Bombardier Inc. is halting production of its water-bomber aircraft as it pushes to conserve cash and get its flagship C Series jet to market.
The Canadian plane and train maker confirmed Wednesday that it will not be renewing its lease at Jack Garland Airport in North Bay, Ont., where it had been producing the Bombardier 415 amphibious aircraft since 1998. The lease officially ends in April of next year but the company was required to give at least 90 days notice, Bombardier spokeswoman Isabelle Gauthier said.
Bombardier makes the main components of the water bomber, marketed globally as the "Super Scooper," in Montreal and ships them to North Bay for final assembly and testing on nearby Lake Nipissing. Montreal employees working on the plane at a site in the Ville Saint-Laurent borough have also been reassigned to other aircraft programs.
"There's no backlog, so we had to put a pause" on manufacturing the plane, Ms. Gauthier said. "We cannot maintain a lease with an empty production line."
Bombardier built two of the fire-fighting aircraft this year but has failed to win any new orders for the plane in several months. A third plane is nearing completion and will be delivered by year-end, Ms. Gauthier said. Bombardier will continue trying to sell the 415 aircraft and build them in Montreal as warranted, she said. A team of about 60 customer-support people will remain in place to respond to any issues for existing operators.
The move is Bombardier's latest manoeuvre to better match capacity with demand and shore up cash as it works to bring its C Series passenger airliner to market. The company has already suspended its dividend, shelved its Learjet 85 program and delayed development of its new Global 7000/8000 corporate aircraft in an effort to focus resources on the C Series, which is two years late and significantly over budget. Development costs for the single-aisle airliner are now in the range of $6.1-billion (U.S.), including supplier and government funding, according to an Aug. 6 estimate by Moody's Investors Service.
Bombardier burned through a record $1.6-billion of cash in the first half of 2016 and has been weighing its options for partnerships and asset sales to help cut a long-term debt of $9-billion. That could include "exploring opportunities" for the amphibious aircraft program, Ms. Gauthier said.
The company's confirmation that it approached Airbus Group SE about a partnership in the C Series has provoked surprise among analysts, some of whom have characterized it as a desperate attempt to rescue a program that could be cancelled. "The writing is on the wall," said Credit Suisse analyst Robert Spingarn.
Bombardier has countered that it has no intention of killing the jet program. "[The company] is 100-per-cent committed to the C Series; it is coming to market," Ross Mitchell, Bombardier's vice-president of business acquisition for aerospace, said Wednesday at the ERA regional airlines conference in Berlin. The plane maker said the small C Series model, the CS100, has completed more than 90 per cent of its certification program and is now in the final stage of flight testing.
How much Bombardier will save from suspending water-bomber production is unclear. Bombardier has sold 92 amphibious planes since 1994, when the 415 model replaced the earlier CL-215. At peak, the manufacturing sites in both Montreal and North Bay employed about 200 people, including workers at external contractor Vortex Aerospace Services. "It hurts," said North Bay Mayor Al McDonald, adding that 35 people will be affected in his city.
Bombardier informed its employees of the production change back in April but did not make the information public. Among the current owners of the 415 amphibious plane are the governments of France, Italy and Croatia.
Bombardier is in talks with several customers on the C Series but was unable to secure an order from Irish European regional carrier CityJet, which announced Wednesday that it picked Superjet International's SSJ100 aircraft instead.