Economy

Bombardier to cut 5000 jobs, shares dive on cash flow concerns

Bombardier to cut 5000 jobs, shares dive on cash flow concerns

The company, which is based in Canada and is the biggest manufacturing employer in Northern Ireland, said it planned to cut 5,000 roles around the world and refused to rule out job cuts in the province, where it makes wings for the Airbus A220.

Thousands of workers in Belfast and Derby were left anxious yesterday after the engineering group Bombardier announced a cull of one in every 14 employees worldwide.

Bombardier workers in Northern Ireland and the Midlands face uncertainty after the Canadian company announced 5,000 job cuts globally on Thursday.

The carrier reached another agreement to sell its business aircraft flight and technical training unit, which is run out of Montreal, Quebec City and Dallas, to another Montreal multinational, CAE.

The cuts will come mostly from its aerospace division with some from the firm's rail division.

The firm will also sell its Q Series aircraft for $900m (£687m) and the de Havilland trademark for $300m.

A spokesman said the firm does not yet have details on the remaining expected job losses.

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The company on Thursday forecast 2019 revenue would grow by 10 percent to $18 billion or more, driven by a pickup in deliveries of its Global 7500 business jets.

"We have set in motion the next round of actions necessary to unleash the full potential of the Bombardier portfolio", said chief executive Alain Bellemare.

Karl Moore, an aviation expert at McGill University's Desautels Faculty of Management, said the layoffs and selloffs will allow Bombardier to shift away from regional jets and shrink its debt. The layoffs are expected to take place over the next 12 to 18 months and are expected to save Bombardier $250 million by 2021.

For the third quarter ended September 30, Bombardier reported $267 million in earnings before interest and taxation, compared with $133 million a year earlier, which were restated due to accounting changes.

The strong profit came despite a five percent drop in quarterly sales from the same period a year ago to $3.6 billion.

The Canadian plane and train maker said it would only be able to meet its 2018 free cash flow estimate by using $635 million (484.88 million pounds) in proceeds from the sale of a Toronto plant earlier this year.

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