Bombardier to lay off 2,500 workers as demand for business jets drops amid pandemic

Bombardier will lay off 2,500 workers as the company struggles to keep its operations afloat amid dwindling demand for business jetsduringthe COVID-19 pandemic.

In a release Friday morning, theQuebec-based transportation company said the aerospace industry as a whole isexpecting to see a 30 per cent year-over-year loss in business jet sales, forcing it to reduce its workforce.

The company said 1,500 of the permanent jobcutswill bein its Quebec facilities and 400 in Ontario, with the rest of the layoffs in its international facilities. The layoffs will begin this month and be carried out throughout the year.

The layoffs come just days after Bombardier made its official exit from the commercial airplane industry, selling off itsCRJ regional jet program to Mitsubishi Heavy Industries Ltd. for $550 million US on Monday.

The company hasrecentlystaked its future on business jets, sales of which have dropped during the COVID-19-related recession and the subsequent decline in travel.

"Our sales books are still quite full in the long term, but we still had to adjust to the reality we're going to be facing from now until the end of the year," Bombardier spokesperson Mark Masluchsaid in an interview.

"That said, in our collective agreement and in the way we work, there is always the opportunity to call back our workforce if there's a rebound in the market."

Masluch insisted that the layoffs were strictly the result of COVID-19.

Bombardierpaused all operations in Marchin an effort to protect employees from the spread of the novel coronavirus.

It gradually resumed operations again last month, but had already reported a loss of$200 million US in its first quarter.

Union disappointed by decision

The International Association of Machinists and Aerospace Workers, the union that represents Bombardier workers, said it was disappointed by the company's decision.

In Montreal, 717 Bombardier employeesbenefited from the Canada emergency wage subsidy (CEWS) program, but that help was set to expire today.

Last month, the union asked that Bombardier reapply to the CEWS program but, judging by the layoffs, the union does not believe that request was ever put in.

"I don't know exactly what motivated these decisions," said David Chartrand, co-ordinator for the union's Quebec branch.

Chartrand said the federal government is also to blame. He said it has beenabsent in supporting the aerospace industry as a whole.

"We need help from the government to support these industries, but they've been completely inactive," he said.

Quebec looks to help

Quebec Finance Minister Eric Girardsaid Bombardier remains an important economic driver and the provincial government "will help them to go through this difficult period."

"If they need help, I am convinced that the minister of economy will be there to attach the right conditions to this help just like we did for the Cirque du Soleil," he said, referring to a loan recently handed out to the struggling Montreal-based entertainmentgiant.

Prime Minister Justin Trudeau said the federal government will continue to support workers of all industries as they struggle during the pandemic.

"Obviously, the aerospace industry, airlines, are particularly affected with the ceasing of global travel and with the fact that the demand for purchasing business jets has decreased dramatically," said Trudeau.

"We will work with industries and individual companies to try and ensure they have access to all the supports that we've put forward."

Trudeau questioned about Bombardier's cuts to its workforce

4 years ago

Duration 0:39

Prime Minister Justin Trudeau spoke with reporters on Friday.

History of government bailouts

Bombardier, which was in trouble long before the startof the pandemic, has been bailed out before.

In 2015, then-premier Philippe Couillard agreed to provide Bombardierwith a $1.32-billion bailout, in hopes of saving jobs in the province.

In return, the province would gain a 49.5 per cent stake in the company's C-series program, later referred to as the A220. The governmentmade a 20-year commitmentto the project.

The same year,just as Trudeau was first sworn in as prime minister, Bombardier called on the federal government to match the $1-billion investment.

Although the Canadian government did not agree to those terms, it didprovide the company with$372.5 million in interest-free loans in 2017.

Despite all that, Bombardier sold its remainingA220staketo Airbuslast February, in an effort to pay off a multibillion-dollar debt.

That same month, the company soldits rail-building unit to French train giant Alstom SA, marking its exit from the rail business.

In February, Quebec PremierFranois Legaultinsisted the province was done injecting money into the 83-year-old company.

But on Friday, he said the province could provide some financial relief for Bombardier, though it would need guarantees that jobs would be protected and that limits would be imposed on executive salaries and bonuses.

"If we must invest, we mustnot make this error again," he said.

As of Friday, Bombardier has8,200 employees inQuebecand2,100 in Ontario.