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Bombardier signs $700-million IT deal with IBM in cost-cut push

The fuselage of a Bombardier 350 Challenger jet is seen on display for attendees to view at the Milken Institute Global Conference in Beverly Hills, Calif.

MIKE BLAKE/REUTERS

Bombardier Inc. awarded International Business Machines Corp. a $700-million contract to find cost savings and improve information-technology operations in the Canadian manufacturer's rail and aerospace businesses.

The six-year agreement spans 47 countries and will "generate recurring savings," Bombardier said in a statement Tuesday.

Chief Executive Officer Alain Bellemare is pushing to reduce expenses as he pursues a turnaround plan after Bombardier's C Series jetliner entered service more than two years late and $2-billion over budget. Bellemare announced plans last year to cut more than 14,000 jobs.

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"Bombardier is working to improve productivity, reduce costs and grow earnings," Sean Terriah, chief information officer for aerospace and corporate functions, said in the statement.

The Montreal-based company sparked public outrage and shareholder opposition by increasing executive pay almost 50 per cent despite cutting jobs and receiving taxpayer aid. Several major Canadian pension funds voted against the compensation plan and withheld support from Chairman Pierre Beaudoin at Bombardier's annual meeting last week.

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