Restructuring the rail

Bombardier is to restructure its rail transportation business to address what it calls ‘excess capacity’ by closing seven production sites in five European countries over the next two years.

Bombardier Transportation currently operates 35 production sites in 15 European countries. It employs a global workforce of 35,600 people, 78% of them in Europe.

This year, though, the company will close its Amadora site in Portugal and its Doncaster and Derby Pride Park facilities in the UK. It’s Litchurch Lane plant in Derby, however, will be unaffected by the cuts. The company will also close its facilities in Pratteln in Switzerland, Ammendorf in Germany, Kalmar in Sweden and Wakefield in the UK in 2005.

None of the plants proposed for closing currently has work scheduled after 2005.

In North America, four sites located in Kingston in Ontario, Burnaby in British Columbia, Barre in Vermont; and Pittsburg in California have already ceased or suspended operations.

The general workforce reductions at sites around the world and site closures in Europe will affect 6,600 people.

Bombardier estimates the cost of restructuring to be $777 million, $457 million of which was recorded during the fourth quarter of fiscal year 2004, with the remainder to be recorded over the next two years.

Once fully implemented, Bombardier says that the restructuring initiative will reduce the transportation business’ costs by approximately $600 million annually.

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