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Jan 30, 2009

Cessna: Layoff total to climb to 4,600 following 4Q report

Cessna Aircraft Co. is planning to cut an additional 2,000 jobs in the coming months, according to a letter sent out to employees by Chairman and CEO Jack Pelton on Thursday.

Combined with the previously announced reductions of 2,600 employees, Cessna will now be laying off at least 4,600 in 2009.

Of the cuts, 4,000 will come from Wichita, including the 500 layoffs announced in November and the 2,000 earlier this month, says Cessna Spokesman Doug Oliver. The company will also be letting go 200 people from its facility in Independence, Kan.

It is not knowned how many workers in Cessna's plant in Bend will be effected. In November, 165 were told they would be laid off at the end of this month. The Bend plant, which Cessna bought from Columbia Aircraft Manufacturing Corp. in 2007, will then have 300 workers.

The newest round of layoffs come amid Textron Inc. (NYSE: TXT), parent company of Cessna, releasing its fourth-quarter and full-year financial report.

“These numbers are profound, especially when you look beyond the numbers to the Cessna families that are affected. It’s extremely painful for all of us to lose so many of our colleagues and friends,” Pelton writes. “Making this decision is difficult for your leadership team and me personally. These actions are necessary to secure our future.”

Cessna’s fourth-quarter revenue decreased $64 million from 2007 and segment profit was down $90 million.

In its report, Textron attributed the decrease to used aircraft valuation adjustments, lower revenue mix and increased product development and overhead costs.

The report also says Cessna’s backlog at the end of the fourth quarter was $14.5 billion, up $1.9 billion from the end of 2007.

Overall, Textron reported a fourth-quarter loss from continuing operations of $348 million, $1.44 per share, compared to $247 million, 97 cents per share, from last year. The company had a net loss of $209 million, or 87 cents per share, compared to its fourth-quarter income from 2007.

Revenues for the quarter were $3.6 billion, up 0.04 percent from the previous year.

Backlog for Textron in the quarter was reported at $23.2 billion, up $4.4 billion from the end of last year.

The company projects more reductions will be needed to offset continued losses in 2009.

“Our priorities this year are clear — maximize cash flow and operating performance in our manufacturing businesses and (to) aggressively convert finance receivables at TFC to cash,” Textron Chairman and CEO Lewis B. Campbell said in a written statement. “We’re aligning production to match expected lower commercial demand, reducing nonessential capital spending, freezing salaries, curtailing most discretionary spending, including reductions in non-critical product development, and reducing working capital.”

Source : BizJournals
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