Profits Down, Layoffs Coming

It's not so much that Bombardier sales slumped in the third quarter -- they fell off a cliff. With 93-percent lower sales, higher costs and a bleak outlook for its aviation division, Expect as many as 2,000 aviation layoffs in the near future and perhaps more in the company's rail business.

The numbers don't lie. On the whole, Bombardier profits sank from $133 million in the third quarter of last year to just $10 million in the third quarter of this year. The company's credit rating has dropped through the floor -- now ranked at non-investment grade.

Aside from the 2,000 layoffs CEO Paul Tellier announced two months ago, the company will now hand pink slips to 7,600 -- 21-percent -- in the company's train division.

In Bombardier's aviation division, the sale of regional aircraft fell 31-percent.

If there's a bright spot on this bleak picture, it's Bombardier's biz jet business. Demand for corporate jets is up. Tellier has virtually doubled Bombardier's biz jet sales and deliveries are up 74-percent.

But Tellier said that won't carry the company. Business jet revenue constitutes about 11-percent of the company's total income stream.

"The storm is not over, but we are doing everything possible under our control and adjusting to what we do not control," he said in a conference call with journalists.

FMI: www.bombardier.com