Bombardier workers in Northern Ireland and the Midlands face uncertainty after the Canadian company announced 5,000 job cuts globally on Thursday. The federal Canadian government also later presented the company with a $372 million interest free loan.
The cuts will be made in the next 12 to 18 months and Bombardier will also sell off "non-core assets" worth about 900 million Canadian dollars (£524 million), including the Q Series aircraft programme and the de Havilland trademark.
It also announced the sale of its aircraft's flight and technical training business to CAE, and the monetization of royalties for about US$800 million. "Net proceeds from the transactions are expected to be approximately $900 million after the assumption of certain liabilities, fees, and closing adjustments".
Longview Aviation, the parent company to Viking Air Ltd., said once it completes its deal with Bombardier it will become North America's largest commercial turboprop aircraft manufacturer. 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.
Bombardier reported a net income of about 149 million Canadian dollars in the third quarter, compared to a loss of 100 million Canadian dollars in the same quarter past year.
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Bombardier manufactures about 28 to 30 Q400 aircraft annually at its Downsview property in Toronto, that the company sold earlier this year to the Public Sector Pension Investment Board. Bellemare cited capital needs at the company's rail business for spoiling the cash-flow goal, which includes leeway of plus or minus US$150 million.
About 2,500 Bombardier workers will be laid off in Quebec and 500 in Ontario while about 2,000 cuts will be overseas.
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. About 2,000 other cuts will be overseas.
For the quarter, Bombardier's revenues reached $3.6 billion, representing 3% organic growth year over year, from Transportation, Business Aircraft and Aerostructures, as the Company deconsolidated revenues from the C Series program following the closing of the Airbus partnership. Analyst Ferguson claims that the company is committed to streamlining its operations and expects even more asset sales that will turn the company into a shadow of its former self.