The Gulf Time Newspaper One of the finest business newspapers in the UAE brought to you by our professional writers and editors.
Washington / Bloomberg
Bombardier Inc. said it planned to cut about 7,000 jobs as it reported fourth-quarter profit that fell short of analysts’ estimates. It also signed a letter of intent for Air Canada to buy at least 45 of the planemaker’s C Series jets.
The job cuts, from a workforce of about 64,000, will occur during the next two years and result in restructuring charges of as much as $300 million, the company said. The Air Canada deal, while not a firm order, represents a list value of about $3.8 billion. The airline has an option to purchase an additional 30 C Series aircraft.
Profit fell as the company broke even on a per-share basis, Bombardier said Wednesday, less than the 2-cent average of 15 analyst estimates compiled by Bloomberg. Revenue dropped 16 percent $5.02 billion, trailing the $5.51 billion average forecast.
Chief Executive Officer Alain Bellemare, installed a year ago with a mandate to restore profitability, is working to overcome cost overruns and delays on the $5.4 billion C Series aircraft program. Having reached agreement on $2.5 billion worth of asset sales in the fourth quarter, Bellemare is now attempting to secure additional financing from Canada’s federal government.
Quebec agreed in October to invest $1 billion in the C Series program to shore up funding for the jet and assuage customer concern. Provincial Transport Minister Jacques Daoust has since said the province is seeking an equivalent commitment from the federal government.
Bombardier also raised $1.5 billion by selling 30 percent of its rail unit to Caisse de Depot et Placement du Quebec, the province’s public pension fund manager. The transaction, announced in November, closed last week.