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Today, Bombardier Inc. announced a major restructuring at subsidiary Bombardier Transportation designed to address excess capacity in industrial operations, improve performance and increase earnings.

During the next two years, the supplier will cut 6,600 positions — representing 18.5 percent of its rail operations workforce — and close seven production facilities in five European countries. The closures were based on assessments of the facilities’ workload, operating efficiency, technical capability, prospective contracts and economic issues, according to a prepared statement.

Bombardier already has suspended or ceased operations at four North American facilities.

Bombardier Transportation also will improve material procurement processes with suppliers, and launch an industrial site improvement program at five European facilities to reduce manufacturing costs and inventory, and improve project management.

"This restructuring initiative is part of a three-year strategy to bring back improved margins and profitability to this company," said Bombardier President and Chief Executive Officer Paul Tellier. "The initiatives launched in the fourth quarter of fiscal-year 2004 will set the stage for the third phase of our strategy — capitalizing on growth opportunities and maximizing shareholder value next year."

To implement the initiative, Bombardier Transportation expects to spend $777 million during the next three years, but the plan is expected to reduce the supplier’s annual costs by $600 million.

In January, Bombardier Transportation announced a new management team and organizational structure designed to improve accountability and project management.