
Bombardier Transportation

Bombardier Transportation was a Canadian rolling stock and rail transport manufacturer, headquartered 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. 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.
Formerly a subsidiary and rail equipment division of Bombardier Inc., the company was acquired by French manufacturer Alstom on 29 January 2021.
History.
20th century.
1970s: Formation and first orders.
Canadian company Bombardier Inc. entered the rail market in 1970 when it purchased Lohnerwerke GmbH of Austria. Bombardier Transportation's first order for mass transit rolling stock was in 1974 for the Société de transport de Montréal (STM) (Montreal transport authority) to build metro trains for the Montreal Metro.
The core of the Transportation group was formed with the purchase of Montreal Locomotive Works (MLW) in 1975.
1980s: Expansion to the US, France and Belgium.
With the 1975 purchase, Bombardier acquired MLW's LRC (Light, Rapid, Comfortable) tilting train design which it produced in the 1980s. In 1987, Bombardier bought the assets of US railcar manufacturers Budd and Pullman-Standard.
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 (whose principal site was in Bruges, Belgium) in 1986, and the acquisition of ANF-Industries (whose principal site was in Crespin, France, near the Belgian border) in 1989.
1990s: Expansion to Mexico, Germany and the UK.
In 1990, Procor Engineering of Horbury near Wakefield, England; a manufacturer of bodyshells, was acquired, and renamed Bombardier Prorail.
In 1991 the group purchased Urban Transportation Development Corporation (UTDC) from the Government of Ontario, which had previously acquired Hawker Siddeley Canada. MLW was sold to General Electric in 1988. GE ended railcar operations in Canada in 1993. Bombardier Transportation continues to operate the railcar operations in Thunder Bay.
In 1991 the grouping Bombardier Eurorail was formed consisting of the company's European subsidiaries; BN, ANF-Industrie, Prorail, and BWS. In 1992, the company acquired Mexico's largest railway rolling-stock manufacturer, Concarril, from the Mexican government.
In 1995 Waggonfabrik Talbot in Aachen, Germany, and in 1998, Deutsche Waggonbau (DW), and Ateliers de Constructions Mécaniques de Vevey in Vevey, Switzerland, were acquired. DW encompassed the major portion of the railway equipment industry of the former East Germany ("Kombinat Schienenfahrzeugbau"), and had its principal sites in Bautzen and Görlitz.
21st century.
2000s: Western world's largest rail-equipment manufacturer.
In May 2001, Bombardier Transportation acquired Adtranz from DaimlerChrysler, and became by many measurements the Western world's largest rail-equipment manufacturer. The takeover was approved by the EU Competition Commission subject to a number of minor clauses including the divestment of Bombardier's stake in Adtranz/Stadler joint venture Stadler Pankow (sold to Stadler Rail), and an agreement to retain Kiepe Electric as a supplier, and ELIN as a partner for a number of years after the acquisition. The addition of Adtranz made Bombardier a manufacturer of locomotives along with its existing product lines of passenger carriages, multiple-unit trains, and trams. With the acquisition of Adtranz, Bombardier also gained competence in the electrical propulsion components business.
After the Adtranz acquisition in 2001, Bombardier Transportation moved its head office, design center and core manufacturing strategy to Europe with a few legacy plants in North America for the smaller North American market:
Additionally a number of plants would have specialised manufacturing roles, including Česká Lípa (Czech Republic) and the Pafawag facility in Poland which would supply parts and welded structures, and sites in Vienna (Austria) and Bautzen (Germany) which would specialise in light rail vehicle (LRV) manufacture whilst double deck trains for the German market would be manufactured in Görlitz. Other sites had their work mandate reduced in scope, or were closed.
In 2004 due to overcapacity in the European passenger train industry, Bombardier announced a restructuring program resulting in the closure of several plants; in the UK, the bogie production site at Pride Park, Derby, Bombardier Prorail (Wakefield), and a maintenance facility in Doncaster were closed; in mainland Europe, the plants at Pratteln, Kalmar and Amadora were to be closed, as well as plants in Ammendorf and Vetschau in eastern Germany which had been slated for closure in 2001.
2010s: Global operations and decline.
In late 2012 Bombardier announced the closure of the Bombardier Talbot plant in Aachen, and a reduction in workforce in the transportation division of 1,200 people.
The company obtained two major orders in 2014: San Francisco Bay Area Rapid Transit District (BART) ordered an additional 365 rail cars from Bombardier in early 2014, to be assembled at Bombardier's plant in Plattsburgh, New York; Transport for London (United Kingdom) awarded a £1.3 billion contract to provide 70 Aventra trains for Crossrail, and included the building of a maintenance depot at Old Oak Common.
