Bombardier to cut 1,800 jobs, aerospace head retires

Wed Jul 23, 2014 8:23pm EDT

A plane flies over a Bombardier plant in Montreal, January 21, 2014. REUTERS/Christinne Muschi

A plane flies over a Bombardier plant in Montreal, January 21, 2014.

Credit: Reuters/Christinne Muschi

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(Reuters) - Struggling with long delays in its CSeries jetliner, aircraft maker Bombardier Inc on Wednesday announced it will reorganize its business structure and cut 1,800 jobs, and it said the head of its aerospace division would retire.

The Montreal-based company is splitting its aerospace unit into three segments focused on business aircraft, commercial aircraft and aerostructures and engineering services.

The three units, along with Bombardier's rail-industry focused transportation unit, will all have separate heads reporting directly to Chief Executive Officer Pierre Beaudoin.

As part of the moves, Bombardier Aerospace President and Chief Operating Officer Guy Hachey will retire.

His retirement is the latest senior departure from the CSeries program. Last year, Bombardier replaced Chet Fuller, head salesman for the CSeries. Gary Scott, head of Bombardier's commercial plane unit and a champion of the CSeries program, retired in 2011.

"Stability is important for an aircraft program, and they haven't been very good at all about stability," said aerospace analyst Richard Aboulafia of Virginia-based Teal Group.

The revamp means 1,800 aerospace jobs would be eliminated, Bombardier spokeswoman Isabelle Rondeau said. Bombardier had 76,400 employees at the end of 2013 of which 37,400 worked in the aerospace division, she said.

The job cuts are in addition to reductions announced in January, when Bombardier said it would cut 1,700 aerospace jobs. The company has been pushing to preserve cash after costly setbacks in the development of the CSeries.

Wednesday's shakeup comes as Bombardier continues to work on the issues that have stymied the CSeries program.

The new jet family is meant to crack the 100- to 149-seat market and pits the company against industry giants Boeing Co and Airbus. Bombardier has touted the CSeries jet's superior fuel and operating efficiency but has faced a number of obstacles and delays, including an engine failure that grounded its test aircraft in May.

"The new aerospace organizational structure will enable us to be more agile and flexible in addressing customer needs, while increasing our focus on growth areas," Beaudoin said in a statement.

The company said the new structure will be in place Jan. 1.

Hachey has been high-profile in promoting the CSeries program, speaking with media and appearing at airshows, including the Farnborough International Airshow in England that ended last week.

Bombardier surprised many analysts and investors by securing a sizable number of orders for the CSeries at Farnborough, despite the aircraft not making an appearance at the airshow.

The company said its new aerostructures and engineering unit will specialize in the design and development of composite and metallic aerostructures in all classes of civil aircraft and all categories of structure, including fuselages and wings.

(Additional reporting by Solarina Ho in Toronto and Kanika Sikka in Bangalore; Editing by Sriraj Kalluvila, Lisa Shumaker, Amran Abocar and Cynthia Osterman)

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Comments (1)
GaryDmn wrote:
This may be the most undervalued company in North America, because over the next decade the developing world will be adding regional airports and rail, as their standard of living rises. Mass transit should boom and Bombardier is the largest player in rolling consumer transit, from trams, to light rail and high speed trains. On the regional airport side, China has several cities that populations over 1 million that do not have a commercial airport to speak of and they are planning to build many over the next decade.

Jul 24, 2014 2:42pm EDT  --  Report as abuse
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California state worker Albert Jagow (L) goes over his retirement options with Calpers Retirement Program Specialist JeanAnn Kirkpatrick at the Calpers regional office in Sacramento, California October 21, 2009. Calpers, the largest U.S. public pension fund, manages retirement benefits for more than 1.6 million people, with assets comparable in value to the entire GDP of Israel. The Calpers investment portfolio had a historic drop in value, going from a peak of $250 billion in the fall of 2007 to $167 billion in March 2009, a loss of about a third during that period. It is now around $200 billion. REUTERS/Max Whittaker   (UNITED STATES) - RTXPWOZ

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