Bombardier axes another 3,000 jobs in North America and UK

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Canadian regional aircraft manufacturer Bombardier is cutting another 3,000 workers from its aerospace division in North America, Mexico and Northern Ireland by the end of this year.

Some 1,030 jobs will go at its Montreal facility, another 975 at Belfast, with 475 in Toronto, 470 at its US stations including Wichita, plus 50 at Queretaro in Mexico.

These reductions are in addition to 1,360 job losses disclosed during February in relation to adjusted production rates of its business jets.

"Business aircraft demand has deteriorated rapidly during the second half of calendar 2008 and is expected to remain weak for the foreseeable future," it says.

As a result, says the company, Bombardier expects to delivery 25% fewer business aircraft this fiscal year, although deliveries of commercial aircraft are still forecast to rise by 10%.

Bombardier says, however, that the production rate of its CRJ NextGen jets will be reduced in the latter part of fiscal 2010 to adjust for a slowing of new orders and "deferral requests by some customers".

 
 © Bombardier

Impact of this cutback, it adds, is reflected in the lay-offs, which amount to a further 10% reduction of its workforce. Severance costs associated with the losses, it says, will reach $30 million.

The aerospace division has revealed the cuts after posting a near-60% rise in earnings before interest and tax to $896 million for last year.

Its revenues rose to $10 billion from $9.7 billion in the year to 31 January 2009.

The backlog at the end of the year increased to $23.5 billion. Commercial aircraft net orders totalled 114 while 110 were delivered during the year.

New orders for the CSeries aircraft from Lufthansa and lessor LCI will allow the manufacturer to re-allocate some employees to new positions, it says, reducing overall headcount reduction.

Bombardier says its EBIT margin will be "negatively impacted" until markets return to normal economic conditions but the company says it "remains committed" to achieving a margin of 12% by fiscal 2013.