Cessna CEO gets warm welcome
Published 4:00 am Thursday, November 29, 2007
- Jack Pelton, the president, chairman and CEO of Cessna Aircraft Co., listens to media questions Wednesday at Columbia Aircraft Manufacturing Corp. in Bend. Cessna is buying the Bend airplane maker for $26.4 million in a deal expected to close Dec. 4. On Dec. 5, Pelton said Columbia airplanes will be repainted and the front of the building will be flying the Cessna flag.
When Cessna Aircraft Co. Chairman and CEO Jack Pelton addressed Columbia Aircraft Manufacturing Corp. workers Wednesday, the 400-plus Bend employees — many of whom have endured layoffs, furloughs and slashed hours — gave him a standing ovation, according to people in attendance.
Columbia engine worker Penny Ecker said afterward that she stood to applaud because Cessna — the world’s largest manufacturer of general aviation aircraft with $5 billion in projected revenues this year — holds the promise of blue skies for her financially troubled employer.
“It’s a morale boost,” the Sisters resident said Wednesday. “It’s a relief that we still have our jobs.”
Columbia workers have felt their employer’s turbulence in recent months, even before the company filed for Chapter 11 bankruptcy on Sept. 24.
Cessna, which has an established service and distribution network throughout the world, promises to invest tens of millions of dollars into getting Columbia profitable, Pelton said. Additionally, he will eventually add more workers and production capacity in Bend, making the Central Oregon plant a new platform for Cessna’s increasing interest in composite airplanes. Composite aircraft are made with fiberglass and carbon composite materials that are applied in sheets, glued and processed with heat and pressure.
Cessna currently makes everything from aluminum single-engine piston aircraft to business jets.
Pelton won an auction for Columbia on Tuesday in U.S. Bankruptcy Court in Portland with a total bid of $26.4 million. It beat out Melville, N.Y.-based Park Electrochemical Corp.
Pelton said the Bankruptcy Court will deal with Columbia’s reported $60 million in unsecured debt to 1,000 to 5,000 creditors, saying Cessna only purchased Columbia’s assets and certain liabilities.
On Wednesday, Pelton addressed 400-plus workers at the Bend plant to let them know their jobs are secure, their hours will soon increase from 32 per week to 40, and the single-engine piston aircraft company has a secure future in Bend.
Demonstrating his company’s strength, Pelton said at a Wednesday press conference that Wichita, Kan.-based Cessna has 15,000 employees globally. Cessna will comprise about 38 percent of the $13 billion in projected annual revenues this year of its parent company, Textron Inc. of Providence, R.I.
Columbia products will bear the Cessna name as early as Dec. 5. Pelton said Cessna will honor warranties and product deposits held by 600 existing Columbia airplane owners.
Pelton says his goal is to improve the Bend facility, adding that his Wichita headquarters is operating at capacity — calming fears that Cessna might relocate Columbia to the Midwest.
As Columbia transitions into Cessna, Pelton said Cessna’s vice president and general manager, Rod Holter, will move to Bend to guide the change. Pelton, though, doesn’t know yet know who will permanently oversee the Bend division. By early next year, Pelton expects the management system will be finalized.
As far as Columbia’s existing employees, Pelton said they will keep their seniority and benefits, including accrued vacation time, under Cessna.
He says he’s never received such a warm reception as the one he got Wednesday in Bend.
“I saw the enthusiasm and pride,” he said. “Employees are our most valuable asset.”
Columbia, which at one time last year employed more than 700 people, has pared its staff by about 43 percent after one layoff and two furloughs this year. In late March, it temporarily furloughed 185 workers, citing a need to improve production and manufacturing processes. Workers were not paid, but they received benefits during their absence. Most of those workers returned to work by July.
The furlough came two weeks after Columbia laid off 59 workers.
The workers were let go because the company said it was overstaffed after a June 2006 hailstorm damaged airplanes, necessitating the company to slow production and divert workers to repairs.
Columbia employees Al Lynch and Bob Falen weathered those storms.
Falen, of Bend, an assembly line team leader, has worked with Columbia for five years. He said Wednesday that Pelton received the warm welcome because Columbia employees had been living and working in uncertainty. He said rumors had swirled for months over the bankruptcy and sale, making employees fearful for their future.
“Considering all the ups and downs, morale is pretty good,” Falen said. “Now we know.”
Lynch, of Redmond, a four-year employee who does flight testing on Columbia planes, said he was rooting for Cessna to buy Columbia.
“They are an aircraft manufacturer,” he said, “we can share information (and expertise) with them.”
Cessna’s purchase is a relief, he added, especially to the many workers with families to support.
“(Everyone) had very mixed emotions,” Lynch said. “We were afraid for the future and our families — we wanted to make sure everything was fine for us.”