Year Was Bad Enough for Industry; Then the 540 ADs Hit
We reported that Friday was the final day of work
for a number of New Piper employees. When we first reported the
story over the weekend, we didn't have too much to go on, other
than the few employee-generated reports we were able to confirm. We
had a talk with Mark Miller on Monday, though, and he confirmed
most of our story.
Not the usual reasons:
Miller told us, "The cuts were across the board, 150 people; but
unlike earlier downsizings (which were due to the slow industry
economy and the effects of September 11), this one is directly due
to the shortage of Textron Lycoming engines (540s) and the backlog
Deliveries hit hard:
"Our original projections for 2002 deliveries was 331," Miller
said. "When the year continued sluggish, we revised that to to 305,
about mid-year. We were on track with that number, and even
experienced some renewed interest in the Saratoga and Mirage; then
the bottom fell out, when the engine recalls hit."
The engine: it's a critical thing.
"Many of the
airplanes we had already built," Mark told us " -- the engines had
to be replaced. Our piston airplanes coming down the line needed
new engines." It was bad in Vero Beach; it hurt the dealers, to
some extent, even more: "This also made airplanes in our dealers'
hands, unsaleable," he explained.
It's rough on the showroom floor. Dealers have floor-planned
demonstrator machines, new aircraft, that they can't fly, as they
wait for the replacements from Textron Lycoming. [The six-cylinder
(540 inch) Lycomings were hit with a series of critical ADs, mostly
crankshaft-related, starting in late Summer. Airplanes with the
affected serial numbers -- esentially all the new-airplane stock --
can't fly, until the folks in Williamsport get the
repaired/rebuilt/replaced engines to them --ed.]
Miller continued, "Essentially, our dealers have been holding
their inventory; we've been talking to Textron Lycoming, to help
repair damage done to our name -- we're all [6-cylinder Cessna too
--ed.] in the same boat. Dealers have started to get replacement
engines; but the year was so bad -- our 305 (delivery forecast)
became 291." The number is down to 252 for 2003.
Who went home?
"It's office, as well as line workers; some
managerial, some engineering," Miller told us. "What's paramount is
to stay profitable, to stay strong, and to make sure we're not
cutting future product development. The cut was done on a 'relative
ranking' basis -- seniority isn't the only criterion."
"A sad day..."
"We've lost skilled, hard-working people," Miller said. "We'd
hire them back in a minute, if we could; we'd recommend them highly
to anyone else. We had to make these painful cuts, to remain strong
and viable. This is a sad day for us; but if we didn't take this
action, we'd have to cut into the bone of future product. We hope
the industry turns around soon."
It's not getting good enough, fast enough, for Piper. "There
have been some policies at Textron Lycoming, that we're not
entirely happy with, like some of the changes in their alternative
travel policy" the spokesman said. "We've been working hard as a
bridge between our dealers and Textron Lycoming -- our dealer body
has seriously contemplated filing suit -- and we're trying to make
up for some serious damage here."
Some 850 employees remain at New Piper's facilities, and no
additional cuts are anticipated.