Metrolinx, the Crown agency that manages public transit in Ontario, confirmed Thursday it has formally notified its intent to cancel its $770-million contract with Bombardier Inc. to supply light rail vehicles in Toronto.
“There have been some concerns about Bombardier’s performance as there have been significant quality and manufacturing issues that, to date, have not been resolved,” said Metrolinx spokeswoman Anne Marie Aikins in an emailed statement.
“As a result, we have taken the next step available to us through our contract,” Aikins said. “We will continue to work with Bombardier on this issue and we will deliver on our transit commitments.”
Metrolinx has expressed concerns about delays in the production of 182 light rail vehicles, which the agency ordered in 2010 to serve provincially funded light rail lines that include Toronto projects on Eglinton Avenue, Finch Avenue West and Sheppard Avenue East. Bombardier has yet to deliver any vehicles, and is currently still working on the pilot car for the shipment.
Two of those lines are scheduled to be ready by 2021. Metrolinx requires 76 vehicles for the $5.3-billion Eglinton line and 23 for the $1.2-billion Finch line. Development of the Sheppard light rail has been delayed indefinitely.
Aikins said Metrolinx could offer no further comment because it is now engaged in a legal process with Bombardier.
Metrolinx’s notice of intent does not mean it will terminate the LRV deal; it is a step that follows issuance of a notice of default in July.
Bombardier spokesperson Marc Laforge said in a written statement provided to the Financial Post that the company is “in no way in default of its contractual obligations in the Metrolinx project.”
“We don’t understand where Metrolinx is going at when talking about performance on a vehicle that has yet to run its first kilometres on track and production has not started yet,” he added.
Last week, Bombardier said it was cutting its Canadian workforce by 2,000 as part of a global staff reduction of 10 per cent, or 7,500 positions. While two-thirds of the global layoffs will come from Bombardier’s transportation division, most of those in Canada — 1,500 — will be in Quebec. The company also said that the job losses will be partially offset by more than 3,700 new hires to work on the production of its rail vehicles, the CSeries and Global 7000 business aircraft. Laforge further stated that the Metrolinx contract will create 250 new jobs in Kingston, Ont.
Bombardier said the cuts are designed to create about US$300 million in savings, and will contribute to a recovery plan it began last year to improve its profitability by 2020.
The company has struggled as demand for its airplanes has waned and production delays have hit its railway business. Besides problems with the Metrolinx delivery, Bombardier has repeatedly failed to meet its schedule on a $1.2-billion, 2009 order for 204 streetcars from the Toronto Transit Commission.
“They’ve delayed, delayed, delayed, but the end date doesn’t shift,” TTC chief executive Andy Byford said in September, noting that the company has until 2019 to provide the full fleet. “They’re going to have to up their game.”
However, the delays in its own LRT purchase didn’t stop Metrolinx from placing a $428-million order with Bombardier in August, this one for 125 commuter rail cars for its Go Transit lines. The purchase was an extension of a 2014 deal for 65 rail cars and now totals $685 million.
Liberals ready to invest in Bombardier, minister says
Innovation Minister Navdeep Bains has announced up to $54 million in funds for a Bombardier-led aerospace-research consortium.
Innovation Minister Navdeep Bains' comments about the investment are the clearest the Liberals have been about whether they’ll accept the Montreal-based company’s request for $1 billion in federal funding. (ADRIAN WYLD / THE CANADIAN PRESS) By PIERRE SAINT-ARNAUD Tues., Oct. 11, 2016
https://www.thestar.com/business/2016/10/11/liberals-ready-to-invest-in-bombardier-minister-says.html
MONTREAL—The federal government investing in aerospace giant Bombardier is not a matter of if but how, Innovation Minister Navdeep Bains said Tuesday.
“We want to be a partner,” Bains said after announcing up to $54 million in funds for a Bombardier-led aerospace-research consortium.
“We want to find a solution and we want to continue to make meaningful investments. We want to be a partner, we are at the table, we want to find a solution. It’s not a matter of if but how we want to make the investment.”
His comments are the clearest the Liberals have been to date regarding whether they’ll accept the Montreal-based company’s request for $1 billion in federal funding.
In early September, Bombardier received the second of two instalments of $500 million (U.S.) from the Quebec government.
