PRESIDENT & Chief Executive Officer Paul Tellier announced a reduction of 6600 jobs in rail manufacturing on March 17 after Bombardier Transportation recorded ’disappointing financial results’ in the last quarter of the year to January 31 2004.
The cuts will be achieved by closing seven production sites in five countries over the next two years, although 37% of the posts to go are described as ’white collar’. Currently Bombardier Transportation has 35 production sites, which Tellier said is ’significantly more than its main competitors.’ Excess capacity is ’most acute’ in Europe, where 86% of the workforce reduction will occur.
Sites to close this year are Amadora in Portugal, and Doncaster and Derby Pride Park in the UK, although the rolling stock plant at Derby Litchurch Lane will remain. In 2005, Pratteln in Switzerland, Ammendorf in Germany, Kalmar in Sweden and Wakefield in the UK will close. Bombardier says none of the seven plants up for closure ’has work scheduled after 2005’.
Five rail sites will take part in the first phase of a global programme to improve their performance: Crespin in France, Aachen and Siegen in Germany, Brugge in Belgium and Crewe in the UK. Bombardier intends to rationalise its procurement processes by reducing the number of suppliers, increasing the standardisation of parts and centralising negotiations to achieve economies of scale.
H Bombardier and Alstom have settled their long-running legal dispute with Amtrak over performance of the Acela Express trainsets and HHP8 locos. Amtrak will pay $42·5m of the $1·2bn it had withheld, and take over responsibility for maintenance of the trains in October 2006 instead of 2013.