Lays Off 80 Workers, Cuts Production Rates

Blame the following on the slumping economy... and it may be a sign of things to come. Mooney Airplane Company announced Tuesday morning it has slowed production rates for its aircraft for the rest of 2008, and laid off a sizable percentage of its workforce.

"In light of our current order levels, we have decided to slow our production rate from 8 aircraft to 5 per month for the remainder of 2008," Mooney CEO Dennis Ferguson. "While this action will allow us to better control inventory and reduce production costs, it will have an impact on our work force.  Effective Tuesday, June 17, we will reduce our employment by approximately 80 people.

"In order to assist the affected employees we will provide a severance package and career transition support," Ferguson added.

Mooney cites industry statistics released earlier this year by the General Aviation Manufacturers Association (GAMA), noting piston engine aircraft deliveries are down 28% for the first quarter of 2008, compared to the same period in 2007. That doesn't bode well for a number of general aviation planemakers... but hits niche-manufacturers like Mooney especially hard, as its entire product line is piston-powered.

In response to current US market conditions, Mooney has implemented numerous measures to improve efficiencies and reduce cost, including the adoption of LEAN manufacturing initiatives. Ferguson says the company is also focusing its efforts in overseas markets, that are experiencing growth.

"These decisions will not have an adverse effect on the quality or safety of our products nor will they delay scheduled aircraft deliveries. They were made to create corporate resiliency in the present economic conditions. Our plans include positioning Mooney as a strong contender in the international market," Ferguson stated. "We are strengthening our business in Europe, South America and Australia, where Mooney's high performance, efficiency and pricing are especially appealing. Our focus is to ensure the long-term viability of the company through prudent management and expansion of our market reach."

As ANN reported, Mooney recently received certification for the Model M20TN Acclaim and the Acclaim Type S from the ANAC, the Brazilian aviation certification authority. Other recent international certifications for the Acclaim include Civil Aviation Safety Authority (CASA) in Australia.

"The Mooney name has earned its place in the distinguished company of aviation legends," Ferguson concluded. "Since 1946 the story of Mooney has been one of constant innovation, industry leadership and the passion for flight. Our commitment is to continue the Mooney story."

FMI: www.mooney.com