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Thu, Aug 30, 2007

Bombardier Boosts Production, Cancels Scheduled Layoffs

Order Backlog Increased, Callbacks Possible

What a difference 10 months can make. Bombardier Aerospace announced plans Wednesday to shave a day off the length of time it takes to produce a CRJ-700 and CRJ-900 jet -- from five days to four -- to meet the demand of its backlog. To accomplish this, the plane maker will cancel the employee layoffs it announced last October.

The company planned to eliminate 1,330 positions in Northern Ireland and Quebec factories, according to Bloomberg. It will now retain 456 of those and possibly recall about 100 more, according to spokesperson Marc Duchesne. The company had already completed 874 layoffs.

"Today we are talking more about stability in our organization and we'll see in some cases if we will recall some employees," Aerospace President Pierre Beaudoin said.

The company said its backlog had swelled 38 percent since the beginning of the fiscal year to a record $18.2 billion, according to the United Press International, although it also posted a $71 million second quarter loss Wednesday.

"What's driving aerospace is the selling price of business jets and the rebound of regional jets," Chief Executive Officer Laurent Beaudoin said.

The loss was due to a write-off of its 20 percent stake in the collapsed Metronet consortium, the organization responsible for maintaining an operating London's underground train network.

As ANN reported, the Federal Aviation Administration and Canada's Transportation Safety Board placed operating restrictions this week on older Bombardier (nee Canadair) CRJ-100, -200, and -440 aircraft. Those types are in operation with several North American commuter airlines, according to the Wall Street Journal.

Citing the WSJ report, Reuters says regulators made their decision following several reports of stuck flaps on the cited aircraft. Those situations have led to several no-flap landings. No fatal accidents related to the apparent defect have been reported.

There are 684 affected aircraft registered in the US.

The company doesn't expect the new regulations to have a "material" impact on its finances or on the operations of its clients, Beaudoin said.

The company is currently working on fixing the issue. As the problem is related to cold-weather flying, he said, a complete redesign is being developed and certification will be sought for early winter.

FMI: www.bombardier.com

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