bombardier’s overseas locations will also see job cuts, Dunne replied that every branch is participating in the ongoing cost containment exercise. “Different areas of the business have found different places where they can conserve cash,” she said. “One of our largest concentrations of employees is in Canada, so it would make sense that this is where most of the impact would be. But it’s all a matter of where we were able to cut in other places.”
Dunne did offer some hope for employees who are facing job loss. Bombardier currently has several hundred available openings, and the company will meet with each individual to see if they might fit into another position that is deemed “more essential to the core business.” In cases where a match is made, employees may be faced with taking a job at any one of Bombardier’s worldwide locations.
The company’s human resources department will be meeting with employees during the next few weeks. Since individual employees have not yet been notified, Dunne refused to provide further details on which specific departments, business units or programs will see staff reductions.
When asked if the recent delays in its development programs directly contributed to the latest job cuts, Dunne said there are a number of factors that contribute to the company’s financial health. “Right now, I couldn’t give any predictions about any kind of financial impact from any of the programs.”
She said more details will be provided during Bombardier’s next financial earnings conference call, scheduled for Feb. 13. That call will also reveal the manufacturer’s aerospace order backlog as of the end of last year. Previously, Bombardier reported an order backlog of US$32.9 billion, as of Sept. 30, 2013.
As 2014 unfolds, Dunne said Bombardier Aerospace will continue to put the emphasis on development. “We have a number of programs that are very promising. We do have a very bright future; right now, we’re just making sure we’re focusing all our energies on the right things.”
