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Bombardier cuts 715 aerospace jobs

 

Last Updated: Thursday, November 26, 2009 | 9:21 AM ET

 

Bombardier Aerospace is laying off 715 workers in its Montreal-area facilities because of slow orders for its regional CRJ aircraft.

 

The aerospace manufacturer announced the layoffs in a statement issued Thursday morning.

 

"There are not enough projected CRJ aircraft sales to maintain the current production plans," said Guy C. Hachey, Bombardier Aerospace president and chief operating officer.

 

"Although we are in discussions with several airlines, we had to finalize our aircraft delivery schedule for the next fiscal year.

 

"We fully recognize the impact this additional workforce reduction will have on our affected workers and their families."

 

Orders for the CRJ aircraft have dwindled in the last year because of the depressed global economy, Hachey said.

 

The 715 employees will remain on payroll until at least January 2010, when the job cuts will start to take effect.

 

Bombardier Aerospace has announced more than 4,000 layoffs worldwide this fiscal year.

 

The company still harbours hope that it will be able to sell its efficient C-Series aircraft to more airline clients.

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The outcome of Bombardier Inc.’s high-stakes gamble on building bigger planes may well be determined in a field outside of London this week at the Farnborough Air Show.

 

It was at the same show two years ago that Bombardier officially launched its new CSeries family of aircraft — its largest to date. At the time, the Montreal manufacturer only had a letter of intent from Lufthansa, and hopes that a flurry of orders would follow, for its new 110- to 145-seat aircraft. Few would have guessed at the time how difficult that would prove after the economy collapsed, airline profits plunged and plane orders dried up.

 

While the Lufthansa order was finally firmed up eight months later, only two other orders have followed: one from Ireland’s Lease Corporation International last year and another from Republic Airways Holdings Inc. in February. Bombardier’s order tally sits at just 90 aircraft two years after its launch.

 

Management has maintained the state of the economy is behind the somewhat tepid response to the plane. But with the world’s largest air show returning to England this week, expectations are high that Bombardier may finally be able to put some rubber to the tarmac on its CSeries as passenger traffic and new aircraft orders pick up.

 

Last month Airbus SAS, for example, racked up US$15.3-billion in aircraft orders at the Berlin Air Show. Meanwhile, Boeing said in June, for the second time in as many months, that it would ramp up production of its popular 737 single-aisle aircraft in order to deal with its growing backlog.

 

More important, the health of airlines is improving. The International Air Transport Association has said it expects global airlines to turn in a collective profit of US$2.5-billion in 2010, a dramatic turnaround from the US$9.9-billion lost last year.

 

“In a lot of ways, this is [bombardier’s] show to lose,” said Richard Aboulafia, an industry analyst with the Teal Group in Fairfax, Va.

 

“They no longer have the bad market as an excuse. It looks like traffic numbers are coming roaring back. There’s lots of order activity out there, and they are really well placed for a market uptick. It’s a twist on New York, New York — if they can’t make it here, they can’t make it anywhere,” he said.

 

Benjamin Boehm, Bombardier vice-president of commercial aircraft programs, said the manufacturer is in advanced discussions with 60 to 70 potential CSeries customers, and that many are getting closer to making a decision.

 

“The airlines have seen the bottom, they’ve stabilized and now they’re starting to look ahead,” he said. “The phone has been ringing off the hook.”

 

There is plenty of reason to expect Bombardier may be able to bank at least one significant order during the air show. Carriers such as EasyJet PLC and Qatar Airways have expressed interest in the plane. Meanwhile, there is speculation a Chinese carrier might place an order for the plane at the show after Bombardier struck a $3.85-billion financing deal in the country with CDB Leasing Co. Ltd. earlier this year for the purchase of its planes.

 

Bombardier maintains it can capture roughly half of the anticipated 6,300 aircraft expected to be ordered over the next two decades in the 100- to 149-seat segment, as aging fleets of MD-80s and DC-9s are replaced and as the CSeries opens up new markets for its customers.

 

While most analysts have put that figure more realistically between a quarter and a third, Bombardier hopes the plane will eventually add between $5-billion and $8-billion in annual sales — a lofty goal for a company that reported $19.4-billion in revenue last year for both its plane and train divisions.

 

When Bombardier launched the CSeries in July 2008, it promised the aircraft would be a “game changer,” and in many ways it has proven to be just that.

 

The aircraft is expected to enter service in 2013. It is smaller than the planes built by Boeing and Airbus, but larger than the regional jets built by Embraer, its main competitor in that category.

 

While orders have been sparse, reaction to the plane from Bombardier’s rivals has been swift.

 

The 15% greater fuel efficiency and 20% cost savings the CSeries promises over similar-sized aircraft has not only forced Embraer to step up its plans to build a larger plane, but both Boeing and Airbus are being pushed to make their smaller single-aisle aircraft more competitive.

