
Bombardier to Cut 7,500 More Jobs Through 2018, Most in Rail - upen
http://www.nytimes.com/reuters/2016/10/21/business/21reuters-bombardier-jobs.html?partner=rss&emc=rss&_r=0
======
mabbo
> Chief Executive Officer Alain Bellemare said he did not expect the job cuts,
> which include 1,500 workers in Quebec and 500 in the rest of Canada, would
> affect the company's talks with the federal government over a $1 billion
> investment in its CSeries jet program.

"Hey Federal Government, we'd like you to help us out to the tune of a billion
dollars, because we're such a big important employer here in Canada... also,
we're going to slowly stop being such a big employer"

~~~
gok
I don't think this is inconsistent at all. They're laying off mostly people in
their rail division, which is based in Germany and doing poorly. They're
asking for some government support for the aerospace group, which is based in
Canada and doing ok, but facing lots of competition from Airbus and Embraer,
which also receive government support.

~~~
tormeh
I wonder why governments subsidize production of commercial airliners so much.
There are no network effects or lock-in, so there is nothing to milk after
you've gotten big, just more need for subsidies.

And jet fighters etc. are usually made by different manufacturers altogether,
except for military freighters.

~~~
xenadu02
There is no Minimal Viable Product for commercial airliners. Either they fly
with as close to 100% reliability as possible or almost no one will buy them.
The cost to an airline of even a single crash is way more than they could ever
hope to save by buying from some unknown maker. It's also a massively capital-
intensive business.

It isn't impossible that new competitors will emerge but it will be a long
difficult road.

~~~
dredmorbius
There's not an MVP for a superjumbo, but you could start with UAVs, small
planes, and start scaling up.

The design challenges (and off-the-shelf parts) for smaller aircraft are more
viable.

Alternatively, you could start by building subsystems and expand to full
aircraft.

~~~
Gravityloss
The trend has gone the other way though. Companies like Wright, Curtiss,
Martin Baker and Vought did complete aircraft but ended up doing subsystems.
The aircraft and development projects have grown. The market has matured to a
few big players. If you look at the A350 construction videos, you get a little
glimpse of the massive investment required just for that part. New
technologies like vacuum infused out of autoclave composites might simplify
manufacturing a lot though. IIRC Sukhoi Superjet uses them.

~~~
dredmorbius
Wright got into the business prior to its significant maturation, as I recall.

I suspect you could divide the industry at some arbitrary point and argue
signifibant maturity by then. 1950, 60, or 70 depending on whether you're
considering manufacturers, technology, or airframes, by and large.

Consolidation does seem to be a very strong trend, and one that may prove
difficult to reverse.

------
cstavish
In 2014, while in college, I did a co-op rotation at the Bombardier
Transportation facility in Pittsburgh, PA. The rail division may be based in
Germany, but there's a sizable rail engineering contingent in Pittsburgh. I
worked with a lot of good people and engineers there--I hope they do alright.
Even in 2014 there was grumbling by the engineers about upper management, and
I remember attending an "all-hands" meeting where a visiting executive talked
of belt-tightening. In a fairly tone-deaf delivery, he spoke of limiting his
own business-class international travel.

~~~
tormeh
>In a fairly tone-deaf delivery, he spoke of limiting his own business-class
international travel.

I am reliably informed that business travel sucks donkey ass, (almost)
regardless of class. It's tone deaf because travel has positive connotations
to most people, not because he's out of touch with reality. To a business
traveler, economy class is adding insult to injury.

~~~
totalZero
I am reliably informed (by Kayak) that the cheapest direct flight from JFK to
Heathrow, one week from today, costs $901 in economy class on British Airways,
while the cheapest business class ticket costs $5451 on Virgin Atlantic.

The saying "A fool and his money are soon parted" extends to corporations,
too.

------
enjoyitasus
Can't say no one saw this coming. They continue to build products not on time
and not on budget.

~~~
JoelBennett
It seems like they've been having financial difficulties for the last 10-20
years. It's almost like they are the Radio Shack of trains/plains/snowmobiles.

