Cessna Aircraft Cuts Another 700 Jobs

Cessna Aircraft says it is cutting another 700 jobs in the wake of a stalled global economic recovery. The company told employees in an e-mail Tuesday that while cancellations have slowed, the recovery and growth it expected has failed to materialize.

The planemaker says it is adjusting its production schedules and cutting costs. Cessna spokesman Doug Oliver says this round of layoffs comes on top of the 8,000 jobs Cessna has shed companywide since late 2008 as it cut its work force by half. Most came at Cessna's Wichita facilities where the firm now employs 6,200.

“While we are seeing solid performance in most of our other businesses, we have not yet seen a discernable improvement in business jet order activity,” said Textron chairman and chief executive officer Scott C. Donnelly. “Therefore, we are taking further production and restructuring actions at Cessna.”

Textron's manufacturing free cash flow from continuing operations for the year is now expected to be approximately $400 million, compared to a previous target of $500 - $550 million, reflecting lower expected jet deliveries; Textron is Cessna's parent company.

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The following is a letter Cessna CEO Jack Pelton sent to employees Tuesday:

"The gains made in the first half of the year in the global economy have stalled, and Cessna’s performance continues to mirror the lackluster economy. While cancellations have slowed, the recovery and growth we expected to see throughout the year have not materialized, and the timing of any recovery remains uncertain. This requires additional adjustment to our production schedules, and more than ever, cost is critical to our competitive position. We must continue to lower our cost structure to remain competitive.

These continuing challenges have forced us to make the difficult decision to announce an additional work force reduction of 700 employees. This was not an easy decision and not easy news to bring to Cessnans. I know you have questions and concerns regarding these reductions, and we will work diligently to ensure we communicate the full impact to employees as soon as possible.

Our strategy is to defend and protect our current markets while investing in products and services to secure our future, but we can do this only if we succeed in restructuring our processes and reducing our costs. This is not the responsibility only of one organization or department; it means every Cessnan must keep a watchful eye on costs, focus on continuous improvement and quickly and decisively eliminate processes that do not add value.

It is not easy to bring news to you of further reductions, but our ability to compete now and in the future leaves us little choice. I know these are hard times, but we will get through if we work as one team, each of us playing an important role."

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