Cessna Aircraft told employees this morning that more job cuts are coming as the company experiences more order cancellations and deferrals.
Cessna has revised its production schedules for 2009 and for 2010, said Cessna spokesman Bob Stangarone.
The company also is planning a two-week company-wide shutdown that will run from July 6 through July 17, Stangarone said.
“We continue to see a slowdown, (and) financing continues to be a problem for many customers,” Stangarone said. “As a result, there continues to be a reduction in demand.”
The company is refining its projections to determine the extent of the work force reduction, the e-mail to employees said.
“We’re working as hard as possible to minimize the impact on our employees,” Stangarone said.
More information will be released at the end of April when Cessna’s parent company, Textron, releases its first quarter financial results.
In recent weeks, many experts have pointed to signs in the economy that seem to indicate the country may be at the bottom of the economic cycle, Cessna chairman and CEO Jack Pelton said in today’s e-mail to employees.
“We have seen a trend of consecutive stock market increases, and we’re seeing some favorable indicators in the housing market and retail sales,” Pelton said. “We take hope in all this, though it is tempered when the focus returns to our business and our industry, which historically lags well behind the economic cycle.”
Still, for customers, “their economic health may have stabilized, but their decision to take delivery of the jet they ordered two years ago now hinges on increased profitability which is still some time away,” Pelton said. “The net result continues to be a reduction in firm demand by way of delivery deferral, and in many cases outright cancellation.”
Since November, Cessna has announced cuts of 4,600 people, including 4,000 in Wichita.
Today’s news comes as Textron announced that it plans to lower production rates at Cessna and its industrial business units. Most of the Textron’s commercial markets continue to soften in the economic environment and credit markets at its Textron Financial Corp. remain challenging.
“Despite the tough environment, (Textron’s) plan to generate cash from the combination of manufacturing operations and the collection of finance receivables at TFC is on track,” Textron chairman and CEO Lewis Campbell said in a statement.
Textron will release its first quarter financial results on April 29.