~~~
peterb
They have horrible management, which is where the "layoffs" should happen.
They have great engineers, skilled craftsmen, workers, etc., but the upper
ranks and board of directors are full of patronage and incest.

~~~
mmastrac
I think a more appropriate final word here would be "nepotism".

~~~
AtheistOfFail
You're right, the company is full of nepotism and incest.

------
gaur
There are hundreds of millions of people in North America. Why do people act
like gaining or losing a couple thousand jobs is some kind of earth-shaking
development? I get that losing jobs sucks for the people involved, but
sometimes I even see US jobs reports delivered as breaking news in national
newspapers. Why?

~~~
asimuvPR
Firing people has an exponential effect.

~~~
gaur
Whatever that means.

~~~
asimuvPR
It means that when you fire one person it affects many more. When you fire
7,500 there are thousands more affected.

~~~
gaur
Still uselessly vague. Who is affected? How are they affected? How did you
determine the effect is exponential as opposed to, say, logarithmic or linear?

------
lefstathiou
There is a lot of value and scale at Bombardier. What is likely to happen is
some private equity firm will form a syndicate and purchase the company - cut
it into pieces, slash management, remove the fat etc. It will be a 3-5 year
process.

Worth highlighting I am not saying this with disdain for the private equity
industry. One of its intanigble benefits is that it serves as an agent of
dramatic change for companies and industries - change that cannot
spontaneously occur for public or government owned institutions (e.g. the post
office). Will be interesting to see how this plays out long term...

~~~
ConfuciusSay02
That won't happen, because the Quebec government will not allow it.

~~~
omouse
Because canadians are risk-averse. Hence why only the banks have been
continuing to make money; they even invest in each other to keep the risk-
averse cycle going.

~~~
ConfuciusSay02
It's also due to, in the case of the Quebec government, nationalistic
sentiment.

It's a difficult balance to strike - keeping and supporting high tech
manufacturing, while trying to remain competitive. I think at the moment, the
government intervention (blocking suitors and direct investment) is in fact
doing more harm than good, but perhaps they know better - I have no knowledge
of how competitive the C-Series really is or not.

~~~
dpc59
The liberal party of Québec isn't very nationalistic, it's mostly that they
have very deep ties to the Beaudoin family that has inherited Bombardier from
their parents without having the competency to manage it. And our government
is in the hand of corporations since we still have colonial institutions, so
they spend our tax dollars on free loans that will never be paid back.

~~~
ConfuciusSay02
Thanks for the info. I guess it's simply nationalistic window dressing for
run-of-the-mill corruption.

------
douche
Bombardier is a weird company. It's one of those huge conglomerations that is
in multiple lines of business, like some of the Japanese consortiums. This
article mentions their aerospace and rail lines, which I wasn't even aware of;
their more visible business, as far as I know, is in ATVs, snowmobiles, and
jetskis.

~~~
dsjoerg
Visible to who? I only know of them because I ride in subway cars they made.
[http://www.bombardier.com/en/transportation/products-
service...](http://www.bombardier.com/en/transportation/products-
services/rail-vehicles/metros.html)

Nobody rides ATVs, snowmobiles and jetskis. Everyone rides the subway.

~~~
douche
I've never ridden in a Bombardier subway car. I have driven a Bombardier
snowmobile.

~~~
doobiedowner
I've done neither, but I _have_ peed myself on a Bombardier made prop plane
flying in turbulence.

~~~
wott
So now you have a goal in life: to try it on a snowmobile.

~~~
yongjik
...Peeing in a Bombardier snowmobile flying in turbulence?

~~~
Gravityloss
Lake ice with shallow snow dunes is great for a little snowmobile flight
practice.

If only the machines weren't so damn noisy. They are a real terror to the
environment.

------
michaelcampbell
I initially thought that the number of bombardier jobs (as in, the guy who
drops bombs from a plane) was being reduced by 7500. I was shocked there were
that many.

