Bombardier’s transport management is in the firing line as a strike in Canada adds to its misery after losing a £1.4-billion (€1.6-billion) contract to build 1,200 rail vehicles to Siemens AG of Germany, one of their most influential competitors in the rail business.
In Canada, 700 employees at Bombardier Inc.’s plant in Thunder Bay, Ontario walked off the job after failing to reach a new labour pact with the manufacturer on Tuesday 9th August 2011.
Bombardier Transportation’s plant in Thunder Bay, on the shore of Lake Superior in north-western Ontario, builds lightweight rail and mass transit vehicles including those acquired by Toronto Transit Commission for its subway, light rail, and GO train services with the first vehicles currently expected to be delivered in 2013 under the $1.2-billion contract.
The Canadian Auto Workers (CAW), which represents the striking workers, advised the company earlier in the week, informing Bombardier that they would go on strike on Tuesday 9th if a new labour agreement could not be reached by then.
The CAW employees have been working without a contract since May 31, 2011.
Bombardier has a full order book with approximately 8 years worth of work at the plant. However the company believes that as rail transportation is more competitive than ever they need to reach a deal that will enable Bombardier to remain competitive.
Bombardier’s train division backlog of orders sat at $34 billion, or roughly 61 per cent of the company’s overall backlog of $55.1 billion that includes a new $41-million contract that was secured last month to build bi-level rail vehicles for Orlando, Florida.
Both sides said they intended to keep the lines of communication open, and were ready to returning to the negotiations to work towards a deal.
However, with such a large backlog Bombardier is under pressure to maintain production and customer loyalty.
In Britain Bombardier on Tuesday 11th July 2011 announced that it plans to severely cut production at its British train-building plant, famous for its manufacturing and dominance of the rail sector for over two centuries.
The decision came when Bombardier lost a £1.4-billion (€1.6-billion) contract to build 1,200 rail coaches for southeast England’s substantial Thameslink rail project. The winner was Siemens AG of Germany, one of Bombardier’s most influential competitors in the rail business.
Bombardier has owned the manufacturing facility since 2001; however, trains have been made at the Derby site since 1839, putting it at the centre of Britain’s industrial transportation revolution. Bombardier originally bought the Derby plant from Adtranz, the former rail division of Daimler Chrysler.
The Derby plant employs 3,000 people but its future is now in serious doubt as Bombardier’s contracts to produce trains for National Express East Anglia, London Midland, and London Underground’s Victoria line should be finished in September that would leave the Derby plant with only one contract to produce underground trains for London Underground.
The fear is that companies that supply Bombardier in the region could face problems and that more than 1,100 jobs would be lost in the supply chain.
Although Chris Williamson the local Labour Member for Parliament has gathered 50,000 signatures on a petition calling for the decision to be reversed the government and says it is inhibited by European Union laws that do not allow for social concerns to be taken into account. However, Both Germany and France major suppliers of trains, light rail and trams protect and subsidise their manufacturers, which can be detrimental to competitors not able to bid on a level playing field.