Cessna to cut 165 jobs at Bend factory
Published 4:00 am Thursday, November 13, 2008
- Cessna to cut 165 jobs at Bend factory
Cessna Aircraft Co. announced Wednesday it will eliminate 165 jobs at its Bend factory, or more than a third of its work force, through either voluntary buyouts or layoffs. The cuts won’t take effect until January to comply with federal labor law.
As of last week, the company employed 478 people at its plant on the east side of the Bend Municipal Airport.
The cuts follow an announcement last week from the Wichita, Kan.-based company that an unspecified number of jobs would be trimmed across Cessna to deal with an expected companywide slowdown in aircraft orders in 2009.
“It’s very disappointing when it comes to layoffs,” said Roger Lee, the executive director of Economic Development for Central Oregon.
EDCO helped Cessna research the area before the company agreed to purchase Columbia Aircraft Manufacturing Co. out of U.S. Bankruptcy Court for $26.4 million last December.
“But exceeding disappointing is closure, so layoffs means there are still people working and producing aircraft and if it helps the health of the company, that’s positive — but not positive for those laid off,” Lee said.
Cessna spokesman Doug Oliver, based in Wichita, said the announcement was made Wednesday morning in a company e-mail sent to all Cessna employees. The company will trim another 500 jobs in Wichita, amounting to a 4.1 percent reduction of the 12,000-person work force.
The e-mail did not specify who would be let go, saying only that those laid off would be notified in the next few weeks. In order to comply with the federal Worker Adjustment and Retraining Notification Act, the layoffs won’t be effective until 60 days after notice is given.
Oliver said buyouts are being offered to reduce the number of mandatory layoffs.
In addition, Oliver said the cuts were not furloughs and reassignment to other Cessna plants is not an option due to the companywide slowdown.
At its Bend facility, Cessna manufactures piston-driven turboprop airplanes, made of lightweight carbon fiber material, based on designs originally developed by Columbia.
There are two models, the 350 and 400, which retail for $535,000 and $620,000, respectively, according to Pete Bevans, the aircraft sales manager for Hillsboro Aviation, Oregon’s sole exclusive Cessna dealership.
Columbia, a spinoff from Redmond-based kit-plane manufacturer Lancair International, declared bankruptcy in September 2007. Job reductions are not new for the company’s workers, whose numbers were pared significantly under Columbia. The company at one time in 2006 employed more than 700 people, but Columbia, among other moves, cut its staff by about 43 percent after one layoff and two furloughs in 2007.
Next to Cessna’s Bend plant is kit-plane manufacturer Epic Aircraft. General Manager Dave Hice said the company employs roughly 200 and is not planning any layoffs.
Hice said Epic differs somewhat from Cessna because Epic’s business model requires a customer to first commit to build a plane before the company can begin construction. Per FAA regulations, the purchaser of a kit plane must build 51 percent of the plane, a process Epic sometimes will assist.
Hice said Epic has not seen a slowdown in orders, but it is seeing fewer customers willing to pay more to purchase planes farther along in production. Epic delivers approximately 12 planes a year, Hice said.
In March, Cessna announced it had booked orders for 150 Columbia models at its annual sales retreat. Oliver said the company was expecting to deliver 150 models in 2009, but that forecast has changed. Oliver was not able to say by how much.
Bevans, the Cessna dealer in Hillsboro, didn’t think the 350 and 400 models were selling as well as Cessna hoped, but he attributes that to the softening economy.
Shares of Cessna’s parent company, Textron Inc., closed Wednesday at $13.82, down 6.81 percent, in New York Stock Exchange trading.