Bombardier Inc. is cutting 1,700 jobs in its aerospace division, a 6 percent reduction, as the maker of planes and trains seeks to preserve cash amid delays in new aircraft programs.
Most of the layoffs will be in and around the company’s Montreal base, said a spokeswoman Haley Dunne, and are part of a 1 1/2-year process of cost-cutting as the company focuses on its core business.
The widely traded Class B shares fell 2 percent, reversing an earlier gain, to C$4.03 at 12:56 p.m. in Toronto.
Bombardier’s move follows the fourth postponement for the CSeries jetliner, which the company said last week was now targeted for a late-2015 debut instead of 2014. Last year, Bombardier pushed back the Learjet 85 business aircraft’s entry into service to “summer 2014” instead of 2013.
Delivery delays hurt because they mean a longer wait for payments and can balloon development spending. The CSeries program cost already has climbed to $3.9 billion, 15 percent more than projected, and Sterne, Agee & Leach Inc. predicted last week that the latest postponement for Bombardier’s largest-ever model may tack another $1 billion onto the total.
The announcement was made in an internal memo, which said 300 of the eliminations occurred in December.
© Copyright 2023 Bloomberg News. All rights reserved.