Sales Remain Strong... But Cert Delays, Hail Take Their Toll

Leaner times in Bend, OR... as Columbia Aircraft Manufacturing Corporation told ANN Thursday the planemaker has been forced to lay off 59 employees, out of the company's total workforce of 605, in order to offset the financial impact of what the company termed "a cascade of unanticipated events."

Columbia officials point out that in 2006, sales and deliveries of Columbia aircraft reached unprecedented levels -- and that sales for both aircraft types continue to be healthy. However, a six-month certification delay for the Garmin G1000 glass panel installation, along with a June hailstorm that necessitated the refinishing of more than 60 aircraft, has hampered the planemaker's ability to operate profitably.

"We actually increased our staffing level in the last 18 months in an effort to not only maintain our production of new aircraft at a level that matches our order rate, but also to refinish the aircraft harmed in the hail storm," Columbia President and CEO Bing Lantis told ANN. "At one point last year, we were above 700 employees. As this additional work has been completed, we’ve gradually reduced our workforce naturally through attrition. Unfortunately, we now need to make more sizable adjustments to our workforce to balance it with our production needs."

Columbia representatives tell ANN the chain of events leading to the layoffs began in October 2005, when the company announced its intent to certify the integrated Garmin G1000 avionics suite. The new panel was met with great interest, and several orders -- but a six-month certification delay kept those planes from getting into customers' hands. To make matters worse, in June 2006 a freak hailstorm damaged the aircraft on the ramp awaiting certification.

Although the company was able to maintain its workforce and production rate during those two events, Columbia says it was unable to deliver the volume of aircraft required to sustain its expanding workforce. In November, Columbia attempted to offset some of the fallout by cutting hours for approximately 400 workers -- but it soon became clear more drastic measures would be needed.

Lantis stated Columbia does not expect to make additional staff cuts, but that more layoffs may be necessary as the Company continues to refine its production efficiency and implement its Lean Manufacturing practices.

Columbia stresses the company continues to build and deliver aircraft, and maintains a 90 day backlog of orders.

FMI: www.flycolumbia.com