Cessna Cuts 2,300 Jobs, Closes Plant
Cessna Aircraft Co., the nation's largest builder of corporate jets, is laying off 2,300 workers and closing its Oregon plant as it tries to restructure its product line amid declining plane orders.
The Wichita-based company said Wednesday that it had started laying off 1,600 hourly workers across the company. An additional 700 salaried workers will lose their jobs in mid-June, and a companywide, four-week shutdown starts June 22.
Of the hourly jobs being cut beginning Wednesday, 1,300 will be in Wichita and 121 will come from Cessna's manufacturing plant in Independence, Kan.
Most of the 700 salaried jobs will come from Wichita, the company said.
Cessna also said it is closing its plant in Bend, Ore., affecting 109 jobs, though many of those workers may be offered jobs elsewhere. Production of the Corvalis high-performance, single-engine planes at the Bend plant will move to the Independence facility, the company said.
Cessna and its parent company Textron Inc. acquired the plant from Columbia Aircraft Manufacturing Co. in December 2007 for $26.4 million.
In addition, Cessna is discontinuing its Columbus business jets, built in Wichita.
Cessna has laid off 44 percent of its work force since the first round of cuts was announced in November. The company employed 15,500 people last year before the economic downturn slashed global demand for corporate aircraft.
The latest job losses come on top of 4,600 jobs already cut. About 4,000 of those were in Wichita.
"We certainly haven't seen the bottom," company spokesman Bob Stangarone said. "The economy may be approaching bottom but our business typically lags the general economy by a significant amount."
Stangarone blamed the decline in global demand for aircraft to the poor economy, tight finance markets and the financial health of Cessna's customers. He also cited a "public relations issue" sparked by public attacks by politicians on the use of business jets by companies that have sought government bailout money.
"Timidity didn't get you this far," the Cessna ad read (at left), adding that "true visionaries will continue to fly."
The ad campaign addressed what Cessna called "misinformation" about the business use of corporate aircraft. Most jet-riders are middle managers or technicians, it said, and 85 percent of corporate jets are used by small- or medium-sized businesses.
Parent company Textron Inc. said Tuesday its first-quarter profit fell 63 percent as the recession drove down demand for its corporate jets. It also slashed its 2009 profit outlook. Textron, which also makes Bell helicopters and turf-maintenance equipment, is eliminating 8,300 jobs, or 20 percent of its global work force.
Cessna says it will now deliver 290 to 300 Cessna corporate jets this year - a decline from its previous forecast of about 375 aircraft.