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Bombardier to lay off 12,400 employees as it halts aircraft, rail production in Ontario, Quebec in coronavirus shutdown – Financial Post

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Bombardier Inc. will temporarily lay off 12,400 employees in Canada as it shuts down private jet and rail production in Ontario and Quebec in accordance with provincial orders to suspend non-essential work to combat the spread of COVID-19.

The beleaguered Montreal-based plane and train maker announced Tuesday it will temporarily suspend most operations starting Tuesday evening until Apr. 26.

About 70 per cent of Bombardier’s Canadian workforce of 17,600 people will be laid off, including plant workers and corporate employees who aren’t needed in the short term, spokeswoman Jessica McDonald said in an email. They will not be paid during the temporary layoffs, but will continue to receive benefits and are encouraged to apply for employment insurance.

About 3,000 people work at Bombardier’s private jet manufacturing facility in Toronto, with thousands more employees based at facilities in Quebec.

The senior leadership team will forgo pay during this period. The board has agreed to forgo pay for the rest of the year.

Bombardier also suspended its 2020 guidance.

“Since the coronavirus outbreak, the company has been focused on keeping our employees safe, serving our customers to the best of our ability during these difficult times and taking the necessary actions to protect our business for the long term,” chairman Pierre Beaudoin said in a statement.

“In addition to the actions announced today, Bombardier has cut all discretionary spending, is continuing the work on closing the previously announced transactions and is pursuing additional measures to enhance liquidity.”

The coronavirus pandemic hit as Bombardier was in the midst of multiple deals to shed assets to pay down its high debt and exclusively make private jets.

France’s Alstom was in the process of buying its rail division, while deals to sell parts of its commercial aviation businesses have yet to officially close. Analysts have questioned whether the deals will go through during the market rout.

Bombardier’s stock price has plummeted to 43 cents from about $1.21 when it announced it would become a pure-play private jet maker in February.

• Email: ejackson@nationalpost.com | Twitter:

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China’s March Factory Outlook Jumps as Global Threat Looms – Yahoo Canada Finance

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(Bloomberg) — Chinese manufacturing activity rebounded strongly in March, signaling that the world’s second-largest economy is restarting just as it faces a growing threat from slumping external demand.

For manufacturing, the official purchasing managers’ index rose to 52.0 this month, according to data released by the National Bureau of Statistics on Tuesday. That’s up from a record low of 35.7 in February and above the 50 mark which signals improving conditions. The gauge covering services and construction was at 52.3.

While the rise indicates better sentiment at Chinese factories, output remains a long way from normal. The survey asks firms to state how business was compared to last month, so the data just show that Chinese companies think things have improved from the sharpest contraction since at least 2005, when the series began.

China is still expected to have an unprecedented economic contraction this quarter, something that would have been unthinkable before the viral outbreak. The outlook for the April-June period depends both on how quickly domestic demand can rebound now the virus is contained, and the strength of demand from overseas markets like the U.S. which are facing their own spikes in infections.

“The number above 50 doesn’t mean that economic activity is fully resumed,” Zhang Liqun, a researcher at China Logistics Information Center, which helps compile the data, said in a statement on its website. “We need to fully understand the unprecedented austerity and complexity, and should pay great attention to the virus shocks on production and demand.”

The Second Virus Shockwave Is Hitting China’s Factories Already

S&P 500 futures erased gains after hitting their highs Tuesday morning after the data. Asian stocks were mixed.

Chinese factories, which endured weeks of work suspensions in February after travel and trade stopped nationwide, are now facing canceled export orders as the pandemic hits the rest of the world.

“While manufacturing PMI rebounded rapidly in March, the survey showed companies still face relatively big operational pressures,” the NBS said in a statement, adding that more firms are reporting funding shortages and falling demand than in February. “The global virus spread will hit the world economy and trade seriously and bring new, severe challenges to the Chinese economy.”

A sub-index of new export orders rose to 46.4 in March, up from 28.7. A manufacturing employment indicator stood at 50.9, compared with 31.8 in February.

What Bloomberg’s Economists Say…

“Despite improving conditions, the Chinese economy has not returned to normal, and faces challenges unseen for decades on both domestic and external fronts. Policy support is likely to be stepped up, especially fiscal measures. We also expect more monetary policy easing.”

— Chang Shu and David Qu, Bloomberg Economics

See here for the full note

Around the region data showed a mixed picture for industry. Japanese industrial output rose slightly in February from January, boosted by output of electronics in the period before the virus really started to hit global supply chains. Car production was down and total output is forecast to drop 5.3% this month.

South Korean output dropped 3.8% in February from January, with much of that caused by a shortage of auto parts affecting car production, according to Citigroup economists.

In China’s services and construction sectors, while the headline number rose above 50, much of the underlying activity was still in contraction, with employment at 47.7 and new export orders at 38.6. That indicates companies don’t want to hire before they can confirm there’s been a solid return of business activities, according to Iris Pang, Chief Greater China Economist at ING NV in Hong Kong.

“This won’t change overall policy stance,” according to Zhou Hao, an economist at Commerzbank AG. “I think the government is looking at the hard data to determine the policy steps, which is probably pointing to further economic headwinds and more policy support.”

(Adds markets in sixth paragraph, data on Japanese and South Korean output from 10th paragraph.)

