For the third time in six months, the ax falls at the Quebec truck and bus manufacturer Lion Électrique.
This time, the headcount reduction aimed at reducing expenses affects approximately 120 employees, primarily based in Canada in corporate and product development roles.
Management maintains that the initiative announced Thursday should not have a negative impact on production capacity.
These new cuts bring to 370 the number of jobs eliminated at Lion since November.
Lion will now have approximately 1,150 employees, of which more than 600 are assigned to production positions.
In addition to reducing headcount, Lion says it continues to deploy measures to reduce its cost structure, including in the areas of third-party inventory logistics, rent expenses, consulting, product development and professional fees.
“Current market dynamics, particularly delays encountered with the Canadian Federal Zero Emission Transit Fund, are having a persistent negative impact on our school bus deliveries, forcing us to further reduce our workforce. work,” comments the founder and CEO of Lion, Marc Bédard, in a press release.
“It is essential that we adjust our workforce to the evolution of our environment. We remain confident in our long-term growth and that of our industry. By focusing on our profitability objectives and production needs, we are committed to continuing with determination the execution of our business plan. »
A first wave of layoffs that sent 150 people out of work first occurred in November.
Then, in February, the evening shift at the Saint-Jérôme factory found itself in neutral. Result: 100 additional layoffs were announced.
The workforce reduction and cost reduction measures unveiled Thursday, combined with the measures announced in November and February, are expected to generate annualized savings of $40 million.
The Quebec manufacturer is under severe financial pressure. There were only US$30 million left in its coffers at the start of the year. His credit facility offered him an additional 63 million US dollars. This seems little given that the company, still in deficit, had “burned” 110 million US dollars last year.
However, the wave of investments, which resulted in the inauguration of a production plant in the United States (Joliet) as well as a battery manufacturing plant in Mirabel, is over. This should provide some relief for the company.
Leo also faces another headwind. Half of its order book is at risk due to delays in processing grant applications by Ottawa under Infrastructure Canada’s Zero Emissions Public Transit Fund (ZFTF).
This program aims to accelerate electrification among public transport and school bus operators. It can cover up to 50% of acquisition costs. Several announcements made by Lion regarding school bus orders in Canada highlighted that the contract was also conditional on obtaining grants from the Fund.
Since the start of the year, Lion’s stock on the Toronto Stock Exchange has continued to plummet. The stock fell 37%. On Wednesday, it closed at $1.44. This gives the company a market value of 271 million.
reference: www.lapresse.ca