Quebec now owns 49.5 per cent of a new limited partnership of the CSeries aircraft program, including larger versions of the plane beyond the CS100 and CS300 should they be developed.
Bains wouldn’t give details as to exactly how much Ottawa will invest or where the money will be targeted.
He did reiterate the conditions his government will place on any future funding.
Ottawa wants Bombardier to keep its head office and the jobs connected to its research and development activities in the country, he said.
“These are good-quality jobs that pay 60 per cent above the average manufacturing salary,” Bains said. “We want good-quality jobs here in Canada. We want to focus on research and development and we want to set up the company for long-term success.”
Bombardier spokesman Simon Letendre said the firm meets “regularly” with federal officials and is “looking for a win-win solution in order to keep developing the CSeries.”
The CSeries has received major orders from Air Canada and Delta Air Lines. The company said it acquired 127 firm orders and 80 options in the first half of 2016.
26 Comments follow Metrolinx files notice of intent to cancel Bombardier Inc light rail vehicle contract worth $770 million
· It's about time Bombardier is held accountable. They are always being bailed out by the taxpayer so haven't had to be efficient.
From what I've read, the delays are due to issues related to their Mexico plant not providing the Ontario plant completed assemblies that fit. Time to bring those jobs back before there is no Bombardier left.
· Build the parts cheaper in Mexico and pay more to transport the goods all the way from Mexico, then send more parts that may or may not be built to specs and pay the transportation costs again.
Or build them here with higher labour costs but lower transportation costs because Thunder Bay is closer to Toronto then Mexico.
Have all those MBA geniuses ever learned about cost / benefit ?
Ben d'Avernas When you factor in the Canadian dollar vs the Peso, salaries in MXN vs. CAN, employee benefits, tax regimes, environmental regulations, labour laws, possible kickbacks due to NAFTA.... I reckon it's probably STILL cheaper for BBD to email the specs to Mexico, produce the part and ship it to Canada and back 2 or 3 times. Otherwise, they WOULD be in Thunder Bay.
Shaun Boersma, yes, but think about how silly this whole thing is. We order electric street cars from Bombardier to solve our transportation requirements in an environmentally responsible way. Bombardier then passes the job onto their Mexican factories who operate unimpeded by environmental regulations and then ship the parts north over 3000 miles producing even more green house gasses. I wonder if the tree huggers on city council ever considered the hypocrisy of their actions.
Wow!
I don't imagine Metrolinx took this decision lightly.
Can't say as I bame them.
But this throws as massive ____ into Bombardier.
Massive!
And it's not like they're new players in the train biz.
They've been building trains since 1974 when they built the subway/Metro fleet for Montreal.
If they can't build trains...
Who's gonna trust them to build planes?
They are going to take a massive hit in the market today....See More One of the problems, as I understand it, is that the Toronto rail system (streetcar, subway, LRT) uses non-standard rail gauges and bogey widths. Something to do with the turning radius and spatial requirements to fit properly into Toronto streets. Anyhoo, since it's non-standard, these companies have to completely retool their production facilities and each unit off the line is, in effect, a custom job. They then pass this cost on to the customer.
And Bombardier is the Quebec-based company that the Quebec provincial government has invested in, one more time, and that the federal Liberals, under Trudeau's leadership, are thinking about doing the same? Now that's the definition of SNAFU!
The Quebec company bought 49% of the C-Series aircraft ONLY.
· If this stretches back to 2009 and missed deliveries why keep trying to do business with Bombardier. The beaurocrats and politicians have no skin in the game so there isn't any impetus to demand performance and they only get called to account every 3 to 4 years. Not good for the taxpayer of Ontario or TO , even in a little rain B.C. looks good.
· looks like the handout from the feds is assured - the big bad anglos in Ont cancelled our contract they are discriminating against us its not our fault we work on Quebec time - make the anglos keep the contract or we'll throw a temper tantrum and maybe leave
· "We don’t understand where Metrolinx is going at ..."
Um, the pilot vehicle is 2 years past due. The order was placed 6 years ago and they have not delivered a single unit.
·
So what else is new? Its a Quebec run firm and keep in mind the only Quebec run firm that meets it's objectives is Porn Hub out of Montreal So, if you want success in Quebec, you need to invest in porn.
