Luxury Jet Maker Bombadier Cuts 3000 Jobs

Canadian manufacturer Bombardier (Lear Jet maker) is pulling back production rates and cutting 3,000 positions, or 10.0% of its workforce, in its aerospace division as demand for luxury private jets falls off.

Tightened credit markets and deep cuts to corporate spending have severely hurt demand for business jets, which have lost some of their original appeal since becoming a widely accepted symbol of the corporate excess that many blame for fueling the global financial crisis. "Business aircraft demand has deteriorated rapidly during the second half of calendar 2008 and is expected to remain weak for the foreseeable future," Bombardier  said, adding that it expects to deliver 25% less aircraft this fiscal year, compared with 2009's fiscal year.

The layoffs come on top of the 1,360 job cuts announced in February and will be enacted across the company's facilities in Canada, the U.S., Mexico and Northern Ireland. Severance costs are expected to total $30.0 million.

Shares of the Montreal-based company trading on the Pink Sheets gained 23 cents, or 9.6%, to $2.61, during Thursday's morning trading session.

Also on Thursday, Bombardier said fourth-quarter net earnings rose 41.7% to $309.0 million, or 17 cents, from $218.0 million, or 12 cents a share, in last year's comparable period. Analysts polled by Thomson Reuters projected a profit of 14 cents a share, which excludes non-recurring items. Sales climbed 3.0%, to $5.4 billion from $5.3 billion, surpassing the $5.2 billion in sales anticipated by analysts. Fourth-quarter sales within the aerospace division were 4.0% lower than the prior year at $2.8 billion while the transportation unit's sales were 11.6% higher at $2.7 billion.