 

Boeing and Airbus have said they are weighing whether to put a new, more fuel-efficient engine in their 737 and A320 models, or wait until they can bring an all-new aircraft to market sometime in the next decade. The first option is less costly and would likely see a more competitive aircraft, with roughly 15% greater fuel-efficiency, on the market as early as 2015, Airbus has said.

 

Jim McNerney, Boeing chief executive, has said if Boeing cannot get an all-new aircraft to market by 2025 that it would look to re-engine its existing 737.

 

And Airbus management said they don’t think the technology needed to make significant improvements will be even available until that time frame.

 

Adding to the pressure on these two large manufacturers is China’s COMAC and Russia’s United Aircraft Corp., who also plan to have their single-aisle aircraft on the market by 2016.

 

But it is the CSeries that is making Boeing and Airbus sweat, said Raymond Jaworowski, senior aerospace analyst with Forecast International in Newton, Conn. “The CSeries is the biggest factor in their calculations,” he said.

 

That’s a big about-face for Boeing and Airbus, who have grown used to their duopoly position in the skies. When the CSeries was launched, they were dismissive of the program — that is, until Bombardier landed the Republic Airways order for 40 CSeries aircraft earlier this year, said Mr. Jaworowski

 

“It was a real eye-opener for the industry, because that was a real competition,” Mr. Jaworowski said. “Republic was looking at other aircraft, and the fact CSeries won a competition like that really caused consternation, especially at Airbus, and at Boeing.”

 

Which route the larger manufacturers will take is not expected to be revealed until later in the year, he said.

 

Bombardier maintains, however, that the CSeries offers a “double-digit” cost savings over a re-engineered aircraft from either Boeing or Airbus. Mr. Boehm said he would have to see their finalized plans before assigning a more specific cost savings.

 

“Bombardier definitely has to acknowledge that we are now competing more directly with Boeing and Airbus,” he said.

 

Much of the CSeries advantage comes from the fact that both the 737 and A320 are much larger aircraft and not suited for the segment the CSeries will compete in, Mr. Boehm said.

 

Although Bombardier is closing the gap on the size difference between its jets and the larger commercial aircraft, the CSeries can still optimize certain routes that airlines would have trouble making a profit on with the larger planes.

 

Still, one big advantage Boeing and Airbus currently have over the CSeries is that their aircraft have a proven track record. Ironically, serious delays in the development of the 787 Dreamliner and A380 programs is a cause for concern for would-be CSeries customers. Boeing, for example, announced yet another delay to its 787 program this week, saying it now won’t be delivered until the early part 2011.

 

Mr. Boehm said the CSeries program remains on track and still plans to freeze its design later this year. It is still making tweaks currently.

 

Early testing on the aircraft’s wings have also revealed some heartening news, as well. Mr. Boehm said the wings have proven to be stronger than originally expected. That means Bombardier might be able to shave some of the weight off them and drive even further efficiencies.

 

“If you could shave away a little weight and it would still do ultimate load, you’ve got a lighter plane,” he said.

 

Mr. Boehm is also confident there is enough breathing room built into the CSeries’ 63-month development cycle to deal with any unforeseen issues.

 

Nevertheless, Fadi Chamoun, BMO Capital Markets analyst, said the real threat to the CSeries is not posed by Airbus or Boeing, or any number of new entrants from China, Russia or Japan. Rather, its biggest threat is not getting the plane to market on time and on budget, he said.

 

“Our biggest concern with the aircraft is execution rather than being challenged by a re-engineered or an all-new clean sheet narrow-body aircraft from Boeing or Airbus. The CSeries occupies a segment of the market that current narrow-body aircraft do not serve in an efficient manner,” Mr. Chamoun said in a note to clients.

 

“In the immediate term, the aircraft’s success is judged by how it is received in the marketplace and its ability to sign up customers.”

 

(Courtesy of the Financial Post)

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Airbus a déjà dit que ceci est un ébauche qui à 99.999999% de chance de ne jamais se réaliser.

 

De toute manière, hors quelque exception(ex comet qui fut désastreux), il est presque impossible aujourd'hui pour un avion dont les moteurs sont intégrés à la cellule d'être accrédité de vols pour des question évidente de sécurité.

 

Et puis Bombardier à le temps de développer 2 avion d'ici 2050.

 

Cet ébauche est destiné à faire de la pub pour recruter de nouveaux ingénieurs aéronautiques ainsi qu'à se donner une image de marque "cool".

 

 

Et puis je trouve drôle qu'on dise que Bombardier est des années derrière Airbus et Boeing alors que ces deux dernier ont avouer qu'ils devront remotoriser leur petit porteur pour être compétitif avec la CSeries...

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