Unionized workers at Bombardier’s Downsview plant have agreed to permit some critical production work to move overseas as the company tries to cut costs on the Q400 turboprop plane.
Bombardier has made it clear to workers that it is struggling to be competitive with rival ATR, a joint French-Italian venture, whose turboprops are cheaper than the Q400.
The company has landed few orders for the Q400 in recent months, so it wants to send work on the cockpit to China and the wing to Mexico, to cut costs – though no formal outsourcing deal is in place.
Bombardier spokeswoman Marianella de la Barrera said the company has been looking at ways to become more competitive to ensure long-term profitability.
“It’s no secret we have been working with the union,” she said. “We are in commercial discussions with suppliers to transfer this work.”
She added, however, that the company remains committed to Canada and the Q400 turboprop will be assembled in Toronto.
Under the new deal with the union, Bombardier has agreed to extend a buyout period for up to six years to eliminate about 200 jobs at the Downsview plant, said Scott McIlmoyle, president of Unifor Local 112.
“We had a vote last October, and the membership turned it down by 72 per cent,” he said, noting the union currently represents about 1,600 workers in the plant.
Management approached the bargaining committee again in late May to reach an agreement.
After tweaking some details, but mostly extending the buyout period from the original two years, the membership voted 66 per cent to accept the proposal earlier this month, he said.
“It’s not super high. It’s not overwhelming,” McIlmoyle said. “I think fear played a key role for a lot of members.”
That included a possible labour dispute over the next contract, elimination of the Q400 program altogether if sales don’t pick up, and financial uncertainty as Bombardier struggles to launch its CSeries jet.
The CSeries development project is billions over budget and years behind schedule, though Swiss International Air Lines is set to launch commercial service in mid-July.
The Quebec government has committed $1 billion (U.S.) in exchange for a 49.5 per cent stake in the CSeries program. Bombardier has also asked the federal government for a similar investment, and the Trudeau government says it is still studying the request.
Innovation Minister Navdeep Bains told reporters last week that Ottawa wants to protect Canadian jobs as well as ensure Bombardier’s head office remains here.
Merv Gray, the plant chair for Unifor Local 112, who supported the proposed $12 million in buyouts, argued the outsourcing deal is “short-term pain for long-term gain.”
Because it helps Bombardier shave $500,000 in costs per plane, along with an additional $1.5 million in supplier cost savings, Gray said the sales team can now compete with ATR.
“It puts it in the ball park,” he said. “We’re going to give them the tools to fight another day.”
He added that even though 200 jobs in the cockpit and wing will be eliminated, some individuals can move into other areas, especially if demand picks up for Global 7000/8000 business jets.
Gray said about 50 workers, who were laid off, have been recalled in the past eight weeks.
Bombardier also announced Monday that it is selling its amphibious aircraft program to British Columbia-based Viking Air Ltd. It did not release any financial details on the transaction.
Analysts noted Bombardier has delivered only 18 amphibious aircraft since 2010, so the deal is not expected to be financially material, but allows the company to focus on core operations.
Toronto Sun
Unions agree to outsource part of Q400 production
