Textron Tightens Belt: Cessna Delays Columbus, Plans Furloughs
Cessna has announced it will delay development of its Citation Columbus -- the jet CEO Jack Pelton in October said "will create a billion dollars of revenue annually" -- and that more furloughs are coming. The company is investing $780 million in development of the 488-kt. luxury business jet, that can carry eight people 4,000 nautical miles, but is slowing construction of what will be the Columbus' production facility. That should delay the jet's production by at least six months. The furloughs, however, are not expected to be tied to the Columbus program, but will be targeted at Citation CJ, Sovereign and Citation X production personnel; and cutbacks extend up the ladder to Cessna's parent company. Textron's CEO, Lewis B. Campbell, saw a 16 percent decrease in total compensation, down to $9.8 million in 2008 from $11.8 million in 2007, according to a filing with the U.S. Securities and Exchange Commission, Thursday. A full $1.6 million of that was due to a cut in his performance bonus. But beyond Cessna and Textron, changes in production schedules at Cessna will affect other companies, too.
The move to slow down the progress the Citation Columbus impacts contractors like Spirit AeroSystems. The contractor will now shadow Cessna by delaying construction of its own Columbus oriented facility. Fortunately, the project's delay will not bring dramatic change to Spirit as much of its workforce can be reallocated to other projects.