Bombardier offloads Belfast plant to Spirit AeroSystems

Bombardier has agreed to sell three of its aerospace plants, including the historic Belfast wing factory once known as Short Brothers, to US company Spirit AeroSystems in a deal valued at $1.1bn.

The Canadian aircraft and trainmaker is to receive $500m in cash from Spirit, which will assume some $700m in liabilities including pension obligations and repayable government advances towards new projects.

Bombardier put its aerostructures operations, which produce aircraft components such as wings and fuselages, on the block in May as part of a drive to refocus on rail transport and business aviation.

Spirit is also buying a smaller facility in the Moroccan port of Casablanca and a maintenance, overhaul and repair shop in Dallas, Texas.

The three sites together are expected to generate revenues of roughly $1bn in 2019, with an adjusted earnings margin of 12 per cent before interest, tax, depreciation and amortisation.

Collectively, they employ 4,000 people, more than two-thirds of those in Belfast. Bombardier said there would be “no workforce adjustment” as part of the announcement.

Spirit’s arrival will come as a relief for the workforce in Northern Ireland, where the old Short Brothers is one of the largest private sector employers. Bombardier’s decision to quit the province cast a shadow over the future of a key UK industrial asset that is a pillar of the country’s aerospace sector.

It also came at a delicate moment for Britain’s Conservative government, given that the surrounding area is a stronghold for the Democratic Unionist party, on which it has relied to pass legislation.

Bombardier said that, following the transaction, Spirit would continue to supply structural aircraft components and spare parts for a number of its models.

The Montreal-based group added that the disposal, which is expected to close in the first half of next year, would give it more liquidity as it reduces debt under a turnround programme.

“This transaction represents another strategic milestone in the reshaping of our portfolio to focus on our strong business aircraft and rail franchises,” said Alain Bellemare, chief executive officer.

Bombardier flirted with bankruptcy in 2015 following heavy investment in its C-Series aircraft programme, in which rival Airbus has since bought a majority stake.

The GMB union gave a cautious welcome to the takeover by Spirit. “After years of job losses and cost-cutting and devastating uncertainty, Bombardier’s skilled workers in Belfast finally have cause for hope,” said senior steward Alan Malcolm.

“We need reassurances on [Spirit’s] intentions for the future of Belfast operations, and exploring opportunities to bring in new manufacturing, assembly and engineering work,” he said.

Bombardier’s announcement came as it missed analyst estimates for third-quarter earnings, but reaffirmed a forecast for growth in earnings and cash generation in 2020. The company’s shares leapt 9 per cent.