Bombardier has agreed to sell off three of its aerospace plants, including its historic wing-making factory at Belfast, also known as Hort Brothers, to US aerospace manufacturer Spirit AeroSystems in a deal worth $1.1 billion. As part of the deal Spirit is also acquiring a smaller facility in the Moroccan port city Casablanca and another maintenance and repair facility in Dallas, Texas.
Bombardier made the announcement as it issued third-quarter financial results on Thursday, wherein it reported a 46.4% decline in quarterly core profit, weighed down by higher costs as it spent more on stepping up production of its flagship Global 7500 business jets.
The Canadian aerospace giant had put up its Northern Island factory for sale in May as part of it reorganization plans with the aim of increased focus on rail transport and business aviation.
Kansas-based Spirit Airlines is a major supplier to Boeing and Airbus. Earlier this year Spirit AeroSystems had announced that it wants to do more work for Airbus. Understandably, this buyout is a part of this strategy.
Michael Ryan, Bombardier's chief operating officer, said: "We are delighted that Spirit, a global, tier-one aerostructure manufacturer and supplier, has recognised our unique offering and growth potential."
Under the deal, Bombardier will receive $500 million in cash from Spirit AertoSystems, which will assume around $290 million in liabilities in repayable government advances towards new projects and $300 million in pension liabilities. The deal is expected to close in the first half of 2020.
The three factories together are expected to generate revenues of around $1 billion in 2019, with an adjusted earnings margin of 12 per cent before interest, tax, depreciation and amortization.
The deal also ends months of uncertainty over the jobs of 3,500 highly skilled workers who were employed at the Northern Island plant. According to spokeswoman for Bombardier there were "no workforce adjustments" included in the deal, which means all the employees of Bombardier will be automatically transferred to Spirit AeroSystems. Spirit's buyout will definitely bring relief to the workers of Short Brothers, which is one of the largest private sector employers there.
The Northern Island plant has for years suffered cuts and uncertainty and at one point close to declaring itself bankrupt in 2015, following heavy investment in its C-Series aircraft program.