Canadian aircraft manufacturer Bombardier (TSX: BBD.B) has announced the sale of its factory in Northern Ireland following a decision to concentrate its aviation activities in North America.
In further evidence of the negative effects that Brexit is having on industry, Bombardier will consolidate its production to plants in North America.
The announcement was included in the company’s first quarter financial results, released on 2 May 2019. Alain Bellemare, President and Chief Executive Officer, Bombardier Inc. said, “We will focus our aerostructures activities around our core capabilities in Montréal, Mexico and our newly acquired Global 7500 wing operations in Texas.”
Bombardier announced the creation of Bombardier Aviation, which will consolidate its aviation business into a single business unit, headed by David Coleal.
The company employs around 3,600 people in Northern Ireland in plants at Belfast, Newtownabbey, Newtownards and Dunmurry. The company’s Moroccan operation is also being sold.
Bombardier was making wings for the Airbus 220 regional aircraft, then named the Bombardier C-Series. The aircraft was renamed after Boeing filed an anti-competition lawsuit against the Canadian company that ended with tariffs adding to the cost of the C-Series.
Airbus then bought a 51 percent stake in the aircraft, renamed it the Airbus A220 and completed construction of the aircraft at its plant in Mobile, Alabama, thereby making it a locally produced aircraft, free to be sold in the U.S.
There was no mention of Brexit in Bombardier’s statement, but the British newspaper The Guardian reported, “efforts to find a buyer willing to invest in the plant could be complicated by uncertainty about tariffs and customs arrangements between the U.K. and the European Union. Airbus, which might have been seen as a potential buyer, has voiced grave concern about the impact of Brexit on its investment in the U.K.”
In its first quarter results Bombardier reported earnings before interest and taxes of $171 million on revenues of $3.5 billion. The company expects a 10 percent year-over-year growth for full-year 2019 compared to 2018.
Reported earnings, including the $516 million sale of the company’s training business, were $684 million for the first quarter. Full-year 2019 revenues are expected to be $17 billion.