TORONTO --
The Montreal company said it will cut 18.5 percent of the workforce at its Bombardier Transportation unit and close seven plants in five European countries over the next two years.
The moves, which will cost an estimated $777 million, are aimed at improving disappointing financial results at the division.
"This restructuring initiative is part of a three-year strategy to bring back improved margins and profitability to this company," chief executive Paul Tellier said.
Bombardier rail division's 35 plants in 16 European countries have been under pressure to improve efficiency and bottom-line results.
The train unit accounts for about half of Bombardier's sales. The other half comes from the aerospace division's regional airliners and business aircraft.
The rail division is the world's biggest maker of train equipment, with about 36,000 employees.
Last month, Bombadier hired Andre Navarri, a former executive at French train-making rival
"The urgency to move now at Bombardier Transportation has been underscored by disappointing financial results in this division in the last two quarters of fiscal year 2004," Tellier said yesterday.
Bombardier said the plants slated to close this year are in Amadora, Portugal; Doncaster and Derby Pride Park in Britain. The company will close plants in Pratteln, Switzerland; Ammendorf, Germany; Kalmar, Sweden; and Wakefield, Britain next year.
For the year, Bombardier lost $195 million, compared with a loss of $709 million the previous year.
Shares of Bombardier rose 56 cents to close at $13.90 on the Toronto Stock Exchange.
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