Bombardier Files Suit Against Amtrak.

Business Editors

NEW YORK--(BUSINESS WIRE)--Nov. 8, 2001

Bombardier Corporation, a subsidiary of Bombardier Inc. (TSE:BBD.A.) (TSE:BBD.B.), filed suit against Amtrak today in the United States District Court for the District of Columbia claiming that Amtrak disrupted its ability to produce and deliver the high-speed trainsets and locomotives for the Northeast Corridor (Acela Express) in a timely and efficient manner.

The Corporation seeks to recover at least US$200 million in damages, which include additional and unwarranted costs incurred during the execution of the Acela Express project. These costs have already been accounted for by the Corporation, as part of the total project costs.

Bombardier's claim states that Amtrak did not provide track upgrades necessary for high-speed service. As a result, the trains had to undergo more than a year and a half of additional testing. "Track quality and train design go hand in hand," said Peter Stangl, President of Bombardier Corporation. "Had Amtrak delivered the quality of tracks required for high-speed service, we could have avoided costly and time-consuming testing and the trains would now be running at full speed. Trip times would be reduced and passenger comfort would be increased."

Bombardier's complaint also states that Amtrak provided inaccurate information about the dimensions of tunnels, electromagnetic interference on the Northeast Corridor and track geometry. It further contends that Amtrak delayed decision-making on major technical issues as well as a series of design details, which in turn halted progress in critical areas and led to production modifications and design revisions.

"We ask that Amtrak take responsibility for its shortcomings on the Acela project, so that we can resolve outstanding issues. Bombardier Transportation has delivered all 15 locomotives and 15 of the 20 trainsets called for in the US$710 million contract awarded in 1996, and expanded in 1998, and they are performing well," said Stangl. "We believe the facts of this case will show that Amtrak disrupted our ability to deliver the Acela trainsets and locomotives on time and on budget, and caused major costs overruns."

The 46-page complaint comes after repeated attempts by Bombardier to achieve a settlement through negotiations. "While we regret having to resort to legal action in this matter, we have reached an impasse in our discussions with Amtrak and see no other alternative to protect our rights and resolve this dispute," added Stangl.

"We are proud to be associated with the development and realization of the first high-speed train project in North America. We are delivering a very high quality product that obviously suits the needs of Amtrak, as indicated by the very positive comments, both public and private, that we have heard from Amtrak and its passengers," concluded Stangl.

Bombardier Transportation is the global leader in the rail equipment, manufacturing and servicing industry. Its wide range of products includes passenger rail cars and complete rail transportation systems. It also manufactures locomotives, freight cars, propulsion & controls and provides signaling equipment and systems.

Bombardier Inc., a diversified manufacturing and service company, is a world leading manufacturer of business jets, regional aircraft, rail transportation equipment and motorized recreational products. It is also a provider of financial services and asset management. The Corporation employs 79,000 people in 24 countries in the Americas, Europe and Asia-Pacific and its revenues for its fiscal year ended Jan. 31, 2001 totalled $16.1 billion Cdn.