Belfast Telegraph

Bombardier Belfast cuts a £25m body blow to the economy but far outweighed by plight of laid-off staff

By Andrew Webb

The announcement by Bombardier that it is to cut 580 jobs in Belfast this year and a further potential reduction of 500 next year is another body blow to the manufacturing sector in Northern Ireland and more importantly it is a devastating personal blow to over 1,000 people and their families.

When it comes to major employers in Belfast, Bombardier is what we consider to be one of our 'anchor institutions' - an organisation that has deep economic, social, cultural impact and influence in the city. Since establishing in Belfast in the 1930s as Shorts, it has become synonymous with our manufacturing heritage and is held up as a beacon of our ingenuity, adaptability and manufacturing excellence.

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More than once, Bombardier's Belfast operations have had to compete with Bombardier plants around the world for investment and contracts and it has always proven itself more than capable.

Bombardier's presence in Belfast runs deep. It is by far the largest manufacturing employer in Northern Ireland and critical for the economic and employment prospects of the city. The company accounts for about half of Belfast's manufacturing employment and so a loss of 1,000 jobs represents about 10% of Belfast's manufacturing sector.

Worse than that, the impact on incomes is, by my rough calculations, around £25m per annum. That is £25m a year that will no longer be spent on goods and services across the wider economy.

Manufacturing NI, the sector's representative body, estimates that every one manufacturing job supports another 1.5 jobs in the wider economy so extracting £25m in wages wreaks a massive financial burden on about 2,500 people and families in total.

The shock of announcements such as this inevitably prompt questions on what the long term impact might be and whether more could have been done to protect the jobs.

From the outside looking in, the delays to the CSeries, the slower than hoped for pace of orders in the face of massive competition from Boeing and Airbus, and the recent bailout by Quebec were prompting fears about the long-term security of the Bombardier jobs in Northern Ireland.

The job cuts announcement came as Bombardier reported a 40% drop in underlying profits to $554m last year. Turnover fell 9.5% to $18.2bn. Revenues are set to fall further this year, to $16.5bn-$17.5bn.

On the basis of these numbers, the Belfast job cuts do not necessarily reflect on the efficiency or skills of the Belfast plant, nor do they point towards a wider fundamental malaise in Northern Ireland's ability to have a successful manufacturing sector.

Rather, it is a deeply unfortunate fact that Bombardier has invested phenomenal amounts of money in a product that it is struggling to find customers for and as a result it now finds itself having to resize its global operations. Hopefully, the steps they have taken to restructure the business will result in a more stable environment for the remaining staff and ultimately lead to a recovery that produces new employment opportunities in future.

  • Andrew Webb is an economist and managing director of Webb Advisory

Belfast Telegraph

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