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[Kevin Leclair]

MONTREAL -- Stung by the soaring Canadian dollar and rising commodity prices, Bombardier Recreational Products Inc. (BRP) is restructuring operations and slashing 800 jobs, more than 10 per cent of its work force.

The maker of snowmobiles, watercraft, all-terrain vehicles and outboard motors said yesterday 600 of the job cuts are to come from Canada, 100 in the United States and another 100 outside North America. Of the Canadian staff, 200 will be offered preretirement packages, 200 will be laid off with the possibility of being called back and 200 will be let go permanently.

The manufacturer of the world-famous Ski-Doo snowmobile, based in Valcourt, Que., said the employee reductions, as well as a decision to put two outboard motor parts plants in the United States up for sale, are the result of the dollar's continued strength against the U.S. currency and rising commodity prices, including the cost of oil.

José Boisjoli, BRP's president and chief executive officer, said in a statement:

"The goal is to concentrate our activities on our core competencies, which are design and engineering, final assembly and the relationship with the market.""Considering the external pressures, especially with the Canadian dollar becoming increasingly stronger, we needed to take measures accordingly."

Valcourt, as well as Sturtevant, Wis., will remain the company's two main North American manufacturing sites. Other sites are in Ciudad Juarez, Mexico; Rovaniemi, Finland; Gunskirchen, Austria; and Dong Guan, China.

The decision came without warning.

Just last month, BRP posted a big increase in second-quarter profit and revenue, saying the negative impact of the stronger Canadian dollar was offset by improved sales of snowmobiles, watercraft and ATVs as well as a stronger product mix.

The rising dollar makes exports to the U.S. market more expensive and reduces the value of U.S.-dollar-denominated sales on the company's books.

The dollar has risen 31 per cent since the end of 2002, when it was changing hands at 63.4 cents (U.S.). Since the end of July, 2004, alone, it has risen more than 8 per cent. The currency closed yesterday at 83.31 cents.

Most of the 600 Canadian jobs being cut are office and plant jobs in Valcourt and nearby Sherbrooke. BRP employs about 3,500 in the region.

BRP spokesman Pierre Pichette said in an interview that the company must take the measures to better position itself against tough competition from aggressive U.S. and Asian rivals, including Honda, Yamaha and Polaris.

He said BRP will continue to examine the options it has in terms of finding lower-cost suppliers but it is committed to maintaining Valcourt -- where inventor-founder Joseph-Armand Bombardier built the early versions of the snowmobile more than 60 years ago -- as its most important manufacturing centre.

Staff to be let go have yet to be identified, but the cuts are to be made before the end of the year.

Former parent Bombardier Inc. sold BRP last year for $960-million to an investor group led by U.S. private equity giant Bain Capital LLC that includes members of the Bombardier founding family and public pension fund manager Caisse de dépôt et placement du Québec.

BRP employs about 7,500 people worldwide. Among other brand names it makes are the Sea-Doo and Johnson and Evinrude outboard engines.

BRP said the two facilities up for sale are in Delavan, Wis., and Spruce Pine, N.C. Potential strategic buyers who will keep the plants open and continue supplying BRP are being sought.

Source: The Globe and Mail

"Spokesman Pierre Pichette said 200 of the employees will be offered preretirement packages, 200 more will be laid off with a possibility of recall and 200 others will lose their jobs permanently." - DuluthNewsTribune.com