Bombardier Inc. is cutting 6,600 jobs and closing seven plants in a restructuring of its troubled rail division in Europe.
The Montreal-based company announced Wednesday that it will cut 18.5% of its workforce and close seven European plants over the next two years.
This move comes in response to disappointing financial results in the rail division.
"This restructuring initiative is part of a three-year strategy to bring back improved margins and profitability to this company," CEO Paul Tellier said.
The restructuring plan also includes new arrangements with suppliers to better coordinate materials procurement.
An industrial site improvement program is also being launched at five European locations to further reduce manufacturing costs.
The cost of restructuring is estimated at $777 million, $457 million of which was recorded during the fourth quarter of fiscal year 2004, with the remainder to be recorded over the next two years.
Once fully implemented, the restructuring initiative will reduce transportation's costs by approximately $600 million annually.