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Clouds gather as plane maker Bombardier faces train hitch

By Yvette Shapiro

Published 20/10/2015

Bombardier may face legal action over delays in delivering trains to Toronto Transit Commission
Bombardier may face legal action over delays in delivering trains to Toronto Transit Commission

Problems are mounting for the Canadian plane and train maker Bombardier, which employs 5,500 people at its aircraft plants in Belfast.

As the company struggles to find orders for its CSeries jet - already three years late and £1.2bn over budget - it's now facing the possibility of legal action in Toronto over a delay in delivering trains to the city authority.

The Toronto Transit Commission (TTC) is furious at the hold-up, which is not the first problem to hit the £625m contract. In a statement, TTC said: "There are just 10 new streetcars available for service in Toronto today. Based on the original contract schedule, 67 of 204 new streetcars on order should be serving TTC customers. Bombardier is stating the TTC will now see a total of just 16 streetcars in-service at the end of 2015. Given Bombardier's failure to meet past commitments, the TTC has no confidence in this latest schedule."

TTC added that its chief executive, Andy Byford, is recommending that the board now bring forward a deferred staff report regarding "future sanctions" that may be levied against Bombardier.

The statement said: "TTC staff will also recommend to its board that it commence legal action, or make a claim allowed for already in the contract, of $50m (Canadian dollars) for late delivery.

"The TTC will also seek damages for maintenance and overhaul costs of the existing streetcar fleet; service and customer impact costs, such as supplementing streetcar routes with buses; and TTC staff time that has been expended on this matter, and will continue to be expended."

TTC said the streetcars in service already are performing "exceedingly well", but the chair, Josh Collie, was highly critical of Bombardier. He said: "I am incredibly disappointed to learn that Bombardier, yet again, will not be meeting their commitments to deliver new streetcars to Toronto.

"They have let down the TTC, our customers, the good workers in Thunder Bay, and all Toronto residents. We will not let Bombardier's incompetence hold our patient and loyal customers hostage. We will consider all legal and financial actions at our disposal to address this situation."

Bombardier blames "crimping of electrical connectors" at its Mexican plant. It apologised for the latest delay and said it would add extra shifts to speed up delivery.

Meanwhile, Reuters is reporting that Bombardier's plans to sell a minority stake in its rail unit via an initial public offering (IPO) in Germany have been put on the back burner and any listing may now only occur in the second quarter of next year.

A Bombardier spokeswoman told Reuters the company still intends to file its IPO documentation before the end of 2015, but the timing of any IPO would be contingent on market conditions. An IPO or sale of a stake to another investor would help the firm to raise cash to tackle cost overruns in its CSeries jet programme.

Bombardier has said it is in talks with airlines in North America and Europe about possible new orders for the jet and remains totally committed to the CSeries, whose wings are being made in Belfast.

Belfast Telegraph

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