Cessna Aircraft has significantly increased the number of jobs it will cut. It now expects to reduce its work force by 30 percent _ a total of 4,600 people systemwide. That's up from the previously announced 2,660 job cuts as customers cancel and defer orders.
Of the 4,600 cuts, 4,000 will be in Wichita. That includes 500 people who received layoff notices in December and will work their last day Friday.
Cessna employs about 15,000, including 11,700 in Wichita.
The majority of the 60-day layoff notices were being given out this morning. The remainder will be issued over the next few weeks, Cessna spokesman Bob Stangarone said.
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In addition to the work force reductions, Cessna will conduct furloughs beginning in March. It could suspend production on certain lines that may be slow for a couple weeks or more, Stangarone said.
The economy has continued to deteriorate, and that has affected the company's order book.
"We all know the economy is in crisis and the challenges we face are unprecedented in recent memory," chief executive Jack Pelton told employees in a memo this morning.
The numbers " are profound," he said. "It's extremely painful for all of us to lose so many of our colleagues and friends.... These actions are necessary to secure our future."
The company has dramatically changed production plans for this year. It now plans to deliver about 375 jets, down from the 467 it delivered last year and down from production plans announced earlier.Still, the market continues to be in flux.
"It's extremely difficult to forecast this year's delivery number because, ultimately, it will depend on how the economy and other factors affect customer orders and cancellations," Pelton said.
In November, Cessna said it would layoff 500 people in Wichita and 160 in Bend, Ore. And earlier this month, it announced it would cut 2,000 jobs as the economy continues to impact its business.
Besides the cuts in Wichita, Cessna will shed 200 jobs in Independence; 105 in Columbus, Ga.; 120 in Bend, Ore. Cessna also announced it will close its Citation Service Center in Toledo, Ohio, at the end of March.
Cessna took only 30 orders for business jets during the last three months of 2008, the company said this morning on a conference call about its earnings. During the same time, it had 23 order cancellations and "an unprecedented number of deferrals," officials said on the call.In the fourth quarter of 2008, Cessna recorded lower revenue and profit.
Its revenue totaled $1.5 billion for the quarter, down from $1.56 billion a year ago. Profit totaled $198 million, down from $288 million a year ago.
Revenue decreased in spite of the sale of more jets, primarily a higher proportion of Citation Mustang light jet sales.
Profit declined because of used aircraft valuation adjustments, the impact from lower revenue mix and higher product development and overhead costs, the company said.
For the full year, Cessna recorded revenue of $5.66 billion, up from $5 billion a year ago, and profit of $905 million, up from $865 million a year ago.
Cessna's backlog at the end of the fourth quarter totaled $14.5 billion, up $1.9 billion from a year ago.
Textron, meanwhile, recorded total revenue for the quarter of $3.6 billion, down from $3.59 billion a year ago.
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