Cessna Aircraft Company plans more layoffs, cuts in production

Cessna Aircraft Company, the biggest maker of corporate jets in the United States, is planning another round of layoffs as well as reductions in production.

Cessna Aircraft Company, a unit of Textron Incorporated, based in Providence, Rhode Island, the United States, manufactures Cessna planes, Bell helicopters and turf maintenance equipment.

The company had laid off 44% of its workforce since it announced the first round of reductions in November, 2008.

It had employed 15,500 people in 2008, including about 12,000 people in its unit in Wichita, Kansas, the United States, before the global economic depression hit the demand for corporate aircraft.

Cessna also plans to move the production of its Corvalis planes – the high-performance, single-engine aircraft – from the plant at Bend to its facility at Independence.

In an e-mail to employees warning them of the impending cuts in the workforce and production, Jack Pelton, CEO of Cessna Aircraft Company, said workers would be notified about the latest cuts by June 19, 2009. Those employees affected would be given 60-day layoff notices.

Pelton, however, did not mention how many employees would lose their jobs this time around.

In the email, posted on the website of the newspaper Wichita Eagle, Jack Pelton said: “Cancellations of orders have not stopped, and the market for new aircraft remains frozen as customers wait to see if the recovery forecasted comes to fruition.”

Details of the cuts in production and the workforce were still being worked out, he added. 

In the e-mail to the employees, Jack Pelton reassured them that “they continue to deliver new aircraft and develop new products and customer support, but the industry continues to struggle as the economic recovery remains very slow and the negative perception surrounding business jets creates a battle to keep our customers sold.”

Even as Cessna Aircraft Company had initially planned to make 535 jets in 2009, cancellations had forced he company’s latest projections to nearly 300 planes. It was the mid-sized and the large-sized jets that were hit the hardest by cancellations of order, a statement from the company said.

Thought the demand for the smaller Cessna planes remained good, the lower price point of order meant that the company’s profit per unit was also lower, the statement added.

Cessna Aircraft Company said it would update its financial outlook when it reports its second-quarter results on July 28, 2009.