April 18--As Cessna Aircraft plans to cut business jet production for the rest of the year, it appears it will also be cutting jobs.
"Specific details about cuts in production schedules and corresponding workforce adjustments will be communicated soon," Cessna CEO Scott Ernest told employees this week in a memo.
"Cessna continues to operate within a challenging economic environment and is experiencing a slower-than-expected recovery for the aviation industry, particularly in the light jet segment," Ernest said in the memo.
Machinists union officials are expecting job cuts.
"We believe with the production rates that there will be a layoff," said Frank Molina, Machinists District 70 president and directing business representative. "The company has not officially come out and said we're cutting so many heads."
But earlier this month, it began offering voluntary buyouts for salaried positions to reduce costs.
"Usually if we have one, we have the other," Molina said.
Cessna had been hiring and recalling hourly workers, Molina said. Since the beginning of 2013, it's hired or recalled 100 hourly employees, he said.
A group of newly hired employees began work on Monday, Molina said.
Cessna employs 5,800 in Wichita, including 2,700 represented by the Machinists union.
On Wednesday, Cessna's parent company, Textron, announced production cuts when it released first quarter results.
Cessna posted an $8 million loss in the first three months of 2013.
The company delivered 31 jets in the quarter, down from 38 a year ago.
Light-jet sales remain weak despite traditional leading indicators such as improved corporate profits.
As a result, Cessna will be reducing production volumes and delivery expectations for the year, the company said.
Cessna spokeswoman Stephanie Harder said Thursday that the company is evaluating production based on the new forecast.
"We don't have an update or specifics," Harder said.
In a statement, the company said that it continues to operate in a challenging economic environment and is experiencing a slower-than-expected recovery in the aviation industry, especially in the light jet segment.
"Cessna's outlook for the year has been reduced from its previous position and we are matching our production to the revised forecast and implementing other appropriate cost actions," the statement said. "As we continue to respond to our customers' needs, we remain committed to new product investments and are maintaining focus on bringing six new products to market -- including the TTx, Turbo Skylane JT-A, Grand Caravan EX, Citation M2, new Citation Sovereign and new Citation X -- and future introductions with the Citation Latitude and Citation Longitude."
Contact Molly McMillin at 316-269-6708 or [email protected].
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