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Jan 7, 2009

Cessna could lay off more than 1,000

Cessna Aircraft warned employees Tuesday to brace for job cuts, the second time in two months that Wichita's largest employer has announced layoffs.

The company said it is assessing how many additional jobs will be cut as it readjusts its 2009 production plan downward.

However, sources with knowledge of the situation said they expect the number in this round of cuts to reach 1,000 or more.

"We're going through the assessment right now," Cessna spokesman Bob Stangarone said early Tuesday evening. "It has not been determined yet."

Last month, Cessna issued 60-day layoff notices to about 500 Wichita employees and another 165 in Bend, Ore. Cessna employs about 12,000 people in Wichita.

Sources also said that more layoffs are coming at Hawker Beechcraft as well. That has not been confirmed by the company.

In November, Hawker Beechcraft cut 5 percent of its work force, about 490 jobs, because of the slowing economy.

Boeing Wichita also said in November that it plans to lay off 25 percent of its employees, about 800 people, as current programs wind down.

The economy continues to affect Cessna with order cancellations and deferrals, chief executive Jack Pelton told employees in a memo Tuesday.

"As the global economic crisis has continued to deepen, we have to further reduce the 2009 production schedule, and this will regrettably result in additional workforce reductions," Pelton said in the memo.

"As soon as we finalize our revised 2009 production plan, we will communicate what the implications are for our company."

Last year was marked by two distinct and contrasting halves, Pelton said.

Cessna delivered a record number of aircraft in 2008, orders were strong, and the company planned for growth for this year and next.

"The first half was full of promise for the future," he said.

By the third quarter, Citation orders dropped significantly, Pelton said. Cancellations and deferrals seriously affected plans for 2009 production growth.

Fractional ownership company NetJets, a major Cessna customer, deferred a "significant number" of planes scheduled for delivery this year, Pelton said.

"The second half of the year ended by not only putting on the brakes, but also backing up a bit," Pelton said.

Other indicators -- daily use of the fleet and the number of used aircraft on the market -- continue to deteriorate.

"The domestic market remains very soft, and the international markets that were very strong a year ago are now quiet," Pelton said.

Source : The Wichita Eagle
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