Bombardier Prepares To Boost Aircraft Production

Canadian aircraft and train maker cancels employee layoffs after deciding to boost production of regional and business aircraft.

MONTREAL (AP) — Canadian aircraft and train maker Bombardier Inc. has canceled its announced employee layoffs and may soon recall some workers after deciding to boost production of regional and business aircraft.
 
''Today we are talking more about stability in our organization and we'll see in some cases if we will recall some employees,'' Bombardier Aerospace president Pierre Beaudoin said Wednesday in a conference call to discuss second quarter results.
 
Bombardier lost $71 million (euro52 million) in the April-June period in contrast to a profit of $58 million (euro42.5 million) a year ago. It cited an expected $162 million (euro119 million) writedown on its investment in the Metronet Rail upgrade of the London subway system.
 
Consolidated revenues rose to $4 billion (euro2.9 billion) in the period ended July 31, compared to $3.5 billion a year ago.
 
But its earnings from operations before special items amounted to $91 million (euro67 million), or 5 cents per share. Analysts polled by Thomson Financial had looked on average for earnings excluding items of 4 cents per share in the quarter.
 
The world's fourth-largest airplane manufacturer had completed 874 of 1,330 planned layoffs. The layoffs to date include 390 people at its facility in Mirabel, north of Montreal.
 
The employee recall may be required because the Montreal-based company plans to increase aircraft production on the strength of its improved backlog and confirmed commitment from suppliers.
 
Bombardier Aerospace's backlog has grown by 38 percent since the start of the fiscal year to a record $18.2 billion (euro13.3 billion). Net orders for the second quarter have more than doubled to 187, including 84 for regional aircraft. That compares to orders for nine aircraft in the same period of 2006.
 
Strong demand and rigorous management of costs have generated the solid quarterly results in both aerospace and transportation, chairman and CEO Laurent Beaudoin told analysts and media.
 
''Once again we are seeing the results of our continued efforts with both groups steadily improving profitability, as well as free cash-flow generation,'' he said.
 
The company's overall backlog has reached a record $47.9 million (euro35 million).
 
''Both regional as well as business aircraft have attracted this excellent level of new orders, a tribute to the diversification of our product portfolio,'' he added.
 
The transportation business has seen new orders from emerging markets such as China, India and Russia.
 
The results were announced as tight restrictions have been placed on continued operation of Bombardier's CRJ100 and CRJ200 by U.S. and Canadian aviation regulators after increasingly frequent instances of stuck or improperly operating flaps.
 
Pierre Beaudoin, who is a son of Laurent and a grandson of company founder J. Armand Bombardier, said changes that will be implemented won't have a material impact on the company's bottom line.
 
Initial upgrades are being developed, including a complete redesign of the flaps for the two older aircraft models. Later models of the regional jets have different designs and aren't affected.
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