More Cuts May Be Necessary If Economy Continues To
Piper Aircraft CEO Jim Bass
had a frank talk with officials in Indian River County on
Tuesday -- following the previous layoff of 150 workers,
and the potential need to thin its ranks further, if the
economy keeps on its unwinning ways.
Despite the gloom, however, Bass and other Piper officials
assert the news isn't entirely bad.
The Treasure Coast Palm reports Bass made his
comments Tuesday during a special county commission
meeting, called at the request of officials who wanted Piper to
address news of the layoffs,
which were first reported in December.
Bass followed up his confirmation of the layoffs with an
announcement the planemaker intends to pursue further installments
of a $32 million incentive package down the line... but is holding
off on asking for more money until the economy stabilizes.
As ANN reported, Piper received that financial
package in May 2008, in exchange for keeping the planemaker's
headquarters and production facilities in Vero Beach, FL. Under
terms of the deal, the company must meet certain criteria,
including maintaining employment levels and ultimately adding
workers in the future.
To date, Piper has received the first installment of that
money -- $4 million from the county, and $6.67 from the state.
The planemaker faces penalties if staffing falls under a minimum
level, though Piper is allowed to request an extension as long as
"We think that this is both good for Piper as well as Florida
and the county because ultimately it extends Piper's commitment,"
Bass said of the incentive package.
Bass conceded the first round of layoffs may only be the
beginning. "If it gets worse, we may have to have more layoffs, but
we hope we won't have to do that," he said. "We hope it will be
better, but we also recognize in today's environment ... it could
Piper has cut back production levels on reduced demand for its
aircraft, in line with similar cutbacks throughout the GA
The company estimates a roughly 40 percent decline in
deliveries this year over 2008 levels. "There simply is no need to
build planes and have them stacked up on a runway to sit around and
rust," Bass (shown below) said.
So far, Piper hasn't reduced pay levels for workers or
management, except in cases of reduced work schedules. Bass noted
production workers received "two pay raises in 2008."
A spokesman for the company told ANN that even with the
current downturn, the community's investment in Piper has
already started paying off.
"Piper contributed more than $60 million to the Indian River
County community in payroll and purchase of goods and services,"
the spokesman noted. "The reality is that the incentives have
resulted in amazing results -- ROI on the county’s $4 million
and the state's $6.67 million is $60+ million.
"When you factor in the ripple effect, estimated at $500 million
by the Washington Economic Group, that is more than