Business

Bombardier's financial woes mount in Belfast as Stormont rejects manufacturing strategy

Losses in the last year at Bombardier have wiped out a decade's profits, the company said
Gary McDonald Business Editor

THE extent of the financial woes gripping one of the north's largest and longest-established manufacturing firms Bombardier was laid bare on Monday when it revealed that its current losses in Belfast over the last 12 months have wiped out any profit it made in the last 10 years.

Figures filed on Monday on behalf of Short Brothers - the name of the aerospace firm before taken over by its Canadian parent - revealed pre-tax losses of $339m (£234m).

Its overall operating loss in 2015 was £194.6m compared to a profit of £73m a year earlier,and included an impairment of £248m relating to a write down on the long-delayed C Series, which was nearly £1.5 billion over-budget at its launch.

The company admitted: "This loss represents one of our worst-ever financial periods, and effectively negates any profit the company has made this decade.

The losses reflect "write-downs" on the CSeries aircraft programme, the wings for which are made at the east Belfast plant.

This has proven to be one of the most challenging and demanding years in the century-plus history of Short - and the difficulties are likely to continue as Bombardier is faced with ongoing global competitiveness issues influenced by market conditions.

The company is currently in the process of a significant downsizing of its workforce, with 360 staff, both core and temporary, already left.

A total of 1,000 people are to be axed from its 5,000-strong Belfast workforce between now and the end of next year, in line with total global job losses of 7,000, as the the Belfast operation "actively contributes" to the global efforts to improve competitiveness, drive down costs. and boost cash flow.

The company said it was striving to win new contracts, but it has been difficult to identify suitable new business.

But amid the gloom there was a significant boost for Bombardier when it received certification of its new C Series narrow-bodied passenger jet, and the CS100 has now started the ramp-up to full production.

And the Global 7000 business jet - in which Belfast researches, develops and tests key aero-structures - has also started structural testing.

It is scheduled to enter into service in the second half of 2018 and will "should provide strong growth" from 2019 onwards.

In a statement accompanying the accounts, the company said that Belfast "remains a core site for the design and manufacture of complex composite and metallic structures, including wings, fuselages and engine nacelles, and after-market support".

It added: "We must continue to focus on our unique capabilities to optimise our manufacturing footprint and performance, regain competitiveness, and thereby secure the future success of the business."

The Shorts financials came as the Stormont Assembly rejected calls to introduce a manufacturing strategy to re-industrialise Northern Ireland.

Economy Minister Simon Hamilton said: "I am not convinced it's the right thing."

He said the perception that the industry was in the doldrums did not fit with analysis of performance, adding: "Whether it is jobs, sales, exports or output, our manufacturing sector is performing very well."

That comes despite the recent closure of some of the north's biggest employers such as the JTI Gallaher cigarette factory and Michelin tyre plant in Ballymena as well as the loss of hundreds of jobs at Bombardier and Seagate.

Manufacturing - which generates annual sales of £20 billion, employs 85,000 people and supports 214,000 in the wider supply chain - should be included in an overall economic strategy, he said.

SDLP MLA Sinead Bradly said: "At a time when Europe openly seeks to re-industrialise, members have yet to grasp the significance of needing a specific manufacturing strategy.

"I find it regrettable that, in my maiden speech, I have to try to convince others that a real need for a dedicated manufacturing strategy exists. I would have much preferred my contribution to have focused on the ambitions of that strategy."

Davy Thompson, regional coordinator with the union Unite, said the Assembly had "missed an opportunity".

Enjoy reading the Irish News?

Subscribe now to get full access

Business