Bombardier has announced measures that will produce 5,000 layoffs for the next one and a half years.
The Montreal-based company said Thursday morning the move would generate $ 250 million in annual savings. He also announced that he would sell the Q-Series aircraft program to Longview Aviation Capital for $ 300 million.
The airline reached another agreement to sell its business airplanes and technical training units, which ran out of Montreal, Quebec City and Dallas, to other Montreal multinational companies, CAE.
Bombardier also sold training services to CAE for $ 645 million. The transaction with CAE will generate $ 800 million in revenue for Bombardier and is expected to be completed by mid-2019.
Bombardier said the agreement with Longview and CAE would amount to $ 900 million in net proceeds.
Third-quarter company revenue reached US $ 3.6 billion, down about five percent compared to the same period last year. The company posted a profit of $ 149 million for this quarter, better than the $ 100 million loss it saw in the same period the previous year.
Bombardier CEO Alain Bellemare said cuts and sales were needed, and the company would continue to "streamline" its operations.
Before news of the sales of the turboprop division, analyst George Ferguson with Bloomberg Intelligence said he thought the Q Series "will produce little or no profit" for the company this year, so it makes sense to sell it. While most of the attention was in Bombardier's center on corporate jets, some of them made large amounts of money for the company.
That is different from the railroad transportation section of the business, which continues to generate cash. "Transportation will produce almost all cash flows as aerospace … will be the best during 2018," Ferguson said.
John Di Bert, Bombardier's chief financial officer, said in a conference call with investors Thursday morning that "the action announced this morning showed our focused efforts to grow revenue and cash flow."
"We continue to take concrete action to reshape Bombardier's portfolio."
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Bombardier spokesman Simon Letendre confirmed that 500 jobs would be cut in Ontario, where the company employs 6,500 people. This will cut 2,500 jobs in Quebec. This company has 70,000 employees worldwide.
It is not immediately clear where the remaining work cuts will come.
David Chartrand, Quebec coordinator for the International Association of Mechanics and Aerospace Experts, said Thursday's announcement was "unfavorable and sad," speaking to Radio-Canada morning radio host Alain Gravel on Thursday.
"The biggest frustration is that Bombardier has once again announced big cuts before the holidays," Chartrand said.
He said he wanted the company to provide further details about which employees would be affected. About 20,000 people work for Bombardier in Quebec, he said.
"That's 20,000 employees with question marks on their minds."
Chartrand said the pattern of agreements Bombardier had made over the past few years, including handing over its C Series aircraft to Airbus and selling Q400 facilities, showed the possibility of shedding commercial aircraft operations to focus on its business fleet.
"That is clearly one of the questions we will ask the company."
Chartrand said he hoped unions could reach an agreement with CAE which would be similar to the agreement reached with Airbus: for CAE to hire Bombardier employees and maintain their seniority.
Quebec Economy Minister Pierre Fitzgibbon said the government would look for ways to help workers affected by cuts, and "if necessary," how it could support projects from other Quebec companies that could create jobs.
With files from Radio-Canada