MONTREAL - Bombardier Transportation is investing $17 million to expand its Quebec railway manufacturing operations, including the building of new a test track in La Pocatiere, Que.
The railway division of Bombardier Inc. (TSX:BBD.B) is also creating a product design and development centre for North America at its Canadian headquarters in St-Bruno, Que.
Neither move is expected to create jobs in the short-term. But additional jobs could be created in coming years since several large projects are being launched, particularly in the United States.
Raymond Bachant, president of Bombardier Transportation's North American operations, said Monday the Quebec investments will ''enhance our competitive edge and maintain our leadership.''
The design centre on the south shore of Montreal will encourage greater involvement of customers, suppliers and partners in the research and development of new technologies to be used in its manufacturing.
The new centre will be used for designing and prototyping passenger rail vehicles that will be manufactured around the continent. It will also partner with institutions in the region.
The site was in competition with five other regions in North America, Bachant said at a news conference.
Construction will begin at the end of the summer, with the opening slated for next spring.
The new indoor test track at its main Quebec assembly plant will allow engineers to perform qualification tests on the new Montreal Metro subway cars.
The one-kilometre track will conduct brake and maximum speed testing. A ''static'' testing site will also be built alongside the new test track.
Bombardier will benefit from government assistance in the form of an unspecified amount of research and development tax credits.
On hand for Monday's announcement was Quebec Transport Minister Sam Hamad, who noted that the Montreal subway project is currently on schedule.
Bombardier and France's Alstom formed a joint venture for the $1.2 billion contract that will deliver rubber-tired subway cars between 2014 and 2018. Bombardier's share is $742 million.
On the Toronto Stock Exchange, Bombardier's shares closed at C$6.60, down 3.8 per cent or 26 cents in Monday trading.
Copyright 2008 LexisNexis, a division of Reed Elsevier Inc. All rights reserved.