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Sun, Feb 08, 2009

Cirrus Says Production Cutbacks Imminent

Production Days To Be Scheduled To Meet Weekly Demand

Cirrus Design Corporation last week advised employees of the Minnesota-based planemaker that due to continuing slow sales to expect production reductions -- by scheduling fewer production days -- to keep pace with lower production demand.

"We will need to tune our production rate down to the level of demand," Ian Bentley, Cirrus' vice president of products and services, told the Duluth News-Tribune. But we expect this to be a relatively short-term thing. We already see signs that our order pipeline is starting to fill. It's just filling up slower than we had hoped."

Bentley said there has been an uptick in marketing response, an encouraging sign in view of sagging sales numbers, increased by the company's recent introduction of new features and options to its product line.

A new marketing initiative - called Flying 2.0 - is also credited with boosting interest, Bentley said. Reaching out to businesses and individuals alike, the sales campaign promotes the benefits of private versus commercial aviation and encourages aircraft ownership.

To minimize the economic impact on its employees already laid off, Cirrus is taking steps typically unheard of in a furlough situation. Medical and other key benefits will continue to be paid by Cirrus for its affected employees. Additionally, Cirrus is coordinating with state government offices regarding available programs to supplement traditional compensation benefits for its employees.

Cirrus' vice president of business administration Bill King reaffirmed the company had no plans to reduce the numbers of employees. "We can't afford to lose our talent pool," he said. "That's why we need to respond in a very thoughtful way, so we don't lose people who are part of our core team."

"We're really down to the point where anything we do would mean carving into muscle, not just a little bit but a lot," King said. "We need to be careful and avoid any further staffing cuts to the extent that we can. The reality is that our success will be measured by whether we are able to produce airplanes profitably at smaller volumes."



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