BRIAN DUNN / MONTREAL AND PAUL LEWIS / WASHINGTON DC
The aerospace industry continues to reverberate from the slump in airline traffic, with the massive loss of jobs now filtering down to the once buoyant regional manufacturer and partner supplier level.
Bombardier has unveiled plans to lay off 3,800 workers before the end of the year, representing 10% of the division's workforce. This includes 2,000 in Montreal, 650 in Toronto, 635 in Wichita, USA, and 480 in Belfast, UK. The company warns that unless there is a clear sign of a recovery, it will be forced to cut another 2,700 jobs by early next year.
According to Bombardier chief executive Robert Brown, the job cuts decision was based on discussions with customers, their cash flow problems and airlines' plans to reduce capacity by a combined 20% in the USA. He says some customers have also asked for delivery delays. Due to the economic woes, production of the CRJ200 is being scaled back to 120 this year and 140 next year, compared with the 135 originally planned for this year, 165 in 2002 and 174 the following year.
Deliveries of 370 business and CRJ aircraft, split almost equally, this year is the same as last year, but down on the planned 410 aircraft. Production of the CL-415 water bomber is being suspended. Some workers will be transferred from Dorval to Mirabel to boost production of the new CRJ700.
Attention is also focused on its chief rival Embraer, which is also heavily dependent on US regional airlines. Before 11 September, the company had moved to curtail expansion and was hoping to firm up a number of major deals this year to offset poor first half sales. At least one prospective customer, Midwest Express, is indicating it will hold off a deal for 20 ERJ-140s.
Analysts have been revising downward projected deliveries of 180 and 200 ERJ-135/140/145 jets in 2001 and 2002, with Bear Sterns Weaver now looking at 166 and 127 respectively, and Merrill Lynch 170 in both years. While the company has not yet signalled any job cuts or order cancellations, it share price has fallen 45% since 10 September. Other cuts include:
Pratt & Whitney Canada is laying off 600 workers or 6.6% of its workforce in response to an expected slowdown. Production is being cut 10-15%. Honeywell has announced it will be forced to close 51 facilities and lay off 16,000 employees, including some 5,000 from its aerospace division. The company expects to lose $150 million in aerospace sales as a direct result of the 11 September attack, with sales for the third quarter already down by 3% compared with 2000. Rockwell Collins will cut 2,600 jobs, 15% of its workforce, over the course of the next financial year. Goodrich will lay off 450 employees or 25% of its workforce at Boeing's Everett plant.Source: Flight International
