Tucson Operation Shutting Down

The world's third biggest airplane maker, Canada's Bombardier, is retooling its corporate jet division. That means shutting down the company's operations in Tucson (AZ).

The Financial Times reports at least two Bombardier types will be assembled at its plants in Wichita (KS) and near the Dorval airport in Quebec, Canada. The idea is to save $25 million a year at the cost of 1,150 jobs.

This is the fourth time Bombardier has restructured in the post-9/11 environment. From employing 38,000 workers in mid-2001, the Financial Times reports Bombardier cut 3,800 jobs right after the September 11th, 2001, terror attacks. Another 1,980 were blown out the following year and, in March, 2003, Bombardier laid off 3,000 more. By the end of next year, the company's payroll is expected to drop to 26,500 workers.

Pierre Beaudouin, president of Bombardier Aerospace, said in an interview with the FT, "we must be patient. We think we are in the recovery stage, but it is still very fragile." Customer interest was returning, but Bombardier is still waiting on that to be reflected in new orders.

In January, 2001, Bombardier reported it sold 203 aircraft during the previous year. That number was down to 162 the following year. This year, Bombardier is only expected to deliver 77 planes. Now, as the dim light of recovery seems to be just over the horizon, Beaudouin says his company is trying to build a backlog of orders, rather than build a "white tail" fleet of spec planes.

It's not all doom and gloom in Montreal. Bombardier's share of the regional jet market for commercial operations has picked up dramatically as airlines switch to the smaller aircraft to economize. FT reports the number of RJs delivered in 2000 came to 105. A year later, RJ deliveries jumped to 165. In 2002, the company sold 191.

FMI: www.aerospace.bombardier.com