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Canadian planemaker Bombardier may be forced to cut more jobs at its Mirabel factory if aircraft sales do not pick up. The aerospace group has been hammered by a slump in demand for aircaft and a flood of used jets onto the market, which has dragged down prices for planes. It booked 213 new orders last year, but also suffered 202 cancellations, leaving a net order intake of just 11 aircraft for the year.
"In the weeks and months to come, we're going to have to make a decision depending on (aircraft) sales campaigns we're involved in," said Bombardier Aerospace president Guy Hachey. "It's possible that we may have to cut staff, unfortunately, but we're obviously working very hard to avoid that."
The Mirabel factory, which assembles the 70-seat CRJ700, 90-seat CRJ900 and 100-seat CRJ1000 regional jets, currently employs 1,000 people. It is also the future final assembly site for the company's next new commercial plane, the CSeries.
Hachey said Bombardier is negotiating with 60 airlines on the CSeries, and is in advanced talks with "a handful of them".
Analysts say interested airlines probably include United Airlines, American Airlines, Delta and Alaska Airlines.
Last week Bombardier signed a $3.85bn financing deal with China Development Bank's leasing arm in an effort to boost aircraft sales in China and the Asia-Pacific region.
Hachey’s comments came at the end of last week when Bombardier reported a sharp drop in profits for the fourth quarter and for the full year, although revenues were broadly steady. They fell to $19.4bn from $19.7bn the previous year. Profits were down 43% to $179m in the fourth quarter, and 29% over the year as a whole, to $707m from $1bn.
Bombardier president Pierre Beaudoin said the results were good in light of the severe recession in aerospace. He said last year’s production cutbacks were "necessary steps” to get Bombardier through the downturn.
The backlog in aircraft segments underlines the urgent need for Bombardier to sign up new orders to keep production going. A year ago, its Learjet division had a backlog equivalent to 17 months of production; it is now six months; and its Challenger unit went from 20 months' worth to 13 months. Only the CRJ regional jet division, including the new CRJ1000, has not burned down its backlog, holding fast at 22 months.
The company has $3.4bn in cash reserves, and another $1.5bn from a bond offering that it pulled before re-issuing it successfully last month. |
