The Toronto Transit Commission board of directors has voted unanimously to sue Bombardier Transportation for at least $50 million for failure to deliver new streetcars on time, and without defects, according to an Oct. 30, 2015 report in the Toronto City News.
The TTC was scheduled to have 67 of an order of 204 new Bombardier low-floor Flexity streetcars in service by the end of October 2015, but there are only ten currently on Toronto’s streets. The vehicles, whose carbodies are fabricated at Bombardier’s Sahagun, Mexico plant and assembled at the Thunder Bay facility, have been plagued with mechanical and electric problems. “TTC CEO Andy Byford said he was furious when [Bombardier] notified him on Oct. 15 of yet another manufacturing problem with the streetcar order after it had committed to 20 cars in July, but later reiterated the best they could do was 16,” The City News said. “Byford said not only is the [TTC] going after the company for a $50 million late delivery fee, but will also seek damages against them for maintenance and overhaul costs of the existing fleet and additional costs for staff time.”
“At the end of the day, this isn’t the TTC’s issue, it’s Bombardier’s issue. Bombardier are the villains of the piece here,” Byford said on Oct. 16. “They have consistently let Toronto and the TTC and its customers down, and so we’re looking at every possible option to hold them to account.”
Bombardier's troubles are not confined to the rail sector. The company's aerospace division, also based in Montréal, is late and over-budget with its C Series jet aircraft. That program will get an investment from the Province of Quebec worth approximately C$1 billion in exchange for a 49.5% stake and as much as 200 million Bombardier shares. But news of the deal with the province caused Bombardier shares to nosedive 17.4%. That, and raw-materials producer stocks sinking on the prospect of higher U.S. interest rates dragged down the Toronto Stock Exchange. The Standard & Poor’s/TSX Composite Index fell 70.12 points, or 0.51%, to 13,793.04 in Toronto. Canadian stocks slumped on Thursday, Oct. 29, paring the best monthly gain since February. Bombardier is the third-worst-performing stock in the S&P/TSX this year, with a 68% decline.