Bombardier to cut 5000 jobs in restructuring

Bombardier Inc is selling off its turboprop program and another non-core division to focus on its transportation and business jet

Bombardier Inc is selling off its turboprop program and another non-core division to focus on its transportation and business jet

Bombardier has announced plans to cut 5,000 jobs globally, leading to concerns for workers in Northern Ireland.

Bombardier in Derby said there were no indications yet that the job cuts would have a significant impact in the city.

Bombardier announced on Thursday it is selling the Q400 program to a Longview subsidiary for about US$300 million, on top of the sale of its flight training business to CAE Inc. for about US$645 million.

Bombardier also announced the sale of a number of non-core assets, in line with its strategy of focusing on growth opportunities in its Transportation, Business Aircraft and Aerostructures segments.

The latest redundancy announcement from Bombardier comes as the manufacturer reported revenues of $3.6bn (£2.75bn) for the the third quarter, representing a 3 per cent from the same period in 2017 and its best quarterly return in years.

"This is very bad news, it sends a worrisome message about the future of the industry", Renaud Gagne, head of the Unifor labour union's Quebec branch, said in a statement. The overall restructuring is expected to take place over the next year and a half and will save the company US$250 million per year.

The company said it forecast 2019 revenue to grow by 10 per cent to US$18 billion or more, driven by a pickup in deliveries of its Global 7500 business jets.

The company said it reached definitive agreements for the sale of non-core assets and the monetization of royalties, which is expected to generate approximately $900 million in net proceeds, increasing financial flexibility as it approaches the final deleveraging phase of its turnaround plan.

Bombardier said it would try to turn its money-losing regional jet program around by slashing costs, and boosting volumes, but would also explore strategic options for the program. "We will communicate with our employees in more detail over the coming weeks". Company workers were frustrated by the lack of information, it added.

The announcement came as Bombardier unveiled its third-quarter results, in which pre-tax profits doubled to $267m for the three months to September compared with the same period a year ago. Analysts, on average, expected $3.87 billion U.S.in revenue and a profit of two cents per share.

Last year Bombardier sold a majority stake in its C Series passenger jet business to European aerospace giant Airbus for no cost.

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