Bombardier shareholder hopes contract dispute is resolved out of court
By Allison Lampert
MONTREAL (Reuters) - The chief executive of Canada's second largest pension fund, which owns a 30 percent stake in Bombardier Inc.'s (BBDb.TO: Quote) transportation division, said on Friday he hopes that a dispute between the company and Toronto's transportation agency over a rail car contract will be resolved out of court.
Bombardier and Metrolinx, the provincial agency in charge of transportation in and around Toronto, have repeatedly clashed over lengthy delivery delays on a contract for light rail cars.
Michael Sabia, chief executive of the Caisse de depot et placement du Quebec, acknowledged that the plane and train maker needed to make improvements in delivering the rail cars, but said Bombardier was "making progress."
Sabia said he did not think that the conflict with Metrolinx would have a long-term impact on Bombardier.
"I think it's a difficult circumstance right now," he told reporters in Montreal. "But one of the good things about black eyes is that they heal."
Bombardier shares were down more than 4 percent in afternoon trading.
Bombardier is seeking a court injunction at a hearing on March 21 in response to "unjustified threats to terminate" the contract for 182 cars, the company said in a Feb. 10 statement. Metrolinx previously filed a notice saying it wanted to terminate the contract.
"We're very hopeful that (the) situation is resolved amicably through negotiations and not through a long period of legal action," Sabia said. Continued...