Up to 1,080 jobs to go at Bombardier’s Belfast operation

Bombardier Aerospace is to cut more than 1,000 jobs in Northern Ireland.

The Canadian group has outlined its intention to reduce its workforce by 580 this year and a further potential 500 jobs next year.

In a statement the company said it had “reviewed” its requirements in Belfast and said while it deeply regretted the impact its decision would on its workforce and their families it was crucial for it to “right size” its business in line with “market realities”.

‘Hammer blow’

The Unite trade union said the decsion “is a “hammer blow” to Northern Ireland. Davy Thompson, Unite’s regional co-ordinating officer, said while the union understood the redundancies were a response to Bombardier’s current trading difficulties it was shocked by the scale of the proposed job losses.

Last year Bombardier Belfast repeatedly warned that it was “vital” it reduced costs in the North to “protect jobs in the long term”.

It had tabled cost cutting proposals to its 5,500 strong workforce which after protracted discussions were rejected in a December ballot organised by Unite.

Mr Thompson said he did not believe the 1,080 proposed job losses in Belfast had anything to do with the rejection of the pay deal which he believes are directly related to “severe market conditions”.

Bombardier’s latest financial results for the fourth quarter and the year ended December 2015 released on Wednesday show its total revenue fell from $20.1 billion in 2014 to $18.2 billion last year while net losses settled at $5.34 billion.

The Canadian aerospace giant had endured a turbulent 12 months as it continued to battle ongoing issues with its new generation aircraft programme – the C Series – which is behind schedule and over-budget by an estimated $2 billion.

Last year the Quebec Government agreed a $1.3 billion investment in the C Series programme in return for a stake in a new limited partnership while Bombardier has also asked Ottawa to financially support the C Series.

Financial support

The North's enterprise minister Jonathan Bell said the company has also received substantial financial support from Northern Ireland in recent years.

“Between 2002 and 2015, Invest NI offered £75 million of assistance to Bombardier, including £21 million for the C Series, in support of investment commitments totalling £844.5 million,” Mr Bell stated in Belfast.

But in Montreal at the presentation of the year end results there was no reference by Alain Bellemare, president and chief executive officer of Bombardier, to this support.

Instead he announced 2016 would be a year of transition for the group which would involve “steps to optimise its workforce” resulting in 7,000 global job losses, close to 10 per cent of its workforce.

Mr Bellemare said the redundancies, the majority of which are Canada and Europe, would begin in the coming weeks and be implemented over the next two years.

Bombardier Belfast said as a result it had reviewed its requirements in the North and would have to “adjust” its workforce by around 580 people this year and by a potential 500 next year – nearly 20 per cent of its local workforce.

Redundancy risk

The company said: “Around 200 Bombardier employee jobs in Northern Ireland are currently at risk of redundancy. The company will be lodging a formal HR1 redundancy notice with the Department for Employment and Learning, following which there will be a 90-day consultation period when we will explore opportunities to mitigate the number of compulsory redundancies.

“In addition, around 380 members of our complementary labour force [temporary workers] and other agency workers are being released from their assignments with the company in 2016. This includes 60 [ temporary workers] who already left the company in January.”

The large scale projected job losses have alarmed political leaders in the North who were already highly concerned about how Northern Ireland will absorb the 1,800 job losses in the pipeline for Ballymena with the planned closure of both JTI Gallagher and Michelin plants in the town by 2018.

The First Minister Arlene Foster and deputy First Minister Martin McGuinness described the latest Bombardier job losses as a “devastating development”.

“While the company has made it clear their decision is as a result of inescapable global economic factors, the impact is very real for those affected, and for the wider economy,” the Ministers said.

‘

Very upsetting’

Chief executive of Invest Northern Ireland Alastair Hamilton said he was disappointed at the decision, which was a greater reduction than expected.

“Today’s news will be very upsetting to those working for the company, and their families,” he said, adding that the agency would work closely with the Department for Employment and Learning to support those affected by the job cuts.

“We have listened to the company’s reasoning for this difficult decision and, while it is hard to hear, we understand why it has had to make this choice.”

The job cuts are part of a plan to reduce its workforce by about 7,000 over the next two years, while ramping up hiring to support production of its CSeries commercial jets.

The company said it had signed a letter of intent with Air Canada for up to 75 CS300 aircraft for as much as $3.8 billion, based on the list price.

Mr Hamilton said this was a positive development. "I have every confidence that its commitment to the CSeries project will see the company's presence in Belfast rebuild for the future," he said.

Bombardier, which also forecast lower revenue for 2016, broke even in the fourth quarter on an adjusted per share basis.

The company said it expected 2016 revenue of $16.5 billion-$17.5 billion, lower than the reported revenue of $18.17 billion in 2015.

Bombardier, which was helped by recent cash infusions from a major Quebec pension fund and the Quebec provincial government, said it expected free cash flow usage in the range of $1.0 billion-$1.3 billion this year.

The Montreal-based company’s net loss narrowed to 31 cents per share in the fourth quarter ended Dec. 31 from 92 cents per share a year earlier.