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Bombardier optimistic about avoiding further layoffs

May 21, 2010, Montreal - Bombardier is working on plans that it hopes will allow it to avoid cutting production of its regional jets in Montreal and laying off more workers, aerospace division president Guy Hachey said Thursday.


May 21, 2010
By The Canadian Press

"It's going in the right direction and we have a few other opportunities on which we are working very hard,'' he told reporters.

Hachey said a decision on layoffs, if any, could come within a few weeks.

In April, he warned that a decision to cut production rates for regional jets assembled in the Montreal area could be made within a couple of months.

The world's third-largest aircraft manufacturer expects
deliveries of the popular planes will fall 20 per cent this year.

Since early 2009, Bombardier has cut at least 4,700 workers around the world, half in the Montreal area. That includes about 600 laid off earlier this year.

It recently won an order from Pluna Lineas Aereas Uruguayas S.A. for three CRJ900 NextGen regional planes. The company also took options on six more of the aircraft, which have a list price of US$120 million.

But that's not enough to alter Bombardier's production decision, Hachey said.

"We have to certainly win other campaigns.''

Work is also continuing on winning orders for its new CSeries aircraft, although no announcements are expected for several weeks or months, he added.

Despite the continuing challenges of the commercial aerospace market, Hachey said Bombardier is poised to take advantage of the economic recovery by focusing on innovation.

"Bombardier Aerospace is ready for the economic recovery. We have many projects in mind. We have a reasonably healthy backlog,'' he said in a speech to the Montreal Board of Trade.

The company is continuing the development of its new composite Learjet 85 business jet and its CSeries and CRJ1000 commercial offerings. The first two planes are slated to enter service in 2013.

With its hands full these days, Bombardier isn't rushing into developing a new aircraft to counter the Gulfstream 650, which recently became the world's fastest civil aircraft.

"We're obviously watching them very closely,'' Hachey said. "We have some ideas about what we'll do in the marketplace but our plate is very full right now with the projects we have.''

Industry analysts believe Gulfstream, a division of General Dynamics (NYSE:GD), could have a five-year head start on Bombardier in bringing its large US$59-million business jet to market.

Bombardier faced a 25 per cent decrease in business jet deliveries last year. But in the first quarter, it had the best performance of any manufacturer and grew its leading market share to 40 per cent.

Hachey said Bombardier's goal is to remain the world's largest manufacturer of business jets and third-biggest overall.

One of the challenges will be to do a better job foreseeing the financial risk of its customers and suppliers.

"We probably could have done a bit better in managing all the risk with our customers and understanding a bit better the stability of our backlog,'' he said.

Bombardier lost orders for some planes when it terminated an order from Italy's MyAir.com for 15 CRJ1000 over its uncertain situation, and U.S.-based Mesa Air Group obtained bankruptcy protection, threatening an order for 10 regional jets.