Bombardier Transportation was a Canadian-German rolling stock and rail transport manufacturer, with headquarters in Berlin, Germany. It was one of the world's largest companies in the rail vehicle and equipment manufacturing and servicing industry. Bombardier Transportation had many regional offices, production and development facilities worldwide.[4][5] It produced a wide range of products including passenger rail vehicles, locomotives, bogies, propulsion and controls. In February 2020, the company had 36,000 employees, and 63 manufacturing and engineering locations around the world.[6] Formerly a division of Bombardier Inc., the company was acquired by French manufacturer Alstom on 29 January 2021.[2]
History
20th century
1970s: Formation and first orders
Canadian company Bombardier Inc. entered the rail market in 1970 when it purchased Lohner-Rotax of Austria. While Lohner built trams, Bombardier was more interested in its Rotax business, which built engines for its Ski-Doo snowmobiles.[7] But Bombardier held onto the rolling stock business, and in 1974 secured an order from Société de transport de Montréal (STM) to build metro trains for the Montreal Metro.[8][9] The core of the transportation group was formed when Bombardier purchased the Montreal Locomotive Works (MLW) in 1975.[10] The purchase of MLW gave Bombardier a rail focused manufacturing facility, that had an established history of building locomotives, freight railcars, and passenger railcars.
1980s: Expansion to the US and Europe
With the purchase of the MLW, Bombardier acquired the LRC (Light, Rapid, Comfortable) tilting train design which it heavily marketed to both Amtrak and Canada's Via Rail, however, the program was only modestly successful with Bombardier selling about 100 LRC coaches to Via. In 1987, Bombardier bought the assets of two major US railcar manufacturers, Budd and Pullman-Standard.[11] With these new assets, and no desire to remain in the business of building freight locomotives or freight cars, Bombardier sold off MLW to General Electric in 1988.
In the late 1980s Bombardier Transportation gained a manufacturing presence in Europe with the acquisition of a 45% share in BN Constructions Ferroviaires et Métalliques[8] (whose principal facility was in Bruges, Belgium) in 1986. This was followed by the acquisition of the second-largest French railway manufacturer[12]ANF Industrie with its main plant in Crespin in 1989.[8] Bombardier Transportation had become by that time the leading North American producer of rail equipment which had sold 825 subway cars to New York City in the 1970s and 1980s.[13]
1990s: Expansion to Mexico, Germany and the UK
Back home in Canada, 1991 brought a big expansion for Bombardier. The company was able to acquire the Urban Transportation Development Corporation (UTDC) from the Government of Ontario after its parent company Lavalin went bankrupt. In addition to the core UTDC assets, Bombardier also received the rail manufacturing division of Hawker Siddeley Canada which had been purchased by Lavalin and merged into UTDC. The Hawker Siddeley assets included a manufacturing plant in Thunder Bay, Ontario.
