Bombardier executive says
canceling rail deal would cause 'irreparable harm'
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[March 18, 2017]
By Allison Lampert
MONTREAL (Reuters) - Bombardier Inc would
suffer "irreparable harm" to its global reputation if it loses a light
train contract from a Toronto transportation agency, a senior company
official said in recent court filings.
The Canadian plane and train maker, which is fighting to save the C$770
million ($573 million) contract with Toronto's Metrolinx, will seek an
injunction on March 21 to prevent an order for 182 cars from being
canceled over customer complaints of delivery delays and poor execution.
Bombardier Transportation's top executive for the Americas, Benoit
Brossoit, weighed in for the first time in an affidavit, filed with the
court on March 3, highlighting the significance of the Metrolinx
contract to Bombardier's prospects.
A company improvement plan will allow Bombardier to meet a revised 2018
delivery date, and ending that contract would likely affect the
company's ability to "successfully bid on future projects," Brossoit
In a statement issued on March 2, Metrolinx, the provincial agency in
charge of transportation in and around Toronto, questioned Bombardier's
current ability to deliver the cars on time.
Bombardier Transportation spokeswoman Cecile Vion-Lanctuit said in an
email, "We have, like any companies, some challenges with a few
contracts. We are closely managing them to overcome the difficulties and
bring them back on track."
The court hearing comes at time when Bombardier is undertaking a broader
five-year turnaround plan to boost profits, reduce delays and improve
In Australia, deliveries from a 2013, A$4.4 billion ($3.38 billion)
Bombardier-led consortium contract to build 75 six-car trains were
halted last month, according to the Queensland state government, citing
issues such as braking problems and the design of the driver cabs, which
it said have inadequate visibility.
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A Bombardier logo is pictured on the company booth during the
European Business Aviation Convention & Exhibition (EBACE) at
Cointrin airport in Geneva, Switzerland, May 24, 2016. REUTERS/Denis
A spokeswoman for Bombardier in Australia said the company could not comment
because of its contractual arrangements.
With a $30 billion backlog, Bombardier Transportation is viewed as a reliable
revenue generator, compared with aerospace, which triggered a severe cash crunch
in 2015 while developing two new jets, prompting the company to consider
But Berlin-headquartered Bombardier Transportation continues to face challenges
from Metrolinx and other contracts signed before the 2015 arrival of Chief
Executive Alain Bellemare, who launched the five-year plan to boost rail
revenues from $8 billion in 2016 to $10 billion in 2020.
Metrolinx, which has clashed repeatedly with Bombardier since signing the 2010
contract, has questioned the reliability of the contract's first pilot vehicle,
which was supposed to be delivered in 2015 but was only produced more recently
(Reporting by Allison Lampert in Montreal; Additional reporting by Jonathan
Barrett in Sydney; Editing by Denny Thomas and Leslie Adler)
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