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Bombardier cuts CRJ output

Bombardier will reduce its fiscal year 2006 CRJ200 production by 31% as part of a market "alignment" by the Canadian manufacturer that will also cut 2,000 jobs from sites in Montreal, Canada and Belfast, UK.

The manufacturer warns that there could be more cuts in its fiscal year between 1 February 2005 and 31 January 2006 should the financially troubled Delta Air Lines defer or cancel its remaining CRJ order, which calls for the delivery of 32 CRJ200s in the 2005 calendar year. This could result in as many 1,200 additional job losses.

The cuts come less than six months after Bombardier confirmed that its CRJ200 production for FY2005 would be reduced by 20 aircraft to compensate for a deferral by US Airways.

The latest revision will reduce annual production of the 50-seater from 98 deliveries in FY2005 to 68 in FY2006. The resulting redundancies between November and July 2005 - 560 from Belfast, 460 from Dorval, 410 from Mirabel, 260 from St Laurent and 310 from the company's administrative staff - will cost $26 million in severance. This will be accounted this fiscal year, says Bombardier, a move that will result in an operating loss for the firm's Aerospace division. The job losses represent almost 8% of the company's 26,000 employees.

Meanwhile, the planned increase in CRJ700/900 production has been cancelled, and the rate will remain constant at 77 aircraft in FY2006. However, FY2006 production of Dash 8 Q-Series turboprops will increase to 33 aircraft from 20 this year and the manufacturer predicts a continuation of the boom in business jet sales.

DARREN SHANNON / WASHINGTON DC

 

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