Bombardier Inc. is lightening the workload on its passenger rail-car plant in Thunder Bay in an attempt to speed up delivery on a problem-plagued contract for new streetcars in Toronto.
The company confirmed Thursday that it will shift production on one of four contracts the plant is currently executing to another facility in Kingston – specifically, its $770-million contract with Ontario's regional transit agency Metrolinx – as of October.
The thinking is that will free up the Thunder Bay plant to focus on the $1-billion Toronto Transit Commission streetcar order, which will help accelerate the pace of delivery of the vehicles starting next year, Bombardier says. "We know it's a tough time for the TTC because of the delays, the late deliveries," said Marc Laforge, a spokesman for Bombardier. "So we're taking the measures that need to be taken under the circumstances.… Things will be coming pretty fast starting in 2017."
The company reaffirmed that it will have delivered about 31 of the low-floor mass-transit vehicles to Toronto by the end of the year, half of what it originally promised. Under a revised schedule shared with the TTC on Wednesday, it is pledging to deliver a further 40 vehicles in 2017, 76 in 2018 and 57 in 2019, for a total of 204.
The move at Thunder Bay is just one of what will likely be several production changes at Bombardier as the company tries to sort out problems with a streetcar deal that has angered public officials and blackened its reputation in Canada's biggest city.
TTC chair Josh Colle said on April 27 that he wanted to see the train maker take tangible steps to fix the problems before the federal government considers providing any public money to the company as part of the $1-billion investment request currently being evaluated by Ottawa.
Bombardier has already said it will add a second assembly line for the TTC project, and is expected to confirm the location of that line by the end of the month, Mr. Laforge said. The company has also said its assembly site in La Pocatière, Que., will pitch in on the TTC contract with work on the vehicle underframes.
Union officials with Unifor in Thunder Bay have pinned some of the blame for problems with the TTC contract on Bombardier's Mexico operations, saying components built in a facility there have often been of poor quality. Mr. Laforge declined to provide a detailed explanation on the specific reasons for the delays.
Chris Murray, an analyst at Altacorp Capital Inc., said he's not concerned that the issues Bombardier has experienced with the TTC contract could signal a broader operational problem at the Berlin-based train unit.
"I think they'll continue to work through the issues," Mr. Murray said. "There are contracts from time to time which technically become very challenging. I think that also [plays into] the discussion around bidding what would generally be considered immature designs and develop them in manufacturing."
The Thunder Bay facility employs about 1,100 workers carrying out four separate contracts: the TTC streetcar deal; a 182-vehicle light-rail car order for Metrolinx; new bi-level cars for GO Transit; and another TTC agreement for new subway cars. That last contract is expected to be completed by the end of this year.
About 60 jobs will be eliminated at the Thunder Bay plant as work gets shifted to other Bombardier facilities, Mr. Laforge said. The company will add to its 300-strong work force in Kingston as the Metrolinx contract gets up to speed, he said. That plant was originally slated to be the testing centre for the Metrolinx cars. It will now build those cars as well.
Bombardier order up in the air
One of the largest orders for the new Bombardier Inc. C Series plane is no longer on the company's long-term production schedule, Alain Bellemare, Bombardier's chief executive officer, said.
The Republic Airways Holdings Inc. order for 40 CS300 jets is still in the backlog and Bombardier is "working with them," Mr. Bellemare said Thursday according to reports from New York, where he gave a speech.
Republic filed for chapter 11 bankruptcy protection earlier this year, all but putting the final nail in the coffin on an order that had been in doubt long before the court filing.
For several years during the development of the C Series program, Republic's order for 40 planes and 40 options was the largest single order on the books. Air Canada and Delta Air Lines Ltd. have since surpassed that total with a letter of intent for 45 planes in Air Canada's case and a 75-plane order on the part of Delta.
Mr. Bellemare said everything is on track at Bombardier for the first passenger flight of the C Series on July 15 with Swiss International.