Bombardier to shed Belfast in revamp, shares slide on forecast fears

Business


MONTREAL/BELFAST (Reuters) – Bombardier put its Belfast wing-making factory on the block as part of a wider shake-up, while the plane and train maker’s failure to commit to meeting its 2020 goals knocked as much as 10 percent off its shares.

FILE PHOTO: Logo of Bombardier is seen at an office building in Zurich, Switzerland February 28, 2019. REUTERS/Arnd Wiegmann

The Canadian company said on Thursday it would unite its corporate and regional jet units, while selling off two aerostructures operations, including the Belfast plant, which is the largest high-tech manufacturer in Northern Ireland.

Bombardier’s retreat from Belfast comes at a sensitive time for the British government, which is struggling to agree a deal to leave the European Union, in large part because of disagreements over the future of the Irish border.

The plant and its 3,600 workers are also important constituency for Northern Ireland’s largest unionist party, the Democratic Unionist Party, which is propping up Prime Minister Theresa May’s minority government.

Stunned workers at the factory, which is just yards away from the shipyard that built the Titanic, urged the British government to ensure jobs were retained.

“It’s a shock to the system given what we have all been through. It’s taken a toll,” said Noel Gibson, a sheetmetal worker who has worked at the plant for 29 years.

The plant escaped major job losses last year here when Bombardier won a trade victory against U.S. planemaker Boeing in a dispute that had threatened to slap a 300 percent duty on sales of jets for which the plant supplies wings.

The company’s chief executive Alain Bellemare called the steps, which include the sale of a separate facility which produces aeronautical equipment in Morocco, “a strategic move”.

Bombardier is shedding its commercial aviation businesses to focus on more profitable corporate jets and passenger rail cars.

AIRBUS WINGS

Bellemare said the company will be working with Europe’s Airbus SE to find a buyer for the wing-making facility, which produces wings for the A220 narrowbody jet.

Industry analysts say the Belfast plant pioneered a leap forward in carbon-fiber wings technology that may be attractive to Airbus for its next generation of planes.

AltaCorp analyst Chris Murray said Airbus, along with other large aerostructures companies like Spirit Aerosystems would be logical contenders.

Airbus declined to say whether it was interested in buying the plant but described it as a “key supplier”.

A spokesman for Britain’s May said while disappointing and unsettling for workers, Bombardier’s Belfast business has a healthy long-term order book.

Bombardier bought the plant from Short Brothers, the world’s oldest planemaker, in 1989. It has been a pillar of Belfast’s economy for decades and given many locals apprenticeships.

It is of particular significance to the mainly Protestant unionist community who long provided the majority of workers in Shorts and the nearby Harland & Wolff shipyards.

Bombardier’s announcement came before an annual general meeting where it is expected to face questions from investors on whether its turnaround plan is still on track as its transportation unit grapples with delayed rail contracts.

Its chief financial officer would not commit to previously-announced objectives for 2020, such as growing revenues to $20 billion, and would review the targets only later in the year.

Investors were already rattled when Bombardier cut its first-quarter and full-year revenue targets for the transportation division, its largest unit, raising concerns over whether it will still meet its 2020 targets of boosting margins and generating $20 billion in revenue.

The company said in a statement it was making progress toward completing five long-term rail projects that have been marred in some cases by delivery delays and production problems, but these would take a few more quarters for completion.

The rail division, which is expected to generate $10 billion next year, is crucial to Bombardier’s five-year turnaround plan, after heavy investment in aircraft production drove it to the brink of bankruptcy in 2015.

Besides creating a single aviation division headed by business aircraft president, David Coleal, the company said it will consolidate its five aerostructures businesses to focus on facilities in Montreal, Mexico and its newly acquired Global 7500 business jet wing operations in Texas.

Reporting By Allison Lampert in Montreal and Amanda Ferguson in Belfast. Additional reporting by Arathy Nair in Bengaluru, Fergal Smith in Toronto and Tim Hepher in Paris; Writing by Emelia Sithole-Matarise; Editing by Alexander Smith



Source link

Products You May Like

Articles You May Like

Membrane in a minute: Singapore scientists produce in-vitro human skin
Lavrov’s Sensational Statement: Nikol Pashinyan is Right
ARMBUSINESSBANK opened the third branch in Lori
China completes lander test for first Mars mission in 2020
China completes crucial landing test for first Mars mission in 2020

Leave a Reply

Your email address will not be published. Required fields are marked *