Lion Electric eliminates 120 more jobs | The slimming diet is not over

Lion Électrique hasn’t finished counting its pennies. After a third workforce reduction in six months – a decision attributed to the bureaucratic heaviness of a federal program – the manufacturer of school buses and electric trucks is continuing its slimming regime by scrutinizing other expenses.

Lion Électrique hasn’t finished counting its pennies. After a third workforce reduction in six months – a decision attributed to the bureaucratic cumbersomeness of a federal program – the manufacturer of school buses and electric trucks is continuing its slimming regime by scrutinizing other expenses.

Rent expenses, professional fees, consultation and product development: the Quebec company, financially supported by Quebec and Ottawa, seems to want to turn over all the stones in the hope of alleviating the financial pressures that have afflicted it for several months now.

The ax once again fell for the company based in Saint-Jérôme, in the Laurentians, on Thursday. Some 120 people who occupy “corporate and product development functions” lose their livelihood. These new cuts bring to 370 the number of jobs eliminated since last November. Lion once again mentions the “delays” of a federal program, which puts half of its order book at risk.

“We deeply regret the impact this decision will have on our employees,” said its founder and CEO, Marc Bédard. However, it is essential that we adjust our workforce to the changing environment. »

Mr. Bédard was not available for interviews on Thursday. Lion estimates that the cuts announced since last fall will allow it to save $40 million annually without having a negative impact on the capacity of its production plants in Saint-Jérôme and Joliet (Illinois).

From worry

The new cuts continued to fuel investor fears. On the Toronto Stock Exchange on Thursday, Lion shares hit a new low ($1.28) before ending at $1.33, down 7.6%, or 11 cents. On Wall Street, where Lion’s stock is also traded, the stock slipped to below US$1 — a first.

The Quebec specialist in school buses and electric trucks is under severe financial pressure. Only US$30 million remained in its coffers at the start of the year. His credit facility offered him an additional 63 million. This seems little given that Lion, which is still in deficit, “burned” 110 million US dollars last year.

The company believes, however, that its wave of investments aimed at completing its assembly line in the United States and its battery factory in Mirabel is over, which should offer it some respite. It estimates that its capital expenditures should be less than US$10 million this year.

Bureaucratic heaviness

It’s the Fund for Zero Emission Public Transport (FTCZE), in place for more than two years, that is giving Lion headaches. This program aims to stimulate electrification in niche areas such as public and school transportation. It can cover up to 50% of acquisition costs.

Many of the orders announced by Lion emphasized that they were conditional on federal grants. Even though the FTCZE is in place, the money is still not forthcoming. This red light appeared on the radar of financial analysts.

“Lion’s customers are still facing delays, which is leading to an increase in inventory and the cancellation of certain orders,” underlines analyst Rupert Merer, of National Bank Financial, in a note sent to his clients.

Quebec already has its own school transportation electrification program, but in the rest of the country, most provinces are banking on the FTCZE to accelerate the electric shift in school transportation. It is the school transporters who must complete the procedures with Ottawa to be entitled to the subsidies. In an email, Lion calls this process “complex” with delays that “continue to pile up.”

The company agrees that an unblocking would quickly be reflected in its performance.

“If the FTCZE accelerates the processing of these files and approves the financing of school transport projects, this will have a positive impact on our deliveries in relation to the orders we already have and other orders could also be added,” explains Lion, without providing precise data.

Asked about the bad news announced at Lion in the National Assembly, the Minister of the Economy, Innovation and Energy, Pierre Fitzgibbon pleaded for an improvement in the effectiveness of federal measures.

A file is moving forward

Encouraging news could await Leo. In the letter dating from last December, federal Minister of Housing, Infrastructure and Communities Sean Fraser reiterated his offer of subsidies to Lang Bus (Ontario) for an order of 200 copies of the LionC. The Press mentioned this missive last February. The order in question was announced in 2021.

According to a federal source, the delay in this file is not attributable to the Department and a positive outcome seems possible in this file. In his missive, Mr. Fraser emphasized that the federal government was ready to finance 33% of the order, or 21.6 million.

It remains to be seen when this agreement could be announced in due form and if other agreements are finalized between Ottawa and school transporters established outside Quebec.

With Charles Lecavalier, The Press