In May 2014 Bombardier extended its presence in Australia by purchasing a 100% stake in Rail Signalling Service (RSS), an Australian company focused on designing and constructing rail signalling solutions. In Sep 2014 the downsizing and eventual closure of the Maryborough factory was announced, the factory closed in Dec 2015.
In January 2015 the government of Hungary nationalised the loss-making and under-utilised Bombardier carriage works at Dunakeszi (, Hungarian), acquiring a 64.9% stake for $7.8 million.
In May 2015 the parent company Bombardier Inc. announced that it intended to split or spin-off Bombardier Transportation as a separate publicly traded company, while retaining control as the majority owner. Lutz Bertling, president and CEO of Bombardier Transportation stated that a primary motivation for the sell off was to increase the company's financial flexibility, for potential acquisitions or consolidations, allowing the company to better compete with an anticipated Chinese presence in the European market. An IPO was planned for late 2015. In late 2015 the public investor Caisse de dépôt et placement du Québec (CDPQ) acquired a US$1.5 billion stake in Bombardier Transportation in the form of a bond/equity hybrid, with the shares returned to CDPQ dependent on the financial performance of the company. The investment initially representing a 30% stake - a valuation of $5 billion. The sale was required in part to continue the financing of the parent company's CSeries jet, a major cause of a $4.6billion loss for the parent company in 2015.
In late 2015 the National Railway Company of Belgium awarded a Bombardier/Alstom consortium a large €3.3 billion contract for 1,362 M7 doubledecker passenger rail vehicles, with a value to Bombardier of around €2.1 billion.
In August 2016 Bombardier opened a production facility in Isando, Johannesburg, South Africa. The site was specialised for the production of electric traction equipment ("Mitrac").
In December 2016 citing a 'challenging market environment', Bombardier said that a 'strategic realignment' would put 'a strong focus on product standardisation and site specialisation in order to become more efficient and effective'. Up to 2,200 jobs are expected to go, with the German plants in Hennigsdorf, Görlitz and Bautzen reportedly most affected.
In the late 2010s Bombardier has been beset by software and quality issues on a series of so-called "legacy" contracts in Europe and the U.S., forcing Bombardier to incur additional costs and pay late-delivery penalties. This includes high-profile issues in contracts for the New York City's MTA, Germany's Deutsche Bahn, Switzerland's SBB and London Overground. Analysts speculate that since acquiring Adtranz, a company twice the size of Bombardier at the time, Bombardier has created a series of organizational problems that took years to resolve.
By 2018, Bombardier has since slipped to become the 3rd largest rail-equipment manufacturer in the Western World and fourth globally, eclipsed by CRRC, Siemens and Alstom.
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. In July 2020, the European Commission approved the sale. Bombardier Inc. announced on 1 December 2020, that the transaction was closed on 29 January 2021 for €5.5 billion.
Products and services.
Metro rolling stock.
Bombardier's standard metro vehicles are the mid-sized fully automated and driverless Bombardier Innovia Metro with the option for linear induction motor propulsion or a conventional rotary motor, and the high-capacity customizable Bombardier Movia Metro, which is powered by conventional motors and can also be fully automated. In addition, Bombardier has produced many custom metro models not based on either model.
Locomotives.
Bombardier's locomotives are mostly linked to their acquisition of Adtranz and Montreal Locomotive Works, as well as joint venture with Alstom. Via the acquisition of Adtranz, Bombardier was able to obtain some cornerstone technologies, such as the three-phase drive technology developed by plant in Mannheim, which is the worldwide center of competence for the development of locomotives.
Other than the LRC, all other locomotives were based on European designs.
People movers.
Bombardier also supplies propulsion units, train-control systems, bogies, and other parts, and maintains train fleets.
Services.
In addition to manufacturing a wide variety of passenger rail vehicles and locomotives, Bombardier Transportation provides services for commuter train providers.
Facilities.
Bombardier Transportation has production facilities or product development in:
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. 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."
Everline.
In January 2015, the Canadian Broadcasting Corporation (CBC) reported that South Korea's Special Investigation Unit for anti-corruption produced a report accusing Bombardier Transportation of corruption in the pursuit of the 2004 contract to build an elevated Light Rapid Transit (LRT) rail system called the Everline connecting the Giheung Station on the Bundang (Yellow Line) of the Seoul Metropolitan Subway system to a large amusement park named Everland, via Yongin, the 12th largest city in South Korea, about from central Seoul.
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. The system remained dormant until service began in 2013 while the line owner successfully negotiated with the city of Yongin a minimum revenue guarantee of 29.5 billion KRW per year regardless of passenger load. 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 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".
Toronto Transit Commission.
On 16 October 2015, the Toronto Transit Commission (TTC) announced that it has 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.
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.