Bombardier exec says canceling rail deal would cause ‘irreparable harm’

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By Allison Lampert | MONTREAL

MONTREAL 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 said.

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 production.

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.

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 bankruptcy.

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 by
Bombardier. (Additional reporting by Jonathan Barrett in Sydney)



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