~~~
ovrdrv3
Hey, that's better than my initial reaction, I thought the title was talking
about Ruby on Rails developers

------
cjdkcnsnd
And in a few years expect to read "Bombardier to Cut 7,500 Additional Jobs
Through 2023." Such is life in a demand-limited economy, where the more
companies cut jobs and pay, the more their profitability and the larger
economy suffers, and the more they further cut jobs.

~~~
arethuza
I remember the team I was in at the time being told in 2008 by a senior
executive of the large industrial company I was at that the prevailing
management consulting view on how to survive a recession was to "cut quickly
and cut deep".

He then went on to explain that the management team were surprised at how
quickly orders from customers were drying up.

Pointing out that if everyone was cutting quickly and deeply then it's hardly
surprising that demand dries up seemed a potential career limiting move so I
kept quiet.

~~~
Declanomous
In my experience, working at a company where independent thought is career
limit is soul crushing.

~~~
arethuza
Actually it was a very good place to work - lots of extremely smart people,
which is probably why I remember the apparent failure (or unwillingness) to
make that inference.

~~~
lmm
Maybe they were aware of it. There's still no way a small or even large
company can change the dynamics at play. Government can sometimes change
things by deficit spending on infrastructure, but that's a tough sell to
voters somehow.

~~~
DominikR
> Government can sometimes change things by deficit spending on
> infrastructure, but that's a tough sell to voters somehow.

Because it is not free market economic activity governed by real demand. It is
just government officials deciding to use other peoples money to create demand
in certain sectors.

If people in a community pooled their own money together to build a new bridge
then you'd have economic activity that is created due to real demand and there
would be a real incentive to make sure they are not overpaying or that their
money is wasted.

But when the government does it you end up building natural gas filling
stations in Afghanistan for millions of dollars servicing a total of 3 cars
running on natural gas in that country which on top of that has to be rebuilt
multiple times because the Taliban bomb it again and again.

~~~
lmm
> If people in a community pooled their own money together to build a new
> bridge then you'd have economic activity that is created due to real demand
> and there would be a real incentive to make sure they are not overpaying or
> that their money is wasted.

Isn't people in a community pooling their money together what a government is?
Often the increase in property values alone is more than the cost of building
the bridge, the difficulty is co-ordinating them.

~~~
DominikR
Ideally yes, but practically it more often than not isn't, especially if it's
the federal government that decides.

If governments owning and directing whole economic sectors truly was an
efficient way to manage an economy then Socialism (government demand driving
the economy) would've beaten Capitalism (private demand driving the economy)
easily and by a long shot.

It didn't just fail being more efficient than Capitalism, it even consistently
ended up impoverishing and corrupting any nation that tried implementing it.

------
based2
[http://www.reuters.com/article/uk-france-alstom-
idUKKCN11K1W...](http://www.reuters.com/article/uk-france-alstom-
idUKKCN11K1WB)

------
gnipgnip
I'm surprised they couldn't find a buyer over in India (and still keep the
engineers on board).

~~~
noisy_boy
Considering the significant push for high-speed train infrastructure in India
(and the fact that train is the main mode of long distance travel for a
majority of Indians), I'm also surprised that didn't focus more on India (or
maybe they did and it didn't pan out, I don't know).

------
geff82
Hope I can still buy my later bizjet there :D

------
omouse
Bombardier should probably be split up into multiple smaller companies and
taken off the public's $$$. I've paid taxes and I'm pretty sure most of my tax
dollars are just getting thrown at Bombardier.

------
mtgx
Time to invest in hyperloop technology? With robotized cars and cheaper and
cheaper air travel, rails are becoming a thing of the past.

~~~
gnipgnip
In the US, passenger rail has always been neglected. This is not uniformly the
case around the world.

~~~
coredog64
Passenger rail is subsidized where it does the most good (mainly the Northeast
US) and ignored where it won't.

Rail traffic from CA (or WA or OR) to the east has to deal with this
insignificant barrier also known as the Rocky mountain range. Passes through
the Rockies are frequently as high as 4000 feet and feature exciting twists
and turns. It isn't impassible to rail, but it doesn't lend itself to the type
of high speed rail that can compete with air travel.

