Textron Aviation starts laying off 750 employees, 575 in Kansas

04/23/2014 8:25 AM

04/23/2014 11:02 PM

The number of job cuts announced at Cessna Aircraft and Beechcraft on Wednesday were in line with or lower than experts’ expectations.

About 750 full-time and contract employees at Cessna Aircraft and Beechcraft – including about 575 in Kansas – received 60-day layoff notices on Wednesday, Textron Aviation said.

Layoffs are taking place in all areas of Beechcraft and Cessna businesses and are affecting both salaried and hourly employees and management and non-management positions, the company said. It did not provide more details.

Cessna employs about 5,400 while Beechcraft employs about 3,500.

In March, Textron, Cessna’s parent company, closed the deal to buy Beechcraft Corp. and form Textron Aviation, combining the two historic airplane companies under one business. Company officials have said the consolidation would bring job reductions as they integrate support functions.

The number of layoffs announced Wednesday is reasonable when two healthy companies with a proper level of staffing combine, said Teal Group aviation analyst Richard Aboulafia.

But both already had cut deeply before that, Aboulafia said. Now they’re cutting bone marrow, not fat.

“They cut some important positions,” he said. “They’ve lost an awful lot of talent.”

That can be a problem down the road, he said.

“They cut some important positions,” Aboulafia said. “Unless they make a decision to retain more talent in advance of the recovery, they’re going to have a problem when the market picks up.”

Rolland Vincent, an aviation consultant at Rolland Vincent Consulting, said he had been expecting a 10 percent reduction in the combined staff, more in the neighborhood of 1,000 to 1,200 cuts.

But there have been some “slow leakages over the last few weeks and months,” Vincent said. “People have already been shuffled.”

That puts the total losses above 750, he said.

Vincent doesn’t think there will be additional layoffs because of consolidation.

“This is not what management likes to do,” Vincent said. “This is not fun. The sooner they get this behind them, the better.”

The market for light jets, however, must improve, he said.

“I’m a little worried,” Vincent said. “We need to see recovery in light jets. I’m not seeing a lot of evidence of that.”

Vincent said he would not be shocked should the company have reductions related to production.

“We’re going to watch that,” he said. “Nothing is imminent.

“The good news is the economy is bouncing back. That’s good for light jets.”

Throughout the past several weeks, leaders of the two companies have worked to combine the businesses. In March, Cessna and Beechcraft combined the new senior leadership team, which included three of 10 former senior Beechcraft executives. The other 14 senior leaders on the team were from Cessna.

Wednesday was the last day of work for most of the laid-off employees, several employees said. But they will be paid for the next two months.

“As a part of bringing together these businesses, we have identified redundancies in our global workforce that have ultimately led to some very difficult decisions that affect the sizing of our business,” said a letter to employees signed by Jim Walters, Textron Aviation senior vice president of human resources and communications.

“We have carefully considered each organization, understanding how each team operates and how each person fits into the organization, to ensure fairness and consistency with this process.”

The job cuts are not easy, the letter said.

“This is an extremely difficult, yet necessary, step in order to realign the combined businesses with a vision for strengthening the new Textron Aviation segment,” it said.

About 40 hourly workers at Beechcraft and a handful of hourly employees at Cessna received layoff notices, said Frank Molina, president and directing business representative of the Machinists union District 70.

The reductions to union-represented workers, Molina said, is higher than he expected, however.

“This is something I wasn’t anticipating at all,” Molina said. “We were hoping we would maintain our numbers.

“We’re still discussing the reductions.”

While cuts are taking place at Cessna and Beechcraft, Spirit AeroSystems is hiring. Whether the laid-off workers can find jobs at Spirit will depend on their skills.

Spirit is seeking to fill about 250 positions in Wichita. The positions are primarily for engineers and mechanics, a Spirit spokesman said.

More information can be found in the careers section at www.spiritaero.com.

Sen. Jerry Moran said the layoffs are painful to employees and their families. But the companies may be stronger in the long run, he said.

“We have to hope that these actions will put both companies in better positions to grow their operations in Kansas and create stable jobs in the future,” Moran said in a statement. “The quality of our workers, products and suppliers will keep global aviation manufacturers coming back to invest, build and create more opportunities for Kansas.”

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