By Jamie Barrie W hile the rhetoric runs wild in the US election campaign about Wall Street sending America’s jobs to low wage nations like Mexico, a similar pre- dicament is emerging quietly in Canada. The difference is that the Canadian federal and Quebec provincial govern- ments are investing billions in the company behind it. Bombardier announced recently it would slash 7500 jobs worldwide to improve their strength and competitive- ness by the year 2020. Under this reduction plan, 2,000 Canadian jobs will be eliminated with 1,500 of those disap- pearing in Quebec. This is the second such cost control move in less than a year. It was only in February of this year that Bombardier eliminated an additional 7,000 paychecks. The company refused to describe the February changes as offshoring jobs to Mexico and other countries. Instead, Bombardier called the move relocating some “work packages” from Canada and other regions to lower cost wage areas. The move was poorly received by many and questions surfaced about the ethical correctness of layoffs by Bombardier after receiving billions of dollars in government assistance to keep jobs in Canada. At the time spokesperson Haley Dunne stated “just because a work package or certain tasks are being trans- ferred to another Bombardier site in another country doesn’t mean that we don’t have plans to hire and continue to build our workforce here.” Now, with the second round of layoffs, that sentiment is lost on many. The firm’s Mexican operations have increased six-fold to more than 1,800 since 2006 and will undoubtedly continue to grow under this strategic corporate direction. The latest announcement has also left many watching the move puzzled about the wording and tone of the work- force changes. Instead of a straight outsourcing arrange- ment, Bombardier is quick to point out this work will remain within their organization at their Mexican opera- tion. Their release states there will be 7500 worldwide layoffs but also mentions offsetting job losses with a stra- tegic and selective hiring of 3700 new global positions. Bombardier CEO Alain Bellemare stated the new jobs will be added in low cost countries and more established high-cost operations. The company has been under- performing because a spending plan on new aircraft that has been hard to maintain, decreased demand for some products and challenges in sales of railway con- tracts. There are also pension fund issues that need to
be addressed. The workforce changes are being rolled out to
deal with these problems and others hurting the competitiveness of the firm on critical contracts they need to stay profitable. Earlier this year the union representing employees in Montreal noted jobs have trickled to Mexico from Northern Ireland, Toronto, Montreal and Wichita, but the media hasn’t given it much attention. Dave Chartrand, representative of the International Association of Machin- ists and Aerospace Workers, said “it’s always going to be a concern because we never know how fast it’s going to shift. Right now, it’s trickling, but the valve can open any time where big units end up leaving and that creates a lot of job loss.” Of greatest concern to those working in Quebec is the investment that province has made in Bombardier. The company received a $1-billion USD investment in the new CSeries development from the Quebec government. Additionally, Quebec’s pension fund manager, the Caisse de depot, bought 30 percent of the Bombardier Trans- portation division. The biggest issue on the table presently is a request from Bombardier for a $1 billion-dollar handout from the Trudeau government. The rest of Canada is watching closely to see if Ottawa is prepared to reward the firm with a lifeline despite the fact they are sending Canadian jobs to Mexico. Federal Innovation Minister Navdeep Bains has all but committed to the deal saying the only thing left undecided is how it will be done. If Canadian firms see large federal handouts for firms offshoring Canadian jobs, the consequences may be problematic for the Canadian worker. Bombardier appears poised to double dip in the pool of taxpayer capital available to them while they restructure. When announcing their planned strategic hiring of 3700 jobs at low wage cost facilities and established plants the company asserted those positions would in part be based on providing rail contracts to customers like the Toronto Transit Commission and Metrolinx. In the 2016 federal budget the Trudeau government announced the creation of a $3.4 billion Public Transit Infrastructure Fund and named replacing subway cars and other fleet purchases for the Toronto Transit Commission as a primary project. The TTC already uses a modified version of the Bombardier Movia subway car throughout the fleet of nearly 500 cars. Bombardier manufactures and sells the line globally.
17 NOVEMBER 2016 • SPOTLIGHT ON BUSINESS
Made with FlippingBook - Online magazine maker