Bombardier Inc. says it will cut another 1,600 jobs and stop making Learjets, a business jet that has been around for almost 60 years.
The Quebec-based aerospace company announced the moves in posting its quarterly financial results, which showed the company lost $337 million US in the last three months of 2020.
The job cuts will bring the company’s total workforce down to about 13,000 people around the world.
“Workforce reductions are always very difficult, and we regret seeing talented and dedicated employees leave the company for any reason,” said Éric Martel, the company’s president and chief executive officer.
“But these reductions are absolutely necessary for us to rebuild our company while we continue to navigate through the pandemic.”
About 700 of the job cuts are planned in Quebec and 100 in Ontario. A further 250 jobs will be eliminated in Wichita, Kan., where the Learjet is built. The rest of the job losses will be scattered across the rest of the U.S and Canada.
“The only thing the pandemic did was accelerate a sad ending,” aerospace analyst Richard Aboulafia with the Teal Group said of the Learjet’s demise.
Unifor, which represents 2,500 workers at a Bombardier facility in Montreal, is calling on the federal government to do more to help the aerospace industry survive the pandemic.
But many of Bombardier’s problems predate COVID-19.
Slow decline
The company is currently a shadow of its former self, having gone from an integrated transportation conglomerate that made planes and trains of all shapes and sizes, into essentially a niche maker of business jets.
For the year as a whole, the company sold 114 jets: 59 Globals, 44 Challengers, and 11 Learjets.
Learjets were first sold and flown in 1963, based on a design by inventor William Lear who was inspired by military jets The company was eventually acquired by Bombardier in 1990, and more than 3,000 Learjets have been sold over the plane’s history.
More cuts expected
Lecturer John Gradek at McGill University’s aviation management program said he suspects the Challenger jet could be next to get the axe as the company streamlines its business to be as efficient as possible, in an attempt to save up to $400 million a year.
“The only way they can do that significant cost cutting is to drop product.”
In its outlook, the company said it expects this year to be a “transition year” but it expects revenue from selling jets to improve as the global economy recovers from COVID-19.
A row of unfinished Bombardier Global Express aircraft is seen at a Bombardier plant in Montreal last summer. The Global Express jets are now one of the two types of business jets that the company makes. (Paul Chiasson/The Canadian Press)
Analysts underscored just how uphill the company’s climb is looking right now.
“While Bombardier outlined a series of restructuring efforts to improve earnings and cash generation, the company’s current financial position highlights the significant heavy lifting that still needs to be done within the organization even after all these asset sales,” TD Bank analysts Kevin Chiang and Krista Friesen said in a note to clients after the news came out.
Bombardier shares slipped about 5 per cent to 89 cents on the Toronto Stock Exchange on Thursday, which values the entire company at about $1.6 billion Cdn. That’s against a total debt load of more than $10 billion.
In 2018, those same shares were worth about $5. The company’s all-time value peaked in 2000 at roughly $25 a share.
Tough market
Gradek said the share sell off makes sense considering the company’s prospects.
“They’re becoming more of an elite business jet manufacturer and that’s not a very comfortable place to be in given that business travel is down and people are being more careful about where they are spending their money.”
The company’s cheapest, entry level jet now starts at $30 million, while other plane makers have come to market with much smaller business jets that come with a price tag between $1 million and $2 million.
“The market is saying: ‘I’m not sure that’s the way to go.'”
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
