news news Bombardier cuts 3 000 aerospace jobs worldwide despite profit increases

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Bombardier cuts 3,000 aerospace jobs worldwide despite profit increases



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By The Canadian Press


MONTREAL - Canada's largest aircraft maker, Bombardier Inc., is slashing another 3,000 jobs around the world, including at plants in Montreal and Toronto, as it copes with weaker demand for business jets.

The cuts announced early Thursday came as Bombardier reported increased profits and revenues for the fiscal fourth quarter and full business year and continue the erosion of jobs in Canada's manufacturing sector, centred in Ontario and Quebec.

Companies in the automotive, machinery, forestry and aircraft sectors have cut thousands of jobs in the last 18 months as the recession squeezes demand for their products from the key United States market and customers around the world.

At Bombardier, the Montreal company said the 3,000 aerospace jobs would be eliminated this year and would impact employees in Canada, the United States, Mexico and Northern Ireland.

In Canada, the company operates major aircraft assembly operations in suburban Toronto and Montreal.

"There is no doubt that we are going through challenging times and our business environment is changing fast," Bombardier chief executive Pierre Beaudoin said in a statement.

'However, we believe we are well positioned to face this difficult economic environment with a strong balance sheet, high level of liquidity as well as a large and diversified backlog, both by product and geographies."

Thursday's announcement affects about 10 per cent of Bombardier's aerospace workforce and comes less than two months after the company cut 1,360 aerospace jobs in response to waning demand for its Learjet and Challenger aircraft.

However, the Montreal company is also hiring hundreds of workers for its new CSeries and other aircraft programs.

The global aircraft sector has been hit hard by the recession, which has squeezed jet orders from major airlines. As well, the market for corporate jets has been hurt by the economic slump and the credit crunch, which has made it more expensive for companies to finance the purchase of corporate jets.

In the United States, companies have also shied away from buying corporate jets recently after public criticism that such spending would be inappropriate during a recession when tens of thousands of people are being laid off each month.

Earlier this year, global aircraft giant Boeing Co. (NYSE:BA) announced it plans to cut 10,000 jobs as the Chicago company faces weaker air traffic and pressure on military budgets.

Meanwhile, Cessna Aircraft Co., a maker of corporate jets, said it plans to lay off another 2,000 workers, about 13 per cent of its workforce, as the slumping worldwide economy forces more customers to cancel or delay orders for new aircraft.

Moreover, Hawker Beechcraft, another business jet maker, will eliminate 2,300 positions, citing "extreme volatility in the marketplace".

In its financial report, Bombardier (TSX:BBD.B) reported consolidated net income of US$309 million, or 17 cents per share for the quarter ended Jan. 31, up from year-earlier profits of $218 million or 12 cents per share.

The company, which reports in U.S. dollars, said the increase in net earnings was due largely to lower income tax rates throughout the quarter and full fiscal year.

Quarterly revenue edged up to $5.4 billion from $5.3 billion recorded during the same quarter the year before.

Bombardier said fiscal 2009 profit more than doubled to $1 billion or 56 cents per share from $317 million or 16 cents per share booked the previous year. Full-year revenue reached $19.7 billion compared to $17.5 billion in fiscal 2008.

Despite the strong financial results, Bombardier said quarterly and full-year aircraft sales declined, prompting the company to reduce its business and regional jet production outlook for the coming year.

Bombardier reported 93 aircraft deliveries in the fourth quarter and 349 for the full year, down from 115 and 361 delivered during the respective periods the year before.

Quarterly net orders plunged to six from 213 recorded during the same quarter of fiscal 2008, while full-year net orders fell to 367 from 698.

Bombardier said it expects to deliver 25 per cent fewer business aircraft in the coming year, while commercial aircraft delivery is expected to rise 10 per cent.

The company received a sales boost last month when Germany's Deutsche Lufthansa AG and Lease Corp. International placed orders for a total of 50 of Bombardier's hotly-anticipated CSeries jets. The two carriers have options for a total of 50 more aircraft.

In another development Thursday, Berlin-based Bombardier's transportation unit said it has signed an order with Lloyds TSB and London Eastern Railways, a subsidiary of National Express, for 30 four-car train sets in a deal worth about US$249 million.

In early Thursday trading, Bombardier B shares rose 21 cents to $3.25, a fain of 6.5 per cent.