The Wichita, Kan.-based manufacturer of business and general aviation aircraft says a weakness in new orders is forcing the additional job cuts and an unspecified reduction in production rates. The new layoffs will push Cessna’s workforce below 8,000, less than half the level it was when the global economic downturn intensified two years ago. “While we are seeing solid performance in most of our other business, we have not yet seen a discernible improvement in business jet order activity,” Scott Donnelly, president and CEO of Cessna parent Textron, said in a statement.
The company’s announcement comes just three days after Cessna’s union employees rejected a call to strike. An International Association of Machinists and Aerosapce Workers union negotiating panel had urged the strike, saying a seven-year labor contract offered by the company did not provide enough job security and reduced health care benefits. But in a Sept. 18 vote, just 49% of the union members voted to strike, well short of the two-thirds required. As a result, the company’s contract proposal went into effect by default.
Cessna CEO Jack Pelton, in a letter to employees, said the company has “little choice” but to reduce costs to remain competitive. “The gains made in the first half of the year in the global economy have stalled, and Cessna’s performance continues to mirror the lackluster economy,” Pelton laments. “While cancellations have slowed, the recovery and growth we expected to see throughout the year have not materialized, and the timing of any recovery remains uncertain.”