Canada’s Bombardier to cut 2,500 aviation jobs

Canadian plane and train maker Bombardier said on Friday it would cut 2,500 jobs, or about 11% of the workforce at its aviation unit, as the coronavirus pandemic’s crushing impact on the air industry adds to its long list of problems.

The aviation industry has been among the worst hit by the pandemic, which has dented travel demand and forced several aircraft manufacturers, including planemakers Boeing Co and Airbus SE, to cut production as customers defer deliveries.

“We are now faced with the difficult decision to adjust the size of our business, considering both disruptions in our supply chain as well as industry-wide forecasts calling for approximately 30% year-over-year drops in unit deliveries due to the pandemic,” David Coleal, president of Bombardier Aviation, said in a memo to workers about the layoffs which was seen by Reuters.

Bombardier Aviation spokesman Mark Masluch said the company is starting to scale back production, but he would not give specifics.

Bombardier, which has nearly 60,000 employees at its aviation and rail units, said it would book a $40 million charge related to the job cuts.

The company, which recently exited the commercial aircraft business, is in the process of selling its rail business to French train maker Alstom for up to 6.2 billion euros ($7.02 billion).

The sale would leave Bombardier as a “pure play” business jetmaker.

The International Association of Machinists and Aerospace Workers said the layoffs would affect 717 of its members in Montreal who are now benefiting from an emergency wage subsidy programme implemented by the Canadian government to counter the fallout from the outbreak of COVID-19, the respiratory illness caused by the novel coronavirus.

The union said in a statement that “Bombardier had the means to avoid the layoffs today,” if it extended the programme, which runs through the end of August.

Masluch said the company needed to act now to give required notice about the layoffs.

Meanwhile, Canadian employment rose by 290,000 or 1.8 per cent in May, the government statistical agency said on Friday, as restrictions to slow the spread of the coronavirus were eased and businesses started reopening.

But the jobless rate rose 0.7 per cent to a record 13.7 per cent as more Canadians looked for work, said Statistics Canada.

The figure is more than double the unemployment rate prior to the COVID-19 economic shutdown.

The three million jobs lost from February to April, however, were mostly temporary layoffs, and those newly unemployed Canadians expected to return to their jobs within six months, according to the government agency.

In May, as restrictions gradually began to ease in various parts of the country, employment rebounded more strongly in the goods-producing sector (+165,000) than in the services-producing sector (+125,000).

About 4.9 million Canadians continued working from home.

Statistics Canada warned that the gradual easing of COVID-19 restrictions and reopening of the economy presented both opportunities and challenges.

“For employers, this includes adapting workplaces while adjusting to disruptions in global supply chains and uncertainties in consumer demand,” it said.

“For workers, the challenges vary, from returning to a previous employer, to looking for a new job, adapting to new ways of working, or making child care arrangements.”

The data showed Quebec province -- the hardest-hit in Canada by the pandemic -- accounted for 80 per cent of the new jobs.

Ontario, the second-hardest-hit and the nation’s economic hub, meanwhile, continued to shed jobs. Separately, British luxury carmaker Bentley Motors said on Friday it plans to shed up to 1,000 jobs, nearly a quarter of its workforce, adding to the gloom in the sector hit hard by the coronavirus pandemic.

The redundancies at the Volkswagen-owned Bentley brand follow cuts, totalling up to 2,000 jobs, announced on Thursday at luxury rival Aston Martin and at car dealership Lookers.

The 100-year old Bentley, which has a total workforce of 4,200, said it was offering voluntary redundancy terms but could not rule out compulsory redundancies.

“This is a necessary step that we have to take to safeguard the jobs of the vast majority who will remain, and deliver a sustainable business model for the future,” said chairman and chief executive Adrian Hallmark.

Agencies