July 10, 2019 / 3:10 PM / 12 days ago

Canada's Bombardier to lay off 550 workers at Ontario rail plant

MONTREAL (Reuters) - Canada’s Bombardier (BBDb.TO) said on Wednesday it would lay off around half of the workforce, or about 550 employees, at its passenger train plant in Ontario, effective Nov. 4, confirming earlier media reports.

FILE PHOTO: Bombardier's logo is seen on the building of the company's service centre at Biggin Hill, Britain March 5, 2018. Picture taken March 5, 2018. REUTERS/Peter Nicholls/File Photo

The Montreal-based plane and train maker said in a statement that two existing contracts in the province are slated to wind down and the plant has no new trains to build.

Discussions in the spring between Bombardier and the Ontario government for a C$28 billion ($21.42 billion) provincial transit expansion plan are ongoing, said a statement from Unifor, Canada’s largest private-sector union, which represents workers at the Bombardier plant in Thunder Bay.

While the talks have generated some hopes of saving the plant, they have not yet resulted in any firm orders.

Bombardier has been winning work and expanding its rail car manufacturing in the United States, including the June announcement of a new facility in California that will assemble rail cars for San Francisco’s rapid transit system by year-end.

Rail passenger car companies awarded federally funded contracts for rolling stock in the United States will be required to complete 70% of the order with American content next year, putting pressure on manufacturers to build in the country.

By contrast, a provincial rule in Ontario requires rolling stock orders to have only 25% Canadian content.

“When you compare that to the American content, it’s not enough,” said Dominic Pasqualino, president of the union local which represents workers at the Bombardier plant.

“I’ve got a parking lot full of vehicles now. And each car represents a family,” he said by phone.

Ontario transportation agency Metrolinx, which expects to complete its order for 291 Bombardier bi-level commuter coaches in February 2020, began “discussions with Bombardier some time ago to order more coaches,” the agency’s chief executive, Phil Verster, said in an emailed statement.

News of the layoffs were first reported by Canadian Press on Tuesday, citing a government source.

Reporting By Allison Lampert in Montreal and Debroop Roy in Bengaluru; Editing by Sriraj Kalluvila and Jonathan Oatis

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