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Archive for Wednesday, November 5, 2008

Cessna warns its workers of production, force cuts

November 5, 2008

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— Cessna Aircraft Co. plans to reduce its work force levels amid the global financial crisis, the company's chairman and chief executive officer warned in an e-mail to employees Tuesday.

"Orders are slowing for jets and pistons, daily aircraft utilization across the global fleet is declining, and used aircraft inventories are rising, all indicating that the global economic and financial crisis is impacting our customers," CEO Jack Pelton wrote.

Pelton said changes to the Wichita-based company's 2009 production schedule will result in a need to reduce its work force level, but gave no specific numbers. The e-mail said employees would learn the timing and scope of the reductions within a few days.

The company said that while it will have a slight increase in total deliveries for 2009 compared with this year, the number will be lower than what was planned.

Cessna had previously targeted 535 Citation aircraft for delivery in 2009, compared with 475 this year, said company spokesman Robert Stangarone. The company is not releasing the latest delivery estimate.

"We are examining every possible option including aggressive cost reduction, redeployment of people, voluntary separations before we get to the final option of involuntary job reductions," Stangarone said.

The news comes just a day after workers at Hawker Beechcraft received letters telling them their company planned to cut nearly 500 jobs. Some Cessna customers who made aircraft orders have lost their financing, Stangarone said.

Strong international sales had helped keep aircraft orders up for business jets and had helped Cessna and other manufacturers keep up a big backlog even as the U.S. economy was struggling. But that has changed as worldwide credit tightens.

"What we are finding is that the international economies are very much linked," Stangarone said. "And that is why I think people are referring to this as a global economic and financial crisis."

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