Bombardier Inc. says it will cut another 1,600 jobs and stop making Learjets, a business jet that has been around for almost 60 years.
The Quebec-based aerospace company announced the moves in posting its quarterly financial results, which showed the company lost $337 million US in the last three months of 2020.
The job cuts will bring the company’s total workforce down to about 13,000 people around the world.
“Workforce reductions are always very difficult, and we regret seeing talented and dedicated employees leave the company for any reason,” said Éric Martel, the company’s president and chief executive officer.
“But these reductions are absolutely necessary for us to rebuild our company while we continue to navigate through the pandemic.”
Unifor, which represents 2,500 workers at a Bombardier facility in Montreal, is calling on the federal government to do more to help the aerospace industry survive the pandemic.
But many of the company’s problems predate COVID-19
The company is currently a shadow of its former self, having gone from an integrated transportation conglomerate that made planes and trains of all shapes and sizes, into essentially a niche maker of business jets.
Its CSeries business, which was touted as the future of the company when it first took to the skies in 2013, was sold to Airbus in chunks in 2017 and then again last year for virtually nothing.
It recently sold its train-making business to European conglomerate Alstom for $3.6 billion, much less than initially thought.
Today, the company’s entire business largely consists of making two types of business jets, the Challenger series and the Global series. The company sold 44 of those jets during the quarter, down from 52 in the same period the year before.
Analysts underscored just how uphill the company’s climb is looking right now.
“While Bombardier outlined a series of restructuring efforts to improve earnings and cash generation, the company’s current financial position highlights the significant heavy lifting that still needs to be done within the organization even after all these asset sales,” TD Bank analysts Kevin Chiang and Krista Friesen said in a note to clients after the news came out.
Bombardier shares jumped 13 per cent in pre-market trading on the Toronto Stock Exchange to about 90 cents a share, which values the entire company at just under $2 billion Cdn. That’s against a total debt load of more than $10 billion.
In 2018, those same shares were worth about $5. The company’s all-time value peaked in 2000 at roughly $25 a share.