Company Says More Orders Cancelled

In a letter to employees posted publicly Thursday in "The Wichita Eagle," Cessna CEO Jack Pelton said more layoffs were inevitable, but did not say how many employees of the company would lose their jobs. Cessna Aircraft Company is the nation's largest manufacturer of corporate jets. Cessna has laid off 44 percent of its workforce since November of last year.

In the letter, Pelton said "The latest economic information indicates that while the recession may have reached a bottom in March, it will still be some time before we see the kind of growth in the economy that will assure us that our customers will take delivery of our products and order new planes in the coming years. Order cancellations have not stopped. The market for new aircraft remains frozen as customers wait to see if the recovery forecasted comes to fruition."

Pelton also noted declines in the aftermarket area of the business, saying "it appears that the average daily utilization continues to decline, taking it to significantly lower rates than we have seen in years. Even with a new commitment for lending support from America’s export bank, aircraft financing remains difficult for our customers. With this said the reality of the market for the next few years is forcing us again to revise our production outlook."

Cessna's parent company Textron said it expects the company to lose 150 orders in the quarter ending June 30th. The downturn has been blamed on the general state of the economy, and that Cessna has not yet "found the bottom" of this current cycle.

Cessna is not the only Wichita aircraft manufacturer to struggle in this economy. Both Hawker Beachcraft and Bombardier Learjet have reduced their workforces as the recession deepened.

FMI: www.cessna.com