More layoffs possible at Bombardier: analyst
Last Updated: Thursday, October 22, 2009 | 3:04 PM ET
The Canadian Press
An aircraft flies over the Bombardier plant in Montreal. (Paul Chiasson/Canadian Press) Bombardier may be forced to cut business jet production and jobs next year because of a slow intake of new orders, an industry analyst said Thursday.
While it's too early to predict next year's production rates, the Montreal-based manufacturer told a business aircraft show in Florida that it's becoming increasingly more difficult to get orders to fill production gaps.
"Hence, we believe the risk of production cuts next year, remains," Fadi Chamoun of UBS wrote in a report.
He expects deliveries will drop by 30 per cent this year to 165, followed by another 14 per cent decline in 2010 to 142 planes, primarily in the small- and mid-size Learjet and Challengers.
Bombardier is in the process of laying off 4,360 employees as it reduces production of business and commercial aircraft. Regional jets, which are sold to airlines, are estimated to account for 1,200 of the layoffs.
Manufacturers attending the conference said order cancellations and prices have stabilized.
But new orders remain weak and an industry-wide recovery will only gradually begin in late 2011 or early 2012.
Europe and Asia are expected to be the first regions to recover.
The North American market remains the weakest and will take longest to recover, Chamoun noted.
North America's share of future deliveries is expected to be below 50 per cent, compared to the historic level of 70 per cent.
Chamoun said he believes Bombardier is in advanced stages of developing a new large Global Express business aircraft that would challenge Gulfstream's G650.
Steve Ridolfi, president of Bombardier Business Aircraft, also said the company is planning on a corporate version of its CSeries 100- to 149-seat commercial airplane.
"Absolutely, there will be a corporate variant of the CSeries," he told an analysts' briefing this week.
Bombardier's shares were down six cents at $4.70 in midday trading Thursday on the Toronto Stock Exchange.