That same year in Europe, the company established its Bombardier Eurorail division consisting of ANF, BN, BWS (the former assets of Lohner), and the English bodyshell maker Prorail, which it had purchased in 1990.[8][14][15][16] The company also owned the North-American rights to the French TGV through an agreement with GEC Alsthom.[17] In 1992, the company acquired Mexico's largest railway rolling-stock manufacturer, Concarril, from the Mexican government.[18]
2000s: Western world's largest rail-equipment manufacturer
Bombardier's former Berlin headquarters in April 2016
The company's biggest acquisition came just after the turn of the century when it purchased Adtranz from DaimlerChrysler. Adtranz was a sprawling multi-national company twice the size of Bombardier at the time, which had only become profitable in the months before the merger. The combination would make Bombardier the largest rail-equipment manufacturer.[20]
DaimlerChrysler agreed in August 2000 to sell Adtranz for US$711 million (equivalent to US$1.258billion in 2023), a price considered to be low by industry analysts.[note 1][21][22] The sale was cleared by the European Union in April 2001 on the condition that Bombardier would license or sell the Adtranz regional train and tram products to Stadler Rail in the German market, due to the large market share of Bombardier and Adtranz in the country. The deal would make Stadler a viable independent company providing competition to Bombardier.[23][24] The takeover came into legal effect on 1 May 2001 with a final price of US$725 million.[25][26] After the purchase, Bombardier Transportation moved its head office to Europe, while keeping a few plants in the US and Canada for the smaller North American market.[27]
However, the merger was not smooth. Within weeks Bombardier said that it was misled about the financial situation of Adtranz, and the combination of the two companies took years to resolve.[28] One of the major issues was the sprawling footprint of the two companies in Europe. Even after closing some locations, in the early days after the merger Bombardier planned to operate 27 manufacturing sites across 14 countries. The number of sites meant that some would see the scope of their work decreased.[29][30]
In 2004, amid overcapacity in the European passenger train industry, Bombardier announced eight sites would close.[29][31] Later that year in September, DaimlerChrysler agreed to refund Bombardier US$209 million, making the final sale price for Adtranz just $516 million.[32][33][34]
2010s: Global operations and decline
The transportation division's financial woes continued into the 2010s, reflecting a broader trend within the company. Bombardier's aviation division racked up billions of dollars in debt developing the CSeries airliner and the Global 7000 business jet.
Between 2012 and 2015, the company announced the closure of several plants including the former Waggonfabrik Talbot plant in Germany,[35][36] and a factory in Australia,[37][38] and a facility in Hungary was nationalized.[39]
In the same period, Bombardier agreed to several potentally lucrative, but risky contracts to build R179 cars for the New York City Subway, the Fleet of the Future for San Francisco's Bay Area Rapid Transit, Flexity streetcars for Toronto, Aventra EMUs for the London Overground and Twindexx EMUs for Switzerland's SBB. Each of these contracts was valued between 600 million to 1.8 billion dollars, but each called for highly specialized, one-of-kind equipment, and many also included late-delivery penalties. Deliveries of each would be delayed, beset by software issues, and reliability problems once trains were placed in service.[40][41]
Under increasingly dire financial pressure, Bombardier Inc. announced in May 2015 that it planned to split or spin-off Bombardier Transportation as a separate publicly traded company, while retaining control as the majority owner.[42] The sale would generate money needed to continue the financing of the troubled CSeries jet,[43][44] and Transportation division managers said the independence would allow them to better compete with a growing Chinese presence in the European market.[45] An IPO was planned for late 2015.[46]
However, before the IPO could be floated, the Caisse de dépôt et placement du Québec (CDPQ) stepped in and agreed to give Bombardier a US$1.5 billion infusion of cash. In exchange CDPQ, a crown corporation which manages pension and insurance plans, would receive a 30% stake in the company. The deal was structured as a bond/equity hybrid, with shares returned to CDPQ dependent on the financial performance of the company.
Over the next few years, Bombardier worked to correct issues with the cars it agreed to build in the earlier half of the decade, and simplify production though more selective bidding, greater standardization and centralized procurement. It also planned to layoff thousands of workers in Germany.[47] However, the penalties the company was hit with for late deliveries wiped out many of the divisions profits. By 2018, Bombardier slipped to become the 3rd largest rail-equipment manufacturer in the Western World and fourth globally, eclipsed by CRRC, Siemens and Alstom.[48][49][50]
Between mid-2018 and late-2019, Bombardier started selling off many of its commercial aviation assets, notably selling the CSeries to Airbus. This left the company as a manufacturer of rail vehicles and business jets.
2021: Sale to Alstom
In February 2020, Alstom agreed to buy the Bombardier Transportation division and signed a memorandum of understanding to do so, for between €5.8 billion and €6.2 billion. The deal required approval by Alstom shareholders at a meeting held in October 2020, as well as approval by European regulators. Bombardier's major shareholder, Caisse de dépôt et placement du Québec, had already agreed to the sale.[51][52] In July 2020, the European Commission approved the sale.[53] Bombardier Inc. announced on 1 December 2020 that the transaction would be closed on 29 January 2021 for €4.4 billion.[54][55]
Bombardier's standard metro vehicles were the mid-sized fully automated and driverless Innovia Metro with the option for linear induction motor propulsion or a conventional rotary motor, and the high-capacity customizable Movia platform, which is powered by conventional motors and can also be fully automated. In addition, Bombardier produced many custom models not based on either model.
