Global 5000/6000 Output Cut To Affect 1,750 Workers

 - May 14, 2015, 12:07 PM

Approximately 1,750 Bombardier Aerospace employees–up to 1,000 in Montreal, 480 in Toronto and 280 in Belfast–will be “progressively impacted” by the company’s May 14 announcement that it will reduce Global 5000 and 6000 production rates. The move is prompted by short-term “economic conditions and geopolitical issues in some market regions, such as Latin America, China and Russia, [that] have affected order intake levels,” it said. Long lead times for aircraft outfitting mean that the “adjustment” won’t affect delivery rates this year.

Workforce reductions will begin this month at Bombardier’s aerostructures and engineering services unit, which makes the Global subassemblies, and continue progressively to the final assembly line from September through the first quarter of next year, a spokesman told AIN. Bombardier will attempt to find other open positions within the company for displaced workers, he added.

While Bombardier would not disclose what the adjusted annual Global production rate will be, aviation analyst Rollie Vincent told AIN that he predicts it will drop from the current 80 per year to approximately 55 next year. This would be in line with levels in 2012, when the company delivered 54 Globals. Vincent expects production cuts to be weighted toward the Global 5000.

The move would roll back a more than 50-percent increase in Global production over the past three years, which Vincent alleged was “an attempt to monetize the Global backlog” as the struggling CSeries and now-shelved Learjet 85 programs consumed cash.

Meanwhile, the in-development Global 7000 and 8000, which newly appointed Bombardier president and CEO Alain Bellemare said have a “very strong” order book, appear to be delayed, supporting speculation that the CSeries and Learjet 85 developmental challenges have had a knock-on effect. Asked if the two models are on track for entry into service (EIS) in 2016 and 2017, he answered, “We are not commenting on Global 7000 and 8000 EIS at this time.”

While the rear, center and forward fuselage sections and the wing of the first flight-test Global 7000 were recently joined, Vincent is skeptical that the airplane will fly before year-end. He is now forecasting a two-year delay for the new Global models, which would push EIS into 2018 and 2019.