Bombardier Layoffs Looming?

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Analysts are predicting Bombardier will announce layoffs and production slowdowns this week as part of its quarterly reporting. The Montreal-based company is doing well with its business jet division but has seen only a trickle of orders for its regional airliners this year. There were no orders in Q2 and only five in Q1. The order backlog is also creeping down and is at an uncomfortably low 11 months for the Q400 line and a slowdown has already been put in place at that operation. The CRJ line backlog is at 18 months, the low end of the company's backlog comfort zone.

Slowing down a production line is a costly business but may be necessary. Ironically, however, a lot of airlines are getting ready to retire older regional airliners and it could be only a matter of months before the company would be forced to ramp up production. On the other hand, the business jet market is acutely affected by overall business conditions and a close eye is being kept on that market for signs of weakening.