Mexico City Metro: NC-82 (First Canadian Rolling Stock Based on Mexican NM79 Series) NM-02 (Co-Built with CAF) and Bombardier participated in the Refurbish and Rehabilitation Program for Alstom original MP68 rolling stock)
Cairo Monorail – Two lines, 42 km (26 mi) October City to suburban Giza and 54 km (34 mi) Nasr City to New Cairo, Egypt (under construction, due to open in 2024)[61][62][63]
Note: Bombardier Transportation acquired Universal Mobility Incorporated's UM III technologies in 1989. UMI produced nine monorail systems from 1969 to 1984, which are included in the list above.[65]
Zefiro, trainsets built for the Chinese market, which have a maximum speed of 380 kilometres per hour (240 mph)[67] Business to be transferred to Hitachi Rail in 2022.[68]
Bombardier also supplied propulsion units, train-control systems, bogies, and other parts, and maintained train fleets.
Services
In addition to manufacturing a wide variety of passenger rail vehicles and locomotives, Bombardier Transportation provided services for commuter train providers.
Train operation: Bombardier Transportation operated a number of commuter and light rail systems under contract with various transit agencies. It was the operator for six of the seven GO Transit commuter train lines in Ontario from 2008 to 2015. As of February 2015, It operated all GO Transit rail train lines. In 2015, it also began the operation of the Union Pearson Express airport link in Toronto. Other systems operated by Bombardier include SunRail in central Florida, MARC Train's Brunswick and Camden Lines in Washington and Maryland, the Sprinter and Coaster lines in the San Diego area, and the River Line in New Jersey.[69] The company also operated a number of airport people-mover systems, typically systems it built, such as the AirTrain JFK and AirTrain Newark in New York City under contract with the Port Authority of New York & New Jersey.
From 2012/2013, the Savli factory (India) is also planned to assemble Electro-Motive Diesel products for Asian customers.[70]
In November 2016, Bombardier Transportation signed an eight-year contract worth of $331 million to supply operating and maintaining services with Réseau de transport métropolitain's six commuter rail lines in Montreal.[71]
Facilities
Bombardier Transportation had production facilities or product development in:
Africa:
South Africa: Traction converter equipment factory at Isando, opened 2016.[72]
Bombardier "Type 1" (trimet)Denmark: Continues production of IC3 "flexiliner" passenger multiple units.[8]
France: Regional and suburban trains, metros,[8] at former ANF Industrie plant in Crespin (north of France).
Germany: Major facilities for production of mass transit, regional, and high speed passenger trains. Control systems.[8] Diesel and electric locomotive manufacture. Sites include :
Former ABB Werk-Sued Mannheim – rail vehicle drive and control systems; passenger and signalling systems; inductive charging (PRIMOVE); as well as project management, sales and fleet management/[77]), and others.
Greece: From 1999 to 2009 Bombardier manufactured train parts for the then OSE SA which were assembled by the Hellenic Shipyards Skaramaga with other companies.
Sweden: Production, engineering, development[8] Also manufactures Regina EMUs.
