Regional Jet Just Isn't Selling Much These Days

Their press release says they're just aligning their production rate with current market demand, but what that means is that Bombardier is laying off about 20% of its workforce.
 

The Montreal, Canada-based builder of mostly-medium sized jets and turboprop aircraft, says there's just not that much demand for regional airliners these days in the 70 to 90 passenger capacity size -- the CRJ700 and 900 series -- and that had been Bombardier's bread and butter, lately.  

The plane maker says that the total number of planes sold this year will remain about the same -- just the product mix will be different -- and small planes don't have as much profit margin as bigger ones.

"We must be prudent and manage proactively our CRJ700/900 jets production schedule in the short term to ensure we achieve our goal of increased profitability and our success in the long term," says President and CEO, Pierre Beadoin.

A total of 1,330 people will be let go from the Montreal plant and Bombardier's other regional jet parts facility in Belfast, Northern Ireland.

The company promises to include a fairly generous severance package saying it will spend about $31 million US.

All this comes during a machinist's strike at Bombardier's facility in Wichita, KS, where voting to accept a new contract is expected next week. None of the striking machinists are expected to be affected by this round of cuts.

If there's any bright news at all, it is that demand for Bombardier's Q-series family of short-haul turboprops is increasing and Bombardier is ramping up production for the smaller plane as it winds down production on its regional jet.

FMI: www.bombardier.com