Economy

Bombardier cutting 5,000 jobs

Bombardier cutting 5,000 jobs”

It expects to save about $250 million from the cuts. According to Bombardier, the sale of these two assets will net the company $900 million.

The company's new Global 7500 aircraft - the largest and longest-range business jet on the market - meanwhile, has now been certified flight worthy, paving the way for its entry into service in December.

"We continue to make solid progress executing our turnaround plan", said chief executive Alain Bellemare in a statement. In a conference call with investors this morning, John Di Bert, the chief financial officer of Bombardier said that the announced actions were created to show that the company's focus was on efforts to grow earning and cashflows saying: "We continue taking concrete actions to reshape Bombardier's portfolio". "I am very proud of what we have accomplished, and very excited about our future".

The cuts, which are expected to save $250m by 2021, were announced yesterday in the company's third-quarter results.

Bombardier forecast 2019 revenue to increase by 10 per cent to at least $18 billion, powered by more deliveries of its Global 7500s.

The Company delivered strong profitability in the third quarter, achieving its best quarterly performance in years. The company burned through US$370 million of cash in the period, an improvement from the US$495 million it used a year earlier.

In the third quarter, the commercial aircraft business recorded a loss of US$9 million before interest, taxes and special items.

"2018 free cash flow was lower than my expectations", said Morningstar analyst Chris Higgins.

"Bombardier also announced today 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 company will only be able to attain its target of breaking even on a cash-flow basis this year by including the proceeds from a US$635 million land sale in Toronto. First, with the heavy aerospace investment phase successfully completed, Bombardier will right-size and redeploy its central aerospace engineering team. Bombardier CTO Francois Caza will also lead a new Advanced Technology Office, or ATO, that will apply aviation technology to its train business.

The company said the job cuts would be made to "streamline" operations as part of a broader restructuring plan.

Bombardier and Viking could not immediately be reached for comment. Michael Ryan will assume the role of Chief Operating Officer for BAES.

Montreal-based Bombardier made the restructuring announcement Thursday morning as part of its earnings for the quarter ended September 30, which showed a 5 percent drop in revenue but a profit of $149 million compared with a loss in the year-ago quarter.

CAE is picking up the training business for $645 million, along with spending an additional $155 million for the monetization of royalties from the business.



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