Wed, Oct 25, 2006
Regional Jet Just Isn't Selling Much These Days
Their press release says they're just aligning their production
rate with current market demand, but what that means is that
Bombardier is laying off about 20% of its workforce.
The Montreal, Canada-based builder of mostly-medium sized jets
and turboprop aircraft, says there's just not that much demand for
regional airliners these days in the 70 to 90 passenger capacity
size -- the CRJ700 and 900 series -- and that had been Bombardier's
bread and butter, lately.
The plane maker says that the total number of planes sold this
year will remain about the same -- just the product mix will be
different -- and small planes don't have as much profit margin
as bigger ones.
"We must be prudent and manage proactively our CRJ700/900 jets
production schedule in the short term to ensure we achieve our goal
of increased profitability and our success in the long term," says
President and CEO, Pierre Beadoin.
A total of 1,330 people will be let
go from the Montreal plant and Bombardier's other regional jet
parts facility in Belfast, Northern Ireland.
The company promises to include a fairly generous severance
package saying it will spend about $31 million US.
All this comes during a machinist's strike at Bombardier's
facility in Wichita, KS, where voting to accept a new contract is
expected next week. None of the striking machinists are expected to
be affected by this round of cuts.
If there's any bright news at all, it is that demand for
Bombardier's Q-series family of short-haul turboprops is increasing
and Bombardier is ramping up production for the smaller plane as it
winds down production on its regional jet.
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