Belfast Telegraph

Bombardier to continue moving work away from Northern Ireland to cheaper sites

By John Mulgrew

Bombardier says it will continue to shift work away from Northern Ireland to keep cutting costs amid an "extremely challenging year" as the aerospace giant returned to profitability.

The Canadian-owned company posted a pre-tax profit of $79.2m (£63.84m) in 2016 at its Northern Ireland operations. Last year, a decade of profits at the Belfast operations were wiped out.

"Our key focus over the short to medium term remains to deliver on major cost reduction initiatives for current sustaining programmes, and programmes under development," it said in accounts for Short Brothers Plc.

"We have a continuing plan in place which focuses on reduction of procurement costs, labour efficiency and the transfer of certain uncompetitive activities to sister sites in Mexico and Morocco, and our supply base."

The confirmation comes after the Belfast Telegraph revealed in August that the company was moving some operations away from Northern Ireland. The firm, which employs around 4,500 in Belfast and other smaller sites, also says it will "continue to investigate the outsourcing of certain administrative and other activities which are not core to our long-term business strategy".

It said it had been an "extremely challenging one (year) for our Northern Ireland operations". Bombardier's cutting of 1,080 staff across Northern Ireland meant it dealt with severance charges of $50.1m (£40m) during the last year.

Turnover fell from $919m (£740m) in 2015 to $871m (£702m) in 2016, according to its latest accounts.

In the accounts, the company says that despite "challenges" during the year that "excellent progress was made on the CSeries". The flagship passenger jets are part-made in Belfast, with hundreds of staff working on the wings and part of the fuselage.

But it was hit by slow sales, and given a $1bn bailout by the regional government in Quebec, Canada. That was in return for a 49.5% stake in the business's CSeries programme. The Canadian government this year confirmed a $372.5m (£225m) cash injection for the company.

The firm has invested $8.5m (£6.9m) in its CSeries 'centre wing box' programme during the last year.

On the CSeries it says it is "ramping up" production. It confirms in its business review that "over 300 firm orders" have been secured for the CS100 and CS300 jets and that "customer feedback on its performance has been very positive".

The company said that non-Bombardier products generated sales of $207m (£167m), down from $303m (£244m) in 2015.

"This decrease was primary driven by a reduction on requirements from Rolls Royce and Airbus, combined with decreased revenue in relation to construction contracts," it added.

The bulk of Bombardier's revenue in 2016 came from Canada and the US - around two-thirds of sales.

It's average workforce last year stood at 4,558 staff. That's down from 4,862 a year earlier.

Bombardier said its solar panel installation - the largest of its kind in Ireland - can now produce 3.5MW hours of power. And it says that a proposed biogas power plant close to its main Belfast site will be able to provide 70% of its energy.

It said its two-year turnaround plan is on the "right on track" but there "will be more challenges to come as that plan is executed".

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