Ski-Doo maker Bombardier Recreational Products Inc. is trimming 8 per cent of its work force as it shifts more of its production work to a new plant in Mexico.
The company, which is owned by Bain Capital, Caisse de dépôt et placement du Québec and the Bombardier family, said it will shift engine production from a plant in Juarez, Mexico, and watercraft production from Valcourt, Que., to an undisclosed location in Mexico.
The changes, slated to take effect in 2013, will result in the loss of 500 jobs in North America – 425 of them in Quebec. The company also plans to outsource North American distribution of its parts, accessories and clothing. It already manufactures all-terrain vehicles in Mexico.
The company said the move will free space on its main assembly line in Valcourt to increase production of its popular roadsters. “Demand is pretty high and growing. We need some room in Valcourt to increase the rate of production” of its three-wheeled Can-Am Spyders, said Pierre Pichettte, a company spokesman.
BRP characterized the move as an attempt to become more competitive and increase its flexibility.
“Building a global multi-market business is an ongoing business,” chief executive officer José Boisjoli said in a release. “To be a market leader, BRP needs to constantly challenge itself and adapt to change. This is not the first time that we changed things at BRP, nor will it be the last ... As we continue to expand our global presence, we will require more manufacturing flexibility so that we can secure our presence in these countries.”
BRP last announced a major restructuring in December 2008, when it announced a cut of almost 1,000 jobs as it curtailed production by 20 per cent to respond to the global economic crisis. The ongoing economic weakness has stalled plans to take the company public, nine years after it was purchased from industrial manufacturing giant Bombardier Inc. for almost $1-billion in a leveraged buyout. Last year, credit rating agency Standard & Poor’s said the private company’s revenue and profits had “both experienced sharp declines” in the last economic cycle and hadn’t yet recovered to prerecessionary levels.
BRP said it is hoping to “greatly minimize the number of layoffs” in this restructuring through retirement or by reassigning employees to other positions. A cut of 500 employees would leave BRP with an employee head count of about 5,500 people, 28 per cent less than it had before the buyout.