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TORONTO — Canada's Bombardier Aerospace said Thursday it is cutting 3,000 jobs, or about 10 percent of its work force, because the demand for its business aircraft has deteriorated rapidly and is expected to remain weak for the foreseeable future.
The company said it now expects to deliver approximately 25 percent fewer business aircraft this fiscal year.
The world's third-largest maker of commercial aircraft said cuts will take place at its facilities in Canada, the United States, Mexico and Northern Ireland by the end of 2009.
The layoffs are in addition to the 1,360 job cuts announced Feb. 5 when Bombardier adjusted the production rates of its Learjet and Challenger aircraft.
Demand for business jets has "deteriorated rapidly," the company said.
"People can't afford to take them at the last minute. This is the kind of market we're in," said Guy Hachey, the President and Chief Operating Officer of Bombardier Aerospace.
Hachey said a glut of used planes on the market is hurting business and Bombardier is prepared to make more cuts if its markets weaken further.
"This recession is global. It's affecting all our customers," Hachey said.
The cuts come just months after U.S. lawmakers scolded auto executives for flying to Washington in private jets to ask for taxpayer bailouts. Two of the largest makers of general-aviation aircraft — Cessna, a unit of Providence, R.I.-based Textron and Hawker Beechcraft — have launched advertising campaigns to tell business executives to ignore criticism and keep buying planes.
Bombardier is also the world's second-largest train maker.
The streamlining came as Bombardier reported increased profits and revenues for the fiscal fourth quarter and full business year. Bombardier earned $1 billion in annual profits last year for the first time in its history.
The Montreal plant will be hardest hit as 1,030 jobs will be cut. That's in addition to 710 announced in February. Toronto will shed 475 jobs, Belfast 975, the United States 470 and Mexico 50.
"These decisions were very difficult to take but they were necessary to position the company in a viable position in the present environment and align production to the reduced market demand," Hachey said.
The layoffs include 470 jobs at the company's Wichita, Kan., facility. Bombardier also shed 350 Wichita workers in an earlier round of cuts.
A Northern Ireland leader called the cuts in Belfast "a massive blow" to the province's economy. Montreal-based Bombardier is the largest manufacturer in Northern Ireland, employing about 5,300 full-time staff and 700 subcontractors at its Belfast base.
Directors told the work force there that 310 full-timers and 665 subcontractors would lose their jobs in coming months. The subcontractors would be first to go, while union leaders will negotiate severance packages for those on long-term contracts.
"We are seeing a massive blow not just to the economy of east Belfast but to Northern Ireland," said First Minister Peter Robinson, who also represents east Belfast in the British Parliament in London.
The total head count reduction at Bombardier Aerospace this year of 4,400 represents 14 percent of its 32,500 aerospace workers. Meanwhile, Bombardier Transportation employs 34,200 people around the world.
However, the company is also hiring hundreds of workers for its new CSeries and other aircraft programs. Some of these jobs in its completion center and for engineering could be filled by workers who face layoffs.
Bombardier said it remains committed to building its new CSeries aircraft. The company said last month it reached a deal with Deutsch Lufthansa AG worth at least $1.5 billion for the new regional jet, signing a contract to build 30 CSeries model CS100 passenger aircraft for the German carrier.
In its financial report, the company said it generated net income of $309 million, or 17 cents per share, for the quarter ended Jan. 31, up from year-earlier profit of $218 million, or 12 cents per share.
The company said the increase in net earnings was due largely to lower income tax rates throughout the quarter and full fiscal year.
Quarterly revenue edged up to $5.4 billion from $5.3 billion.
Bombardier shares jumped 29 Canadian cents, or more than 9 percent, to 3.33 Canadian dollars, in afternoon trading on the Toronto Stock Exchange.
Analyst Cam Doerksen of Versant Partners said Bombardier's decision to cut aircraft production by 25 percent better reflects the reality in the marketplace.
"This new guidance is precisely in-line with our existing forecast and a more realistic target," he wrote in a report, adding that he expects a further 20 percent deliveries from fiscal 2009 next year.
Earlier this year, global aircraft giant Boeing Co. announced it plans to cut 10,000 jobs as the Chicago company faces weaker air traffic and pressure on military budgets.
Meanwhile, Cessna Aircraft Co. said it plans to lay off another 2,000 workers, about 13 percent of its work force, as the slumping worldwide economy forces more customers to cancel or delay orders for new aircraft.
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Associated Press Writer Shawn Pogatchnik in Dublin contributed to this report.
