One of the largest suppliers of railway equipment to Germany, Canada's Bombardier, said has announced it will close seven European factories and cut 18.5 percent of its worldwide workforce.
This factory in Ammendorf will be shut down in 2005.
Canadian rail and aerospace concern Bombardier announced Wednesday it would cut as many as 6,600 jobs worldwide due to diminished business. The cuts will hit Europe particularly hard, with seven factories marked for closure, including a historical factory in the eastern German city of Ammendorf. The restructuring is expected to cost the company about 1 billion Canadian dollars (€610 million, $748 million) and will reduce the workforce of the world's largest railway equipment manufacturer by 18.5 percent.
Bombardier President and CEO Paul Tellier.
Speaking on Wednesday, Bombardier CEO Paul Tellier (photo) said the cuts could no longer be delayed. The "disappointing results" of Bombardier's railroad business forced the Montreal-based company's hand, Tellier said. In 2003, the division posted losses of 353 million Canadian dollars. Overall, the company posted a loss of $261 million compared with a loss of $949 the previous year. The company says the layoffs and closures will save Bombardier's railway division $600 million per year.
German workers protest
In the German state of Saxony-Anhalt, plans to close the Ammendorf plant in 2005 sparked a wave of protest. The company first threatened to close the plant two years ago, but reversed its plans under intense pressure from the German government and Chancellor Gerhard Schröder, who personally intervened to save the plant weeks before elections in the state. The government said this week it would help the nearly 800 factory workers affected by the closure find new jobs.
"The order books are empty and not just for the short-term," said Joachim Gaissert, a German Bombardier manager. "We're going to have to make adjustments for the next four years." Gaissert said the company would seek to relocate as many as 240 workers to other plants in the German cities of Bautzen, Görlitz, Aachen and Kassel.
Layoffs are also expected at a second Bombardier plant located in Hennigsdorf near Berlin, the company's largest in Germany. Bombardier spokespeople said they would cut 100 of the 2,100 positions there.
Workers in Hennigsdorf expressed outrage over the planned cuts -- the latest in a long line of recent layoffs there.
Workers in Ammendorf successfully protested against a proposed closure of the factory in 2002.
"We have the feeling that Hennigsdorf is being cannibalized," said one woman. "If you think about it, this used to be a factory with 8,000 people. When you look at how many people are left her now and what we're hearing these days about what's coming next, what kind of conclusions are you supposed to draw?"
The news has fallen particularly hard on the factory's longtime workers. "It's terrible," said one man. "After 43 years of work, what they're doing here to people is horrible."
The move in Hennigsdorf comes just four years after Bombardier bought the plant from Adtranz, a competitor. The head of the plant's workers council, Michael Wobs, criticized the company's decision to scale back its Hennigsdorf plant, questioning the company's logic in acquiring it.
"Mostly, Bombardier wanted to become the market leader," he said. "On the other hand, the company also had to have seen that there were huge overcapacities. There are considerable fears among the employees here that this step is just one more toward the end of production at Hennigsdorf."
More closures in the works
Additional closures this year are planned in Great Britain at Bombardier's Derby Pride Park and Doncaster factories and Portugal's Amadora plant. In 2005 the company will close its Ammendorf site as well as a factory in the British city of Wakefield.