January 29, 2009
By Alton K. Marsh
Earlier in January, Cessna Aircraft Company announced a job reduction of 2,000. But Textron, Cessna’s parent company, said 2,000 additional cuts are necessary because of the rapidly declining economy. That puts the total layoffs at Cessna at 4,600. Cessna employees learned of the cuts in a letter from Cessna President and CEO Jack Pelton.
Textron officials predicted “the most challenging year ever…unprecedented in decades.” The warning came in an earnings conference call to investors Jan. 29. “I just don’t know where the economy is going to go,” said one Textron official.
Although Cessna set a new record for deliveries of 467 aircraft in 2008, there were also 23 cancellations and an “unprecedented” number of order deferrals. This year, Cessna expects to deliver only 375 aircraft.
With cost-cutting measures in place, Textron still expects that Cessna will experience a positive double-digit financial performance. The overall outlook is good thanks to such measures. Cessna had 131 deliveries in the fourth quarter, a record-setting “capstone” compared to previous quarters. Revenues, however, dropped $64 million. Cessna now expects the first quarter of 2009 to be the most difficult. Cost-cutting measures will not show an ameliorating effect until the second quarter.
Of all the jet models, it is the most profitable lines that are suffering the most. However, the popular Mustang entry-level jet has a firm backlog and did not suffer as much from cancellations or delays. Textron officials said there were a number of cancellations in the fourth quarter of aircraft that were to be delivered at year-end. As a result, other customers now move up in earlier delivery dates. Thirty customers who had not expected their jets until 2010 will now receive those aircraft in 2009. However, that takes restructuring of the manufacturing line that will not be completed until the second quarter.
Collaboration between the German government, academia, and airplane manufacturers may make future aircraft cabins more protective of pilots and passengers. The Safety Box team plans to apply auto racing technology to general aviation.
A father and his 14-year-old son were helping another pilot ferry a newly purchased aircraft from California to their home field in Virginia. The three made an overnight stop in Albuquerque before flying on to Illinois for fuel. But shortly after they parked the aircraft in Marion, Ill., they were approached by as many as 18 uniformed and non-uniformed law enforcement officers who came running toward the airplane.
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