Bombardier Rail Sale Expected To Boost Local Plant Operations | WAMC

Bombardier Rail Sale Expected To Boost Local Plant Operations

Feb 19, 2020

Canadian-based Bombardier announced this week that France-based Alstom has agreed to buy its transportation rail division.  It’s hoped that the multibillion dollar deal could mean more business for the Plattsburgh rail manufacturing plant.

Bombardier has been working to divest its transportation divisions so it can focus on its business aviation plans and markets.  President and CEO Alain Bellemare announced the sale of its rail division to Saint-Ouen-based Alstom on Monday, calling it a significant, industry-defining transaction.  “This deal is valued at $8.2 billion U.S. This transaction simplifies and significantly reduces the cost of our capital structure. From an industry perspective, we believe that the combination of Alstom and Bombardier Transportation will create significant value for our shareholders and our customers and will provide exciting opportunities for our employees. Moving forward we will focus on our amazing business aircraft franchise.”

According to its website, Alstom “develops and markets systems, equipment and services for the transport sector…..from high-speed trains to metros, tramways and e-buses.”  Bombardier markets rail products in 70 countries, Alstom in 60.  Alstom Board Chairman and CEO Henri Poupart-Lafarge says the acquisition expands their global footprint and accelerates their growth into North America.  “The world is increasing it's need for rail transportation in general. And we expect a lot of investment both in Canada and in the U.S. in terms of rail infrastructure. So it would be a significant potential for us to have access globally to the U.S. market which is not something that you can develop easily.”

What does Bombardier’s sale mean for the rail manufacturing plant in Plattsburgh?   North Country Chamber of Commerce President and CEO Garry Douglas expects the deal to strengthen operations and opportunities at the local plant.   “It’s now a keystone to Alstom going, going forward.  This was a strategic acquisition. There has been an acknowledgement in the sector of rail manufacturing that there needed to be a consolidation. So the Alstom and Bombardier consolidation seems to be a particularly smart strategic one. You look at the Plattsburgh operation it’s a particularly integrated plant. It is able to produce more in-house of the content of a car than any other operation in North America. Plus it has a test track just down the road. So we feel good about this. It will create a more competitive presence.”

No changes in the employee structure are currently planned and Alstom will assume pension liabilities of Bombardier Transportation.
Closing on the sale is expected to be completed in the first quarter of 2021 subject to regulatory approvals.