Bombardier to Cut 7,500 More Jobs Through 2018, Most in Rail
nytimes.com
nytimes.com
"Hey Federal Government, we'd like you to help us out to the tune of a billion dollars, because we're such a big important employer here in Canada... also, we're going to slowly stop being such a big employer"
The layoffs mentioned here seem to be more related to the rail division than to aircraft manufacturing. The rail division which appears to have a lot of problems.
http://business.financialpost.com/news/transportation/bombar...
http://spacing.ca/toronto/2016/05/03/bombardiers-mexico-prob...
Do you mean Canadian government support? Not US?
In the late 1990's Embraer and Bombardier sued each other in the WTO which found both governments guilty of subsidies.
Embraer is preparing to sue Bombardier/Canada again: http://www.reuters.com/article/embraer-bombardier-idUSL2N18D...
And jet fighters etc. are usually made by different manufacturers altogether, except for military freighters.
There are of course self-sufficiency reasons too. If the West put an embargo in place against China for airliners, they'd be SOL. This is why they're trying to hard to make their own planes (and perhaps more importantly, engines).
Huge lock-in :)
Aircraft manufacturers are all semi-nationalized they are 'too big' even for private capital to compete on - barriers to entry far too high and too much risk.
Airbus is literally an EU creation. Boeing lives on defence contracts.
So it needs 'a national team playing for it' kind of thing.
There are a lot of jobs, it's very long term, it's big money, involves a lot of tech and R&D so it's a good industry to have if you can get it going. But it doesn't get going without playing 'home team'.
You don't really have a choice on subsidies if you want a home-grown aerospace industry in the current climate. Other countries subsidize heavily.
In theory we have international agreements preventing such things, but there are a lot of ways to subsidize a company.
Bombardier is one of the main anchors around which many major aircraft industry company are located. In turn those suppliers also help explain the Bell Helicopter Textron plant.
I'm thinking of companies like Safran Landing Systems (formerly Messier-Dowty), Pratt-Whitney Canada (one of, if not the, largest producer of turboprops and turboshafts engines), CAE (sims, avionic), Thales (avionic), Héroux-Devtek (landing gears), etc. Plus all the smaller subcontractors.
It isn't impossible that new competitors will emerge but it will be a long difficult road.
The design challenges (and off-the-shelf parts) for smaller aircraft are more viable.
Alternatively, you could start by building subsystems and expand to full aircraft.
I suspect you could divide the industry at some arbitrary point and argue signifibant maturity by then. 1950, 60, or 70 depending on whether you're considering manufacturers, technology, or airframes, by and large.
Consolidation does seem to be a very strong trend, and one that may prove difficult to reverse.
I am reliably informed that business travel sucks donkey ass, (almost) regardless of class. It's tone deaf because travel has positive connotations to most people, not because he's out of touch with reality. To a business traveler, economy class is adding insult to injury.
The saying "A fool and his money are soon parted" extends to corporations, too.
Here's hoping some more competition happens in the Canadian business world because it's woefully uncompetitive and tends towards oligopolies and monopolies.
Does firing 1000 people have a more than 2x effect than firing 500?
Unless by exponential, you just mean "a lot".
People do not like negative situation that they can visualize easily themselves into it. Losing a job is something that can happen to everyone, has a big impact. That is why it's in the news.
I get what you're saying, but...does it? If I look at global real GDP, we're going along, business as usual.
As the OP says, jobs are gained and lost on a much greater scale, monthly. There's a reason that jobs are being shed at this particular company, and it isn't because we no longer need transportation infrastructure. Bombardier is out, Tesla is in.
Pump the brakes there. The next time you ride the subway or take a commuter flight you won't be riding on a Tesla train car or aircraft. I get that the average HN visitor is enamored with Elon and Tesla, but c'mon now.
;)
My point is, Bombardier fires and across the map Tesla hires.
I'm the furthest thing from a Tesla pumper if you are so inclined as to look at my comment history.
And while many of them will eventually get new jobs, it's going to take some retraining (not a whole lot of demand for train engineers these days), and time.
Worth highlighting I am not saying this with disdain for the private equity industry. One of its intanigble benefits is that it serves as an agent of dramatic change for companies and industries - change that cannot spontaneously occur for public or government owned institutions (e.g. the post office). Will be interesting to see how this plays out long term...
It's a difficult balance to strike - keeping and supporting high tech manufacturing, while trying to remain competitive. I think at the moment, the government intervention (blocking suitors and direct investment) is in fact doing more harm than good, but perhaps they know better - I have no knowledge of how competitive the C-Series really is or not.
https://en.wikipedia.org/wiki/Bombardier_Recreational_Produc...
Bombardier is a running joke in Northern Ireland, where they bought Short Brothers[0] and shut-down a promising and well-advanced airliner project only to recognise that there was a market niche and launched the CRJ hastily streched from their Challenger business jet. And then a few years later, after selling over 1000 of them, discovered they owed per-hull royalties to Bill Lear ( of Learjet ) who held the rights to the original business jet design...
Every few years they lay-off hundreds of Belfast workers, then receive a big order and hastily recruit agency-supplied contractors who have no idea how to assemble an aeroplane. Guess what.. by the time they're up to speed, it's time for another lay-off because business is soft again.
[0] the industry-preferred partner for Shorts was Fokker, but uk.gov was interfering and preferred Bombardier
Nobody rides ATVs, snowmobiles and jetskis. Everyone rides the subway.
If only the machines weren't so damn noisy. They are a real terror to the environment.
They have a factory in Derby, UK, so Britain has loads of Bombardier trains.
Flicking through, other places are Shanghai, Delhi, Sweden, Kuala Lumpur, Vancouver, Detroit, Beijing, Seoul, Austraia, Germany, Hungary, Slovakia, Norway, Italy, France, Adelaide, ...
There isn't much branding on most trains. Sometimes a tiny plaque in the corner somewhere.
Where I live there are more miles of snowmobile trails than there are paved roads, and there's a lot of roads.
I, on the other hand, did not know they made things other than public transport vehicles such as planes and trains. I'd say anyone who has travelled a modest amount on planes will have flown on one of their planes and most people will have used one of their trains if they've ever been to a large city (one might not realize that this is the case however).
He then went on to explain that the management team were surprised at how quickly orders from customers were drying up.
Pointing out that if everyone was cutting quickly and deeply then it's hardly surprising that demand dries up seemed a potential career limiting move so I kept quiet.
Because it is not free market economic activity governed by real demand. It is just government officials deciding to use other peoples money to create demand in certain sectors.
If people in a community pooled their own money together to build a new bridge then you'd have economic activity that is created due to real demand and there would be a real incentive to make sure they are not overpaying or that their money is wasted.
But when the government does it you end up building natural gas filling stations in Afghanistan for millions of dollars servicing a total of 3 cars running on natural gas in that country which on top of that has to be rebuilt multiple times because the Taliban bomb it again and again.
Isn't people in a community pooling their money together what a government is? Often the increase in property values alone is more than the cost of building the bridge, the difficulty is co-ordinating them.
If governments owning and directing whole economic sectors truly was an efficient way to manage an economy then Socialism (government demand driving the economy) would've beaten Capitalism (private demand driving the economy) easily and by a long shot.
It didn't just fail being more efficient than Capitalism, it even consistently ended up impoverishing and corrupting any nation that tried implementing it.
I'm not sure what your experience was like, but I'd rather be told the truth than lied to. I understand that the directors of a company are people too, and they want to be seen as good people. In the long run, I respect people who told me a difficult truth much more than I respect the people who made it seem as if they were forced in to a particular course of action by forces beyond their control.
I suspect the willingness of upper management to explain the need for layoffs as "surprising", or beyond their control, is as much about thinking of themselves as good people. I'm sure they are fully aware they are compensated for their ability to direct the strategy of a company, and the people they are laying off generally had the least ability to change the direction of the company to prevent layoffs. If they were being fully truthful, the management structure should oftentimes be reducing their compensation first and laying themselves off.
That being said, I understand how ridiculous that expectation is. I just think it's insulting to everyone involved when a company fires the people least responsible for the current predicament, and lies while doing it. I'd respect a manager more who told me it was me or them, and they made the best decision for themselves.
I don't know if it's good recession advice, but if a company has to make cuts, it's way way better do a little too much very quickly. It's weird for a month then things start getting back together.
I've never worked anywhere where upper management didn't take 50% pay cuts with layoffs. (i'm sure they were restored in 6 months or whenever the business restabilized). Actually that announcement probably kept a lot of people from just leaving after the layoff.
Insufficient demand can happen for many reasons, some of them can be caused by poor decisions within the company, some of them can be caused by the overall economy.
It's irrational for a corporation, not matter how large it is, to keep all it's employees hoping that it will have such a great impact on the overall economy that it will create demand again.
Companies are always much weaker than global and national economic trends, they have to be reactive. If they are not they usually go out of business which is even worse than cutting some jobs.
Rail traffic from CA (or WA or OR) to the east has to deal with this insignificant barrier also known as the Rocky mountain range. Passes through the Rockies are frequently as high as 4000 feet and feature exciting twists and turns. It isn't impassible to rail, but it doesn't lend itself to the type of high speed rail that can compete with air travel.