Bombardier Freezes Wages

Bombardier's CSeries airliner took its first flight Monday.
Development delays of the CSeries and the Learjet 85 are prompting tough measures at Bombardier.

Bombardier has frozen the wages of about half of its employees, clapped limits on travel and instituted various measures to conserve cash as the delays of a couple of high-profile development projects threaten to eat into its bottom line.

In an effort to insulate investors from the cost of years of delays in the CSeries and Learjet 85 programs, the company is doing everything it can to cut costs in the aerospace division. More than 38,000 employees, including those in the executive suite, are affected. The rest of its 76,400 employees are covered by contracts of one sort or another that dictate their pay.

“Meeting our profitability goals is a priority,” Bombardier spokeswoman Isabelle Rondeau said in an interview with the Bloomberg . “We’ve reached many milestones in the development of our new products, we have a substantial backlog, but now we have to deliver on our profit targets. That’s the context for these measures.”

The CSeries has missed several important deadlines and Bombardier has now stopped making promises other than that the aircraft will be a major leap in passenger/mile efficiency whenever it’s ready. The delays have pushed development costs up by more than $1 billion $4.4 billion (USD) and has enough orders (201) and options (another 200) to be profitable.

The Learjet 85 has been approved for its first test flight but, as far as can be determined, hasn’t flown yet. Both are composite aircraft and share some of the software and avionics issues that have dogged most such technological leaps.