Switzerland: Research and design – propulsion and bogies, also manufacture of high capacity (double decker) passenger vehicles.[8] Sites include former Ateliers de Constructions Mécaniques de Vevey in Villeneuve
Brazil: Monorail manufacturing facility in Hortolandia São Paulo state.[8]
Legal issues
Deutsche Bahn
In early 2013, Deutsche Bahn announced that it was suing Bombardier for €350 million because of some serious defects in trains used on the suburban S-Bahn rail network in Berlin. This was in addition to the €160 million it was asking for from Bombardier because of problems with more than 200 regional trains operating in southern Germany and problems with the brakes in regional and local trains in Munich.[80] The matter was settled out of court in March 2015. Lutz Bertling, head of Bombardier's transportation division at the time, confirmed the two firms had come to an agreement, saying: "The settlement is a positive signal for our future cooperation."[81]
The investigation report alleges that Bombardier provided gifts and trips to Canada for civil servants and politicians involved in the contract decision, which was based on revenue expected from an inflated estimate of 180,000 passengers per day using the service. It also alleges that Bombardier created a $2-million slush fund for the Canadian citizen Kim Hak-Pil, a high-ranking Bombardier executive in South Korea. Bombardier has consistently denied the corruption allegations, stating that "They were not pleasure trips. There is a need to convince the people that our technology works well.... If it had been corruption, they would have charged us." The statute of limitations has now expired, due to lack of evidence according to Bombardier.
Everline operation has been financially troubled since construction was completed in 2010.[85] The system remained dormant until service began in 2013[86] while the line owner successfully negotiated with the city of Yongin a minimum revenue guarantee of 29.5 billion KRW[87] per year regardless of passenger load.[88] This is said to be a serious burden for the city because ridership is reported to have risen to only about 20,000 passengers per day on the 30 carriages, or about a quarter of the maximum possible capacity of the fleet in a 12-hour day. A reason suggested for this is the fare of 1100 KRW (about US$1 in 2015); it is impossible to pay for Everline trips via a transfer surcharge on a connecting subway ticket. A 2014 web page[89] of a Seoul tour service retailer makes no mention of the Everline among the suggested modes of bus transport between Seoul and Everland. A lawyer who filed legal action on behalf of the citizens of Yongin is reported to have provided details about Bombardier's pursuit of the contract. He said that "between 2003 and 2005, Bombardier funded three luxurious trips to Canada to each of 37 people" including 18 Yongin city councillors on so-called "LRT field trips".[82][83]
Toronto Flexity streetcars in December 2018
Toronto Transit Commission
On 16 October 2015, the Toronto Transit Commission (TTC) announced that it had asked its board to consider legal action against Bombardier. TTC staff is recommending that the TTC board "commence legal action, or make a claim allowed for already in the contract, of $50 million for late delivery" against Bombardier. Bombardier had committed to delivering 67 custom-built Flexity Outlook streetcars to the TTC by October 2015 for its streetcar system, but only 10 were in service at the time.[90][91]
On 28 October 2015, the TTC board voted in favour of a lawsuit against Bombardier "for at least $50 million to recoup lost costs", according to Chair Josh Colle, because of the company's failure to deliver the additional new streetcars.[92]
^Magder, Jason; Scott, Marian (14 October 2016). "The métro at 50: The clash with car culture". Montreal Gazette. Laurent Beaudoin, then CEO of Bombardier, got a visit from Drapeau, who told him the city needed 400 new métro cars, and the company should bid on the contract ... The bid from Canadian Vickers, which had manufactured the first cars, was judged by the city to be non-conforming because of a technicality in the wiring system — and gave Bombardier the win ... Bombardier has since become a major player in the world of public transit, supplying trains for London, New York, Toronto and others.
^"Transportation Group Buys S.L. Firm's Assets". Deseret News. 29 September 1989. Archived from the original on 5 February 2017. Retrieved 4 February 2017. The assets of Universal Mobility Inc. of Salt Lake City have been purchased by The Transportation Group Inc., Orlando, Fla., a transit systems subsidiary of Bombardier Inc., one of the work's largest rail transit vehicle manufacturers.
^"Home". Bombardier.com. Archived from the original on 9 March 2012. Retrieved 1 March 2017.
^Marie-Maude Denis with Chantal Cauchy (29 January 2015). Un Train Nommé Délire (Television production). Enquête (in French). Canada: Radio-Canada. Retrieved 2 February 2015.
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