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China shows strong factory activity in March – MarketWatch

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BEIJING–An official gauge of China’s manufacturing activity rebounded strongly in March as factory production resumed after the coronavirus epidemic was largely put under control in the country.

The official manufacturing purchasing managers’ index rose to 52.0 in March from a record low of 35.7 in February, the National Bureau of Statistics said Tuesday. The 50 mark separates expansion of activity from contraction.

The March result came in above the median forecast of 51.5 by economists surveyed by The Wall Street Journal. Purchasing by manufacturers is a leading indicator of business activity because factories buy supplies in anticipation of demand.

The statistics bureau said the reading only reflects work resumption from February and it doesn’t mean China’s economic activity has returned to normal.

The production subindex climbed to 54.1 from 27.8 in February. The new-export-orders subindex, a gauge of external demand, rose to 46.4 in March from 28.7 in February. The subindex measuring imports increased to 48.4 from February’s 31.9.

The government has rolled out a slew of measures to help factories resume production and retain workers, including offering tax cuts and cash returns. The People’s Bank of China on Monday lowered a key interest rate in the country’s interbank market, the latest effort by Beijing to restart an economy struggling to recover due to the coronavirus.

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Most actively traded companies on the TSX – Yahoo Canada Finance

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TORONTO — Some of the most active companies traded Monday on the Toronto Stock Exchange:

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Toronto Stock Exchange (13,038.50, up 350.76 points.)” data-reactid=”13″>Toronto Stock Exchange (13,038.50, up 350.76 points.)

Bombardier Inc. (TSX:BBD.B). Industrials. Down three cents, or 6.59 per cent, to 42.5 cents on 17.5 million shares.

Suncor Energy Inc. (TSX:SU). Energy. Up $2.54, or 15.46 per cent, to $18.97 on 15.6 million shares.

Canadian Natural Resources Ltd. (TSX:CNQ). Energy. Up $2.40, or 18.02 per cent, to $15.72 on 15.5 million shares.

Aurora Cannabis Inc. (TSX:ACB). Health care. Down 17 cents, or 11.64 per cent, to $1.29 on 15.2 million shares.

Cenovus Energy Inc. (TSX:CVE). Energy. Up six cents, or 2.55 per cent, to $2.41 on 11.4 million shares.

MEG Energy Corp. (TSX:MEG). Energy. Up 27 cents, or 22.13 per cent, to $1.49 on 11.4 million shares.

<p class="canvas-atom canvas-text Mb(1.0em) Mb(0)–sm Mt(0.8em)–sm" type="text" content="Companies in the news:” data-reactid=”20″>Companies in the news:

Transat AT. (TSX:TRZ). Down 74 cents or 7.8 per cent, to $8.75. The Competition Bureau’s warning about Air Canada’s proposed takeover of Transat AT Inc., which owns Air Transat, should be taken in context, analysts say. The watchdog said Friday that eliminating the rivalry between the two Montreal-based carriers would discourage competition by prompting higher prices and fewer services. Desjardins Securities analyst Benoit Poirier said he believes the purchase will still be approved “considering the companies’ willingness to address the bureau’s competition concerns,” such as potential dominance of airport slots.

Canadian Imperial Bank of Commerce (TSX:CM). Up $1.33 to $79. An Ontario Superior Court judge has ruled against the CIBC in an overtime class-action lawsuit filed more than a decade ago. Judge Edward Belobaba found the bank liable for breaching its overtime obligations to a class of about 31,000 current and former tellers, personal bankers and other front-line workers in branches across Canada.

Canadian Apartment Properties Real Estate Investment Trust. (TSX:CAR.UN). down 23 cents to $41.90. Some of Canada’s biggest landlords say they’re committed to working with tenants who have lost their job because of the coronavirus pandemic. Mark Kenney, CEO of Canadian Apartment Properties Real Estate Investment Trust, says the company is committed to working with those who have suddenly lost their job, and is “violently against” evicting anyone who’s in distress.

Freshii Inc. (TSX:FRII). Down one cent to $1.23. Freshii Inc. is delaying the filing of its latest financial results as it deals with the COVID-19 pandemic and its impact on its restaurants and franchise partners. The company says it has also temporarily “streamlined its head office workforce” in a move to cut costs. It did not say how many people were affected. Freshii says the COVID-19 pandemic is expected to have a material impact on its business, operations and financial performance for at least the first half of 2020.

Parkland Fuel Corp. (TSX:PKI). Up 85 cents or 3.5 per cent to $25.05. Parkland Fuel Corp. is cutting its 2020 capital spending budget by 52 per cent and trimming executive salaries in response to the uncertain economic impact of the novel coronavirus. The Calgary-based company, which sells fuel through more than 2,600 service stations throughout Canada and in the United States and Caribbean, says it plans to spend $275 million this year, down from its earlier guidance of $575 million.

Air Canada (TSX:AC). Down 67 cents or four per cent to $1608. Air Canada will temporarily lay off more than 15,000 unionized workers beginning this week as the airline struggles with fallout from the COVID-19 pandemic. The layoffs will continue through April and May amid drastically reduced flight capacity from the Montreal-based airline. Air Canada says the two-month furloughs will affect about one-third of management and administrative and support staff, including head office employees, in addition to the front-line workers.

This report by The Canadian Press was first published March 30, 2020.

The Canadian Press

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