Bombardier to close German rail plantBombardier to close German rail plant
By Ottawa Business Journal Staff
Wed, Jun 9, 2004 9:00 AM EST
Bombardier Inc. confirmed Wednesday that one of the seven European rail plants on the chopping block is the one in Ammendorf, Germany already saved once by government intervention.
In March, the Montreal-based train and regional jet maker unveiled a sweeping restructuring of its ailing rail unit, Bombardier Transportation.
The plan calls for seven plants operating below capacity to be closed and 6,600 jobs lost.
Ammendorf, which employs about 700 workers, is one of those plants and will be closed by the end of next year. Peter Witt, the board chairman of Bombardier's German operation, made the announcement Wednesday.
The plant was on the chopping block in 2002, but was saved when German Chancellor Gerhard Schroeder intervened and the government stepped in with a large order from a state transport authority.
Germany, the largest economy in the European Union, is struggling with a national unemployment rate above 10 per cent. In the eastern state of Saxony-Anhalt where the rail plant is located, the local jobless rate is close to 20 per cent.
Despite stronger German industrial production fueled by increased global demand, the nation's economy continues to suffer from poor consumer spending due to the weak labour market. Consumer spending accounts for about 60 per cent of Germany's economic activity.