To result in net annual savings of $33 million Cdn ($25 million US)
Will impact employment levels in Tucson and Wichita
Bombardier Aerospace has announced plans to create integrated manufacturing centres for its Bombardier Learjet* and Challenger* Series business jets at its Wichita, Kansas and Dorval, Québec locations respectively.
The new business aircraft manufacturing centres will regroup business aircraft final line activities and interior completions at one site. By combining these two activities in one location, Bombardier Aerospace will significantly reduce its production cycle times and inventory levels while improving its competitiveness. Production of Bombardier regional aircraft currently follows the integrated manufacturing centre model.
The creation of the two business aircraft integrated manufacturing centres will result in total net savings of $33 million Cdn annually ($25 million US) starting with the first full year of operation. The integrated manufacturing centres will be fully operational by the first quarter of 2005.
Additional benefits of the integrated manufacturing centres include:
- A centralized expertise around the same product lines, which will enable Bombardier Aerospace to be more efficient in its manufacturing activities and to better focus and respond to its customers' needs with a more streamlined and flexible organizational structure.
- The proximity to its supplier base, which will facilitate suppliers' 'just in time' integration into production activities and help achieve the full potential of cost reduction initiatives for the acquisition of aircraft components.
- A reduction in the number of sites required for production activities, which will make available manufacturing space for other business units.
Impact on Employment Levels
The creation of these integrated manufacturing centres will result in the relocation of manufacturing activities and a reduction in employment levels. Estimated severance costs related to the reduction in employment levels will be approximately $8 million US.
- In Tucson, a reduction of approximately 800 jobs over the next 15 to 18 months will take place as a result of the transfer of Bombardier Learjet interior completions to Wichita and Bombardier Challenger interior completions to Dorval. Some of the employees affected will have the opportunity to relocate to fill jobs in Wichita and Montréal.
In addition, Tucson has been selected as the location for the western Bombardier Regional Aircraft Service Centre, which will result in the creation of approximately 300 new jobs over a three-year period. The Bombardier Business Aviation Services Centre will continue to operate at the site, adjacent to Tucson International Airport.
- In Wichita, there will be an overall workforce reduction of approximately 350 positions over the next 12 to 15 months. The increase in the number of employees due to the transfer of Bombardier Learjet completions from Tucson to Wichita will be offset by a reduction in the workforce as the assembly process of the Bombardier Challenger 300 is moved to Dorval.
- In Dorval, there will be no immediate increase in the level of employment resulting from the transfer of the Bombardier Challenger 300 assembly line from Wichita and Bombardier Challenger 300 and Challenger 604 interior completions from Tucson.
"An integrated assembly and completion process is a significant competitive advantage in our industry," said Pierre Beaudoin, president and chief operating officer, Bombardier Aerospace. "These new integrated manufacturing centres will ensure our long-term success by maximizing synergies in our business aircraft production operations, resulting in significant cost savings and increased efficiency."
"We are dedicated to industry leadership in the regional and business aircraft markets. This integrated manufacturing strategy will simplify our processes and make it simpler for our customers to do business with us," he added.
Bombardier Aerospace, a unit of Bombardier Inc., is a world leader in the design and manufacture of innovative aviation products and provides services for the regional, business and amphibious aircraft markets. It also offers Bombardier Flexjet* and Bombardier Skyjet* business aircraft programs, technical services, and aircraft maintenance and pilot training for business, regional airline and military customers.
Bombardier Inc., a diversified manufacturing and services company, is a world-leading manufacturer of business jets, regional aircraft, rail transportation equipment and motorized recreational products. It also provides financial services and asset management in business areas aligned with its core expertise. Headquartered in Montréal, Canada, the Corporation has a workforce of some 75,000 people and manufacturing facilities in 25 countries throughout the Americas, Europe and Asia-Pacific. Its revenues for the fiscal year ended Jan. 31, 2003 stood at $23.7 billion Cdn. Bombardier shares are traded on the Toronto, Brussels and Frankfurt stock exchanges (BBD, BOM and BBDd.F).
* Trademarks of Bombardier Inc. or its subsidiaries.
John Paul Macdonald