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A steady stream of taxpayers' money does not prevent Bombardier (BBD-B.TO) from eliminating more jobs. It plans to cut about 5,000 in the next year or so. The downsizing should save the Montreal company $ 250 million by 2021. Detailed information was revealed in the company's latest earnings report.
<p class = "canvas-atom canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "" Once again, it seems that the government has been confused, "Benjamin Benjander of Contra The Heard Investment Letter said Yahoo Finance Canada. "Unfortunately, the norm is to look at the short term in many ways and the electoral prospects in relation to what will work in the long run." Gallander of The Heard Investment Letter told Yahoo Finance Canada. "Unfortunately, the norm is to look at the short term in many ways and the electoral prospects in relation to what will work in the long run."
In what appears to be a shift in its train and business jet divisions, Bombardier is also selling what it calls non-core assets. Longview Aviation Capital buys the Q Series turboprop aircraft program. CAE buys Bombardier's training services. Bombardier says sales will bring in $ 900 million.
"With our investment cycle now complete, we continue to make substantial progress in executing our turnaround plan," said Alain Bellemare, Bombardier's Chief Executive Officer. "With today's announcements, we have launched the next round of actions needed to unleash the full potential of Bombardier's portfolio."
Bombardier shares fell sharply early in the session, despite cost-cutting efforts. The dive was serious enough to trigger a commercial stop. The probable amount of funds available was well below estimates.
Bombardier shares fell after the results were released. (Yahoo finance)
Gallander has bet on Bombardier in the past, but debt-related concerns have pushed him away from him recently. He says that the sale of assets is important.
"It seems that in May, it was not on the table. This is a major directional change. Add to that the sale of a majority stake in Series C to Airbus and these days are very sad for the Canadian economy, "said Mr. Gallander. "I think it can be compared to a lower level at the stop of Avro Arrow, a day known in the Canadian aviation industry as Black Friday with a loss of nearly 30,000 jobs. "
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"Alain Bellemare must decide where, in his various sectors of activity, to invest his investments, it is clear that the future is more promising in the divisions Business Jets and Transports than in the Q400 or the training of pilots", declares Mr. Moore.
The announcement of job cuts has angered politicians. Parti Québécois interim leader Pascal Bérubé called the announcement catastrophic job in Quebec and called on Bombardier executives to make public money.
The union representing 19,000 workers is worried about the future of the aviation industry.
"This is very bad news," said Renaud Gagné, Director of Unifor's Quebec Division. "This sends a troubling message for the future of the industry even as the industry suffers from a shortage of manpower."
But Karl Moore was not surprised by the announcement.
"The layoffs are largely attributable to the development of 7,000 projects. Therefore, there is no point in creating new products for this work. It is just part of the natural ebb and flow of aircraft development. I think these engineers would have seen it coming for some time, "Moore says.
Despite today's turbulence, Bombardier expects sales growth of 10% next year, driven by its Global 7500 business jet.
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