The Good Side Of Bad News
300 Cessna Jobs Spared...
Good news in the aviation industry, these days, is when the bad news isn't as bad as everyone thought. The bad news Friday for 900 Cessna workers is that they were laid off. At the same time, it was good news for 300 workers who were told in March they'd also be laid off but found themselves spared. "The original purpose of our reductions was to match our work force with out production rate," Cessna's Jessica Myers told The Wichita Eagle. "With the 900, we were able to do that." The layoffs brought the number of jobs lost at Cessna to 3,025, leaving 8,300 ... until today. About 6,000 employees began a seven-week furlough today. All the cuts and furloughs come as Cessna continually revises its sales projections downward. Estimates now include up to 190 business jets built this year ... down from an early projection of 250, which later dropped to 220. A key factor in the drop was cancellation of a big order by NetJets, Cessna's biggest customer.
...Bombardier Keeping Wichita Plant...
Bombardier's good news for Wichita is that it will keep building the Learjet 60, 45 and 40 there. However, it also currently builds two other bizjets, the Lear 45XR and Challenger 300, in Wichita, and CEO Paul Tellier did not mention those models in his conversation with the Eagle. He did, however, say he was pleased with the red-carpet treatment Bombardier has been getting from local and state governments. "They are doing everything they can to provide an environment conducive to us being competitive," Tellier said. Earlier this year, Bombardier announced that one or more of its six plants worldwide would close and that Wichita had the highest costs. But employees stepped up with a wage freeze and benefit concessions. The city recently forgave $36,000 a year in rent on land, and the city and county agreed to split the $550,000 cost of paving Learjet Way. And local government is also making a pitch on Bombardier's behalf to fund improved navaids at the airport. Now, according to spokeswoman Dominque Dionne, there are no plant closures planned and the company continues work with staff to reduce costs.
...Boeing Says Worst Is Over
Chicago-headquartered Boeing joined the better-news flurry with CEO Phil Condit's prediction that the worst is over for his company. Condit told the Chicago Tribune that most of the 35,000 people Boeing had planned to cut are already gone. "There will be some more [layoffs] ahead but not many," he said. "We are virtually on those low production rates now." He said 9/11, the war in Iraq and severe acute respiratory syndrome (SARS) combined to knock the stuffing out of the big airplane business. "It is the worst downturn since airplanes existed," he said. SARS remains the biggest unknown. With new cases being reported in North America and the disease still running its course in Asia, Condit said it's unknown how long SARS will discourage people from traveling. Despite all the uncertainty, Condit said he's sticking to his prediction the company will build 280 airliners this year, but Moody's Investors Services has downgraded Boeing's credit quality from stable to negative with fears some of those orders will be canceled or delayed.