Cessna Will Suspend Columbus Program, Close Bend Factory
In response to a dismal first-quarter earnings report, Cessna's parent company Textron said on Wednesday the Citation Columbus program will be put on hold. Also, the former Columbia factory in Bend, Ore., where the Cessna Corvalis models are built, will be closed, and those airplanes will be built in Kansas instead. The company will lay off 1,600 workers, including all 150 staffers in Bend, plus up to 700 workers in the Columbus program, and will shut down for four weeks this summer. Just last October, Cessna CEO Jack Pelton had said the company would invest $780 million into development of the Columbus, its largest business jet ever, and add up to 1,000 new jobs. The 10-passenger, $27 million jet was expected to start deliveries in 2014. About $50 million in deposits will be returned. "Don't write the Columbus off your radar screen," Textron CEO Lewis Campbell said on a conference call on Wednesday. "Until we know much more about the market we're going to be selling into, we thought it was prudent to suspend it and redirect all of our efforts to reinvest into our core products in Bell and Cessna."
Textron said it expects to deliver only about 300 Cessna jets this year, about 20 percent less than its previous forecast. In 2008, the company delivered 476 jets. Things may still get worse: "We certainly haven't seen the bottom," company spokesman Bob Stangarone told the Associated Press. "The economy may be approaching bottom but our business typically lags the general economy by a significant amount." Cessna's revenues decreased $477 million in the first quarter from the same period last year, Textron reported on Wednesday, and in the first quarter of this year 92 orders were cancelled.