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Wed, Nov 26, 2008

Cirrus Furloughs Workers Through End Of Year

Production 'Significantly Reduced' Ahead Of 2009

The tough times continue for workers at Cirrus Design... but there seems to be a light at the end of the tunnel. The Duluth, MN-based planemaker told employees Tuesday that total aircraft production for the month of December would be significantly reduced. As a result, a number of production-line employees will be subject to short-term furloughs at its Duluth, MN, and Grand Forks, ND facilities.

Cirrus added that all employees will return to work on January 5, 2009. While production capacity is at lower levels for the interim period, all other Cirrus departments -- including Domestic and International Sales, Customer Service, Product Assurance, Engineering and Development and the Vision Jet program continue unaffected.

To minimize the economic impact on its affected employees, 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 anticipates sales to swing upward during December, and expects to have adequate inventory to fulfill those orders. With the "production pause," Cirrus believes it can resume normal production rates in early January.

"We are working diligently -- and making good progress -- on rationalizing inventory levels, retooling the production line for greater product flexibility, and introducing new products -- such as the new SR20 with Perspective, new options and features to stimulate demand," said Cirrus President and Chief Operating Officer Brent Wouters. "Even so, we must make the sometimes difficult tactical decisions to match our overall production to the realities of the current market place."

Chairman and Chief Executive Officer Alan Klapmeier added, "Cirrus is fortunate to be well-positioned competitively and we see great opportunity as we look further ahead. Our focused commitment to the Vision Jet program, ongoing innovation in our piston products, and our flexible lean-manufacturing capabilities are just a few reasons for our optimistic view."

Klapmeier also noted the company continues to receive "strong financial and operational support" from its primary invester, Bahrain-based Arcapita Bank. "With our strong balance sheet footing and sound financial performance, Arcapita remains very supportive of Cirrus overall and of course to seeing its jet program through to a very successful completion despite the current economic challenges," Klapmeier said.

Tuesday's announcement is the third time in as many months that Cirrus has pared down its workforce. Last month, Cirrus handed out pink slips to 105 workers; in September, Cirrus laid off 100 employees.

FMI: www.cirrusdesign.com

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