MonTREAL —Bombardier Aerospace is undergoing some major changes, including a restructuring of operations that will result in the layoff of 1,800 employees and the retiring of president and CEO Guy Hachey after six years in the post.
The Montreal-based company says its aerospace division will operate in three segments — business aircraft, commercial aircraft and aerostructures and engineering services — each headed by an executive. The railway segment based in Germany remains intact.
Hachey, 59, took over the aerospace division in 2008 following a 30-year career in the automotive industry with General Motors and Delphi Automotive Systems.
He left the company Wednesday as its new CSeries commercial aircraft remains grounded following an engine incident at the end of May. The aircraft has undergone several delays and is now expected to be delivered in the second half of next year.
In a release issued Wednesday after markets closed, Bombardier said Hachey was retiring as a result of this reorganization.
Guy led Bombardier Aerospace during an important period in its history. I wish to thank him for his contributions over the past six years, Bombardier CEO Pierre Beaudoin said in a terse, one-line comment.
Spokeswoman Isabelle Rondeau declined to say how long the restructuring plans have been in the works and whether there was a disagreement between Hachey and the company that prompted the change.
Hes retiring today, she said repeatedly.
We are changing the structure because the financial performance and execution have not met expectations and we want to have a lighter structure.
Rondeau said the change isnt the result of problems with the CSeries, nor should it be viewed as desperation by the transportation giant.
Its a new step in the evolution of BombardierWeve invested in products and we really feel this new structure will allow us to be more agile, more flexible. It will increase our focus on growth areas.
Effective immediately, the heads of all segments will report to Beaudoin. They are Lutz Bertling at Transportation, Eric Martel at Business Aircraft and Mike Arcamone at Commercial Aircraft. The head of the new Aerostructures and Engineering Services business segment will be appointed in the next few weeks.
This segment will focus existing efforts on the design and development of complex advanced composite and metallic aerostructures for all classes of civil aircraft, including fuselage, wings and engine nacelles.
Some aerospace functions and the customer services division will be absorbed into the three aerospace units, generating unspecified cost savings. The new structure will be in place Jan. 1.
Rondeau said the change will result in the layoff of about 1,800 indirect functions such as finance and human resources, or 4.8 per cent of Aerospaces global workforce of more than 37,000.
Its really spread everywher. Bombardier Aerospace worldwide, so its not just Montreal.
Meanwhile, Bombardier said economic sanctions imposed on Russia could have an impact on the timeline of the companys plans to set up a plant in the country.
The Montreal-based giant was hoping to conclude negotiations this year with Russian company Rostec for the assembly of 100 Q400 regional jets in a project estimated at $3.4 billion.
Company spokeswoman Marianella Delabarrera said Bombardier is now being realistic about the possibility the project will be delayed.
Foreign Affairs Minister John Baird announced this week that Canada would slap sanctions against more Russian individuals and entities, including government agencies, over that countrys continuing support for rebels in eastern Ukraine.
Canada has so far imposed sanctions against 110 individuals and entities.
Delabarrera said Rostec has not been targeted by the sanctions and that talks with the Russian company would continue.
On the Toronto Stock Exchange, Bombardiers shares closed down two cents to $3.74 on Wednesday.
