Toronto's transit agency is putting together a legal case for "tens of millions" of dollars in damages against Bombardier Inc. and starting to look at other suppliers in case the troubled streetcar maker is unable to finish the city's much-delayed order.
The Toronto Transit Commission has become increasingly frustrated as Bombardier's Thunder Bay plant missed one target after another for the delivery of 204 new streetcars. The company has been bedevilled by production problems and acknowledged in recent weeks that it would fall short again. Its latest pledge: The city will have only 16 new vehicles by the end of the year, less than one-quarter of the number originally promised.
"It's beyond ultimatum, we're starting legal proceedings," TTC chair Josh Colle said after the board on Wednesday unanimously passed a series of measures targeting Bombardier. "We've had enough excuses."
Besides pursuing legal action, the board wants the province to help put pressure on Bombardier; the CEO of the company to appear at the next TTC meeting to explain his company's shortcomings; TTC staff to opine on Bombardier's corporate outlook; and staff to look into other possible suppliers for the streetcar fleet.
The last item is the most attention-getting but at this point largely theoretical. Bombardier is already well behind on its delivery and further delays do not appear to be enough to trigger a change of supplier. Instead, Mr. Colle said, this part of the motion was about not being "caught flat-footed" if the company went under or was otherwise unable to finish the order.
"Bombardier has to know we're serious about what we're doing," explained TTC commissioner and deputy mayor Denzil Minnan-Wong.
"They've chewed through seven project managers for this project and, you know, they're going through their eighth. We don't have an alternative plan, so the question is: Is Bombardier ever going to deliver those streetcars? And if they're not, what are we going to do about that?"
The board also called for staff to consider accepting additional streetcars as compensation for legal damages and late penalties.
"At the end of the day, I don't want the money. I want these streetcars," said TTC chief executive Andy Byford, who noted that the city had already been pondering the purchase of more of the $6-million vehicles.
In a statement late Wednesday afternoon, Bombardier said that it would neither comment on the TTC board's actions nor make "any speculation on potential impacts" on their operations in Ontario.
"Bombardier's commitment to ... its customers remains as strong as ever," the company said in its statement. "On the issue of the TTC's claim, we must remind that not all delays in this project have been caused by Bombardier, and we intend to discuss this with our customer."
The order to replace the city's aging fleet of streetcars dates back to 2009 and is due to be delivered fully by 2019. Delays have variously been blamed on the complicated design and engineering of the streetcar ramps, quality issues at Bombardier's plant in Mexico and labour problems.
Under the terms of the contract, the TTC can seek a late penalty of 5 per cent of the purchase price; this amounts to about $50-million and is now being pursued. The legal claim is separate from that and is related to costs incurred by the TTC as a result of the streetcars not arriving. While an exact figure for the damages has not been specified, Mr. Colle pegged it in the "tens of millions."
The vote at the board came after salvoes of bitterness and disappointment – presaging the likely reception for Bombardier's CEO, should he choose to appear.
Councillor and TTC commissioner Glenn De Baeremaeker called Bombardier's actions "pure incompetence" and said he would expect better service "if I went to a falafel truck."
Fellow commissioner Alan Heisey, while praising the long Canadian history of the firm, called it "terrible that it's come to this."
"Bombardier has to restore confidence in their brand," he said.