Cessna has announced that it will cut an additional 2,000 jobs:
Cessna Aircraft Co. is planning to cut an additional 2,000 jobs in the coming months, according to a letter sent out to employees by Chairman and CEO Jack Pelton on Thursday.
Combined with the previously announced reductions of 2,600 employees, Cessna will now be laying off at least 4,600 in 2009.
Of the cuts, 4,000 will come from Wichita, including the 500 layoffs announced in November and the 2,000 earlier this month, says Cessna Spokesman Doug Oliver. The company will also be letting go 200 people from its facility in Independence, Kan.
The newest round of layoffs come amid Textron Inc. (NYSE: TXT), parent company of Cessna, releasing its fourth-quarter and full-year financial report.
“These numbers are profound, especially when you look beyond the numbers to the Cessna families that are affected. It’s extremely painful for all of us to lose so many of our colleagues and friends,†Pelton writes. “Making this decision is difficult for your leadership team and me personally. These actions are necessary to secure our future.â€
Cessna’s fourth-quarter revenue decreased $64 million from 2007 and segment profit was down $90 million.
That’s just the latest example of a company that’s continuing to make money and continuing to pay dividends cutting jobs. IMO it’s reducing the company’s ability to function in the name of short-term cash payouts.
Just one more example of the rich getting richer while the poor
become poorer…is this not just one more example of failing American capitalist system?
Question, as more and more jobs disappear, what percentage
of these lost jobs will return if there is a turn around on the economic front, and what might that economic world look like?
While the jobs disappear and more American’s find themselves out of work, will this experience force American’s to reevaluate their current beliefs in the American experience?
Will this failure of the economic system stay with us and become part of our mass character, identity as it did for those who lived through the depression of the early 1900’s?
I agree to a point. I own some Textron stock and I’m uninterested in a short term boost in the stock price.
But, I wouldn’t be surprised if their internal forecasts don’t look great for orders in the medium term.
Then the company should be cutting the dividend and jobs. A company is its people. When you eliminate jobