Bombardier Inc said on Thursday it would sell two of its units for $900 million and cut about 5,000 jobs as the Canadian plane and train maker reins in costs and focuses on its core transportation and business jet units. Bombardier said that 3,000 of the job cuts will happen in Canada over the next 18 months and will save the company $250 million USA a year in salary and benefit expenses.
The announcement came as Bombardier unveiled its third-quarter results, in which pre-tax profits doubled to $267m for the three months to September compared with the same period a year ago. In February 2017, the federal government said was providing $372.5 million in loans over a four-year horizon to "support thousands of good middle-class jobs".
Sales were down 5% to $3.6bn, but revenue is expected to jump 10% to at least $18bn next year.
This is a developing story and will be updated.
"The Dash 8 turbo-prop is the ideal complement to our existing portfolio of specialized aircraft including the Twin Otter and the Canadair CL 215 and 415 series of water bombers", Longview Aviation chief executive David Curtis said in a statement.
The company said it will sell its Q400 turboprop aircraft program to a subsidiary of Longview Aviation Capital Corp. for about US$300 million.
GMB, the union for Bombardier workers, said it is demanding answers for its members in Northern Ireland.
De Havilland is one of the oldest brands in commercial aviation.
Michael Mulholland, GMB regional organiser, said: "Bombardier jobs are crucial to Belfast's economy and GMB will fight tooth and nail to save them". Anthony Scilipotti, founder of Veritas Investment Research in Toronto said: "Bombardier is desperate and it's unfortunate that the unsuspecting taxpayer is shouldering the burden for management's terrible decision making. We understand that", he added, pledging continued support for the aerospace sector.
In the third quarter, adjusted earnings rose to 4 cents a share, topping the 2 cent average of analyst estimates compiled by Bloomberg.
Revenue in what was the company's third quarter totalled US$3.64 billion, down from US$3.84 billion a year ago. The deals with Longview and CAE should net $900 million in income.
"Bombardier also announced today the sale of a number of non-core assets, in line with its strategy of focusing on growth opportunities in its transportation, business aircraft and aerostructures segments".
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