Cessna Subcontract Under Fire

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Machinists Union Questions Canadian Contract ...

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The machinists union representing Cessna's workers wants to know if work that Cessna Aircraft Co. gave to a Canadian company violates its labor contract. Cessna awarded a contract Sept. 10 to Avcorp Industries of Vancouver, B.C., to design, test, produce and support the center wing box, vertical stabilizer and rudder of the new CJ3 business jet, which Cessna expects to begin delivering in the third quarter of 2004. The International Association of Machinists and Aerospace Workers is concerned about the Wichita manufacturer's subcontracting of work, particularly in light of recent layoffs at Cessna.

Union officials are formally requesting information from Cessna about its subcontracts. They state the contract (with the union) says that before anyone is laid off, the company will meet to discuss any outsourced or subcontracted work to determine if that work was previously done in the company's plant. The union states that if it's determined that it had been done in the company's plant, it's supposed to be returned.

... But Cessna Debates The Issue

Cessna said there's no violation of the contract. Cessna does make center wing boxes, vertical stabilizers and rudders for its existing aircraft in its Wichita plant, spokesman Marilyn Richwine said, but the company is looking particularly hard at its costs these days. "It takes a considerable amount of capital to produce these [products]," Richwine said. "So we're always looking at what it costs us for space, and what the costs are for tooling and facilities."

Avcorp's contract is worth more than $100 million over 10 years. The first of four test units of the components have already been delivered to Cessna. Avcorp also signed a contract with Cessna in November 2001 to supply components for the wing of Cessna's Sovereign aircraft. The Sovereign is also under development. Avcorp has said it hopes the two Cessna contracts lead to more contracts in the future.