The gloomy layoff news came with a silver lining, however: Air Canada’s agreement to buy 45 planes from Bombardier’s struggling CSeries aircraft line, with an option to purchase up to 30 more.
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“We have a plan to make this great company stronger and more competitive”.
Federal Innovation Minister Navdeep Bains said earlier the government will ensure any action taken with respect to Bombardier will be in “the interest of Canadians”.
“We are astounded by the Quebec government decision regarding the former Aveos workers in their plight to get their jobs back”, said Dave Ritchie, Canadian vice-president of the International Association of Machinists.
Bombardier has announced it will eliminate 7,000 jobs over two years and more than one-third of those will be in Canada.
Bombardier said it hopes Ottawa will come through on its request for financial assistance for the CSeries, just as the Quebec government has done in providing $1 billion (U.S.) in support.
Bombardier plans to hire in certain growth areas including in its C Series aircraft program, which continues to increase production rate and to receive orders that generate new jobs at its facility in Mirabel, Quebec.
The company based in Montréal now has 678 total orders and commitments for the CSeries, including 243 firm orders, well behind the volume necessary to consider the CS 300 a cost-effective project.
Bellemare said Air Canada’s order was a strong endorsement for the line of jets, which faces fierce competition from the Boeing 737 and Airbus A320.
Bombardier’s (BBDb.TO) controversial dual class share structure has prevented the plane and train maker from being sold off piece by piece to foreign rivals, according to CEO Alain Bellemare. That news was softened by a promise to hire more workers to support CSeries production.
The order, he said, “will become a catalyst for future orders in North America and around the world”. The company also forecast lower-than-expected revenue for 2016.
The country has only added 0.7 percent new jobs over the past 12 months, missing the estimated 0.9 to 1 per cent needed to keep up with the population.
For 2016, the company expects to generate between $16.5 billion and $17.5 billion in revenues, with EBIT margin improvements across transportation, business aircraft and aerostructures while it ramps up the CSeries program. Bombardier’s rail business also received an investment of $1.5 billion in November from Quebec’s public and private pension fund, Caisse de dépôt et placement du Québec.
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Bombardier will determine the ratio for the reverse stock split later, but it said it was targeting an initial post-consolidation price of C$10 to C$20 per class A or Class B subordinate voting share.
