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,
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
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
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.