RJ builders react with more layoffs

 - October 4, 2007, 9:22 AM

Brazil’s Embraer said it will lay off 1,800 workers, reduce deliveries this year from 185 to 160 and lower its forecast delivery rate from 205 to 135 next year as part of a plan to stem losses expected to result from  September 11. Although the company said all firm orders remain in effect, it expects a number of customers to defer option conversions until the global economic outlook improves. The layoffs affect 14 percent of Embraer’s workforce and will cost the company $15 million. Despite the measures, Embraer plans to continue investing in customer- support infrastructure and the new Gaviao Peixoto plant construction project. It will also continue development of the new ERJ-170 regional jet, rollout of which took place on October 29.

Meanwhile, Canada’s Bombardier announced plans to lay off 3,800 of some 38,000 employees in its aerospace division, including 350 more workers at its de Havilland plant in Toronto and 2,005 at its facility in Montreal. The cuts follow an earlier purge in Toronto that cost 450 workers their jobs in September. Although the number of firm orders remains unchanged, Bombardier has cut its delivery target for 44- and 50-seat CRJs from 135 to 120 this year, and from 165 to 140 next year. The company also adjusted this fiscal year’s Dash 8 delivery target from 52 to 48 airplanes, and plans to reduce production again next year to 36. As a result of the negative outlook for turboprops, Bombardier posted a special third-quarter charge of $264 million related to development costs of the new 78-seat Dash 8Q-400.