@Peter Campbell & his "semblables"...
Un autre grand tarlais de ti-cul d’enfoiré qui se “p(H)ourre” le doigt dans l’œil et volontairement, ‘stie ! et d’une ignorance crasse affichée and Peter has so brilliantly perfected the art of peeing on Québécois while telling them it's raining. I wanted to just show you how your displayed crass ignorance is based on a racial prejudice backward without limit !
National Post/ Toronto; Dec. 3 2015;
In strong language, Ontario Auditor General Bonnie Lysyk has delivered one of the most devastating audit reports on government bungling and malpractice in Canadian history
"Most devastating audit reports on government bungling and
malpractice in Canadian history" got it Campbell ?
Hard to "swallow", eh ?
·
So you admit that Quebec is a financial disaster and you also seem to accept that as "normal." You also seem to take issue when the obvious is pointed out. You my friend are one of the manin reasons I left Quebec. A complete inability to deal with reality.
Reality is that other than agriculture and the questionable placement of a hydro electric project, Quebec's main claim to fame is porn.
I would like to point out as well that Bombardier was doing quite well up until the point where they started hiring Quebec graduates to manage things. You may want to look at that as well.
So, at the end of all this Gustave, you know you are in trouble, just what do you plan to do about it? Go crying to Ottawa for more relief funds?
If they just had a couple of billion more from the rest of Canada, everything would be just peachy. It wouldn't go to Thunder Bay but c'st la vie.
@Pearce...
...and HOW MUCH money from the rest of Canada for your disastrous
Blackburry, eh ?
· Not to worry, our Liberal masters will simply pour billions more into Bombardier while telling unemployed Albertans to 'hang in there'.
@Pondo at Reverse Cowgirl ????
has so brilliantly perfected the art of peeing on Québécois while telling them it's raining. I wanted to just show you how your displayed crass ignorance is based on a racial prejudice backward without limit !
· Gustave Dupras The fact that you're shouting racism for valid criticism of your province shows that it is in fact you who are displaying crass ignorance.
yeah...just cancel the order and have Kathleen Wynne send them a cheque. What's another billion at this stage!
· And so the saga of TO public transit woes continues. Last time I took TTC downtown, it took longer than even taking the DVParking lot.
· I wonder whether this will speed delivery of Toronto's streetcar order.
Poor city of Toronto, good old David Miller, sole sourced the contract to Bombardier, what an idiot
...like so many of you for your disastrous Blackburry, eh ???
· Yep, and the City of Edmonton who already screwed up their last new link (Metro Line to NAIT) decided to sign a contract with a consortium including Bombardier to run a new line from downtown to Millwoids. The city which appears is unable to run any major construction projects without delays costing businesses and taxpayers millions including two bridges which were more than a year behind schedule, said there is no issue with the new LRT contract, they are sure that Bombardier will be able to meet its deadlines. I guess the taxpayers will have to wait and see if it actually works out or not.
It's just a contract procedure
· Don't worry Bombardier. Edmonton will still buy cars from you. Ach, deliver them sometime and, oh, the price is way higher. That's fine.
· Smoke and mirrors, they order $428 million in rail cars in August while Bombardier screws with them on the light rail and now they cancel $770 million deal, so why order the rail cars from them ?
Crony capitalism, politicians in bed with big business (Bombardier) in this case, yet we the people are being screwed, dolling out BILLIONS of taxpayers money to fund their hair brain CSeries program (ONLY 318 orders after 8+ years), while they just announce 7,500 more layoffs in their 6th round of layoffs since January, 2014 (34 months) for a grand total of 21,450 jobs !
BUT they are hiring, in Mexico and other places.
NO MORE TAXPAYER SMONEY TO BOMBARDIER, they use us and discard us, and we are the suckers that have made Bombardier what is is, with taxpayers money from selling Canadair and de Havilland on the cheap with good well developed programs (CL-600 Challenger becamse the 601/604/605 and now 650 Challenger and all CRJ's from 100/200/700/900 and 1000, while the DHC-8 becamse the Q400) Bombardier is REAL GODD at stretching an aircraft but not good at developing and selling new aircraft.
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