MONTREAL — Bombardier Inc. is temporarily halting production in Canada and suspending its 2020 financial forecast due to the COVID-19 pandemic.
The company said Tuesday it is stopping all non-essential work in the country, including aircraft and rail production in Quebec and Ontario.
Employees impacted by the shutdown will be placed on furlough, with workers as well as executives forgoing pay, Bombardier said.
Board members have also agreed to forgo compensation for the remainder of the year.
The Montreal-based company, which carries a hefty debt despite multiple asset sales over the past five years, has cut all discretionary spending and “is pursuing additional measures to enhance liquidity,” chairman Pierre Beaudoin said in a statement.
Bombardier also suspended its financial guidance for the year, which had projected revenue growth to US$15 billion from US$13.7 billion in 2019.
The company, reduced to a single revenue stream after announcing the sale of its rail division to French train giant Alstom SA last month, may face falling demand for new business jets amid the broader economic slowdown triggered by the novel coronavirus outbreak.
The sale, made to help pay down Bombardier’s US$9.3 billion in debt, once again shrank a company that a year ago boasted three major divisions — commercial aircraft, trains and business jets.
“It’s hard to see demand for new business jets holding up,” Financial Bank analyst Cameron Doerksen said Friday.
The COVID-19 crisis is dragging down corporate profits and equities markets, which both correlate strongly with demand for private planes, said Richard Aboulafia, an aviation analyst with Teal Group in the Washington, D.C., area.
Bombardier shares have hit new lows over the past week, hovering between 38 and 50 cents at their cheapest price in decades.