September 27, 2010
By Alton K. Marsh
Less than a week after Cessna Aircraft Co. reduced its workforce by 700 workers, Hawker Beechcraft announced a workforce reduction of 350 workers.
Both reductions came in the same week that a presidential economic advisory group—the only group with authority to decide such things—ruled that the current recession ended in June 2009. The aircraft manufacturing industry lags behind any economic recovery, Cessna and Hawker Beechcraft officials have said in the past, waiting for customers to return to profitability, for the supply of used aircraft to dry up, and for banks to resume financing.
Two of those factors—used aircraft and financing—were cited by Hawker Beechcraft Chairman and CEO Bill Boisture in explaining the latest workforce reduction of 350 salaried employees. Decisions about where the reductions will be made will be completed by Nov. 1, Boisture said in a letter to employees.
The availability of high-quality used aircraft and the lack of financing have combined to depress prices on private and business aircraft, Boisture said. The market for new production aircraft has stagnated at a “very low level,” he said, and is not improving. In fact, it’s slightly down and indicators of an upturn are not in sight and will not be for a year or so, he said.
No additional large-scale layoffs of hourly employees are expected, but small reductions or short furloughs, “…may be required to modulate production line output in an attempt to reduce unsold aircraft inventory,” Boisture said.
AOPA Pilot Senior Editor Alton Marsh has been a pilot since 1970 and has an airline transport pilot certificate and instrument and multiengine flight instructor certificates, aerobatic training, and a commercial seaplane certificate.
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