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Passengers board a subway car in Toronto made by Bombardier Transportation on July 21, 2011. Bombardier announced a deal to manufacture rail cars for San Francisco’s transit authority on June 14, 2012. (Fred Lum/The Globe and Mail)
Passengers board a subway car in Toronto made by Bombardier Transportation on July 21, 2011. Bombardier announced a deal to manufacture rail cars for San Francisco’s transit authority on June 14, 2012. (Fred Lum/The Globe and Mail)

Bombardier lands multimillion-dollar San Francisco rail car order Add to ...

Bombardier Transportation says it has signed a deal worth up to $1.6-billion to supply San Francisco with new rail cars, the latest in a string of major contracts signed with U.S. customers.

The Berlin-based subsidiary of Montreal’s Bombardier Inc. says it has signed an initial deal with San Francisco Bay Area Rapid Transit District for 260 new rail cars worth $647-million.

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The agreement includes a first option order for 150 cars, which the public transit provider plans to place on June 25.

The deal also includes additional order options that could bring the total number of cars ordered to as much as 775 and the total value of the order to as much as $1.6-billion.

The new cars will be used to replace San Francisco’s entire existing fleet of rail cars as well as for expansion.

The cars will be assembled at Bombardier’s manufacturing plant in Plattsburgh, N.Y.

Bombardier’s business in Pittsburgh, Pa. will supply the propulsion and control equipment.

New features include more doors and priority seating, more comfortable seats, bike racks, energy efficient lighting, interior and exterior digital displays with passenger information and improved on board security cameras.

The company said in its announcement late Thursday that delivery of 10 pilot cars is slated for the spring of 2015 and delivery of the remaining 250 cars is expected between early 2017 and spring of 2019.

“Bombardier is honoured to have been selected to build BART’s Fleet of the Future and delighted to add the San Francisco Bay Area to the list of major metropolitan regions across North America and around the world that rely on Bombardier for metro cars that offer the highest levels of quality, performance and reliability, said Raymond Bachant, president of Bombardier Transportation for North America.

The deal follows another major agreement earlier this month to manufacture 300 subway cars for New York City Transit valued at $599-million (U.S.).

Bombardier’s current North American orders also include 706 new subway cars for Chicago, 468 cars for Montreal, and 420 cars for Toronto.

Bombardier Transportation is headquartered in Berlin and has products or services in more than 60 countries. It has an installed base of over 100,000 vehicles worldwide.

Parent company Bombardier Inc. manufactures both planes and trains.

Last week, its shares surged after its aircraft division announced it had secured a major deal with one of Warren Buffett’s companies, which is poised to buy up to $9.6-billion worth of business jets and services.

Private jet company NetJets Inc. will buy up to 275 Bombardier Challenger business jets that could be worth up to $7.3-billion (U.S.). There are 100 firm orders and options on 175 more.

Bombardier said it has also signed a 15-year service and maintenance agreement for the aircraft valued at as much as an additional $2.3-billion (U.S.) if all options are exercised.

The recent influx of deals signal something of a turnaround at the company, whose shares have lost 42 per cent of their value over the past year and have not exceeded $10 in nearly a decade.

On the Toronto Stock Exchange Thursday, shares in the company, which made the announcement after markets closed, fell 70 cents or 1.8 per cent to $3.81.

Bombardier missed earnings expectations last month as its profit dropped nearly 14 per cent to $190-million (U.S.) in the first quarter on a 25-per-cent decrease in aerospace and transportation revenues.

Reporting in U.S. dollars, it earned 10 cents per share for the period ended March 31. That compared with a profit of $220-million, or 12 cents a share, in the same period a year ago.

Revenues were $3.5- billion, down from $4.7-billion last year.

 
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