Bombardier will no longer make subways or streetcars
On the tail of news that it will no longer be manufacturing commercial aircrafts, Montreal-based Bombardier has now announced that it will also be departing from the subway and streetcar business.
The company — which in its 77-year history has made snowmobiles, jets, all-terrain vehicles and more — is behind such public transport vehicles as the subway trains and new streetcars in Toronto, the STM subway trains in Montreal and even the trams in Melbourne, Australia.
Bombardier will be selling the subway and streetcar side of its operations, called Bombardier Transportation, to French competitor Alstom SA for somewhere around $9 billion in a deal that is expected to close in early 2021.
It also sold its final stake in the A220 aircraft program to European manufacturer Airbus this past week and had previously sold off a number of its other airplane assets to various companies, and also recently got rid of its Toronto factory.
The sales are apparently in order to lessen Bombardier's billions in debt, and mean it will now focus only on the private aircraft business.
I remember when Bombardier was reliable. The Toronto streetcar fiasco left a bad impression on me. I wonder if things will improve under Alstom? I hope they can try to keep jobs in TB and improve their management.— Fives (@5fifty5) February 18, 2020
It also means a cut in staff — to about 19,000 from the current 24,000. In its prime, the Quebec transportation firm employed more than 70,000 people, according to the Montreal Gazette.
Those who have stakes in Bombardier Transportation, such as pension fund manager Caisse de dépôt et placement du Québec, will have their shares converted into shares in Alstom. There is no word about what will happen to the company's plant in Thunder Bay, but it looks like Alstom may simply take it over.
It's a sad story for some Quebecers, as Bombardier has long represented an international success story out of the province. But, CEO Alain Bellemare tells the Financial Post that it is the best decision for the company's long-term health.
Hopefully Bombardier's shift in concentration to corporate jets — as well as the transportation division's change of hands to Alstom — will mean that customers will actually be able to get their vehicles on time.
Unfortunately, it seems stocks in both companies are falling since the news.
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