Thursday, 18 Apr 2024

New order for Bombardier Alstom Metro cars in Montreal won’t prevent job cuts

A $448-million order by Montreal’s transport agency for more Azur metro cars from a Bombardier-Alstom consortium won’t save at least 100 Bombardier Inc. workers from layoffs.

The fate of the plant in La Pocatière, which houses the company’s railway division, had been uncertain since the loss of a lucrative Montreal electric train contract and a lack of orders.

Announced Monday, the fresh deal for 153 rail cars follows Bombardier’s announcement of company-wide layoffs of 5,000 employees last week — including 2,500 in Quebec and 500 in Ontario — as part of chief executive Alain Bellemare’s five-year plan to rein in costs, focus on rail and business jets and reduce the company’s net long-term debt of $9 billion.

The work order comprises 17 trains of nine cars each, with deliveries set to start in the spring of 2020, according to the consortium and the Société de transportation de Montréal (STM).

The Montreal-based Bombardier’s share adds up to $281 million, with French rail giant Alstom claiming $167 million.

The agreement comes as a hefty top-up to the STM’s original $1.2-billion order in 2010 for 52 trains — 468 cars — to modernize the city’s electric metro fleet. The last two of those trains were slated for delivery by the end of the year.

Nearly 170 Bombardier employees will be assigned to the new order, which also includes 70 employees at an Alstom plant between Montreal and Quebec. The contract mandates 60 per cent Canadian content and will draw on a network of several hundred suppliers across the province, the consortium said.

Despite the order, about 100 employees at the La Pocatière facility will be laid off through February. The union said earlier this year that until new orders were announced, at least 200 of the 615 employees there were expected to lose their jobs temporarily by the end of 2018.

Most of the manufacturing and all of the final assembly of the new Azur cars will be done in La Pocatière, in the Lower-Saint-Laurent region northeast of Quebec City. Alstom will supply the engines and chassis as well as train control, passenger information and video surveillance systems.

“We are delighted by this announcement, which will maintain hundreds of jobs at our plant in La Pocatière, as well as at our North American headquarters in St. Bruno,” said Benoit Brossoit, who heads Bombardier Transportation’s Americas region.

In February, Quebec’s public pension fund manager awarded a pair of contracts for a $6.3-billion light-rail project that will connect the city to its suburbs and to its international airport. Montreal-based SNC-Lavalin Group Inc. is a part of both consortia that are responsible for making the cars and for engineering, procurement and construction. Bombardier has no role in either.

No local content requirement for the rolling stock contract was set by the Caisse de depot et placement subsidiary that is overseeing the project.

Bombardier’s shares lost 14 cents or 5.3 per cent at $2.51 in early afternoon trading on the Toronto Stock Exchange.

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