Bombardier announces dramatic restructuring, cuts 5,000 jobs worldwide
Bombardier will sell the Q Series aircraft program for $800 million to a wholly owned subsidiary of Longview Aviation Capital Corporation.
At the same time, the Canada-based company said the de Havilland trademark would go to CAE for $300 million.
The sales were part of a strategy designed to focus on growth opportunities in the transportation, business aircraft and aerostructures segments, Bombardier said.
Both transactions are expected to close by the second half of 2019, following the usual regulatory approvals.
Net proceeds from the transactions are expected to be approximately $900 million after the assumption of certain liabilities, fees, and closing adjustments.
As part of a “right-sizing” exercise, Bombardier said it would also shed 5,000 jobs over the next 12-18 months.
“Bombardier has launched a company-wide restructuring initiative focused on optimising production and management processes, flattening management structures and further reducing indirect costs,” explained a statement.
The cuts would lead to savings of around $250 million annually, Bombardier added.
“With our heavy investment cycle now completed, we continue to make solid progress executing our turnaround plan,” said Alain Bellemare, president, Bombardier.
“With today’s announcements we have set in motion the next round of actions necessary to unleash the full potential of the Bombardier portfolio.
“During the earnings and cash flow building phase of our turnaround, we will continue to be proactive in focusing and streamlining the organisation, and disciplined in the allocation of capital.”
For the third quarter of financial 2018, Bombardier’s revenues reached $3.6 billion, representing three per cent organic growth year over year, from transportation, business aircraft and aerostructures, as the company deconsolidated revenues from the C Series program following the closing of the Airbus partnership.
For the full year, Bombardier expects revenues of approximately $16.5 billion, at the low end of its guidance range.
The company delivered strong profitability in the third quarter, achieving its best quarterly performance in years.
EBIT before special items grew 48 per cent year-over-year to $271 million, and the company remains on track to reach the top end of its guidance for the full year of approximately $1 billion.