Bombardier has reached a three-year labor agreement with the Unifor union representing its workers in its Toronto facilities, where it produces the Global business jet family and the Q400 turboprop. The agreement was reached and over the weekend prior to a potential strike deadline that was averted. The agreement with locals 112 and 673 was ratified by the rank and file in a weekend vote.
This is an important agreement for Bombardier, as it is selling its Downsview property and will be moving its production lines to a new site at Pearson airport. The transition to a new facility provides an important opportunity for Bombardier to re-engineer its manufacturing processes to take advantage of new technologies and streamline the assembly of its aircraft, which will reduce costs and improve margins over the longer term.
The Toronto operations represent a substantial portion of both business jet and regional aircraft revenues. While Bombardier is Quebec-based, it maintains a significant presence in Ontario, as evidenced by this labor agreement that covered 2,100 employees. Maintaining aircraft production in Ontario ensures that the company cannot be viewed simply as a “Quebecois” operation.
The Bottom Line
With a new labor agreement now in place, management can focus on the facility transition and upgrade as well as marketing for the aircraft manufactured there. This includes the new Global 5500 and 6500 models that join the Global 7500 (formerly 7000) as well as the Q400, which has had a resurgence, particularly in the African market where its speed, range, and ruggedness are well suited to market needs. The move, and facilities upgrade, will better position Bombardier for the future, with the sale of Downsview providing the cash flow to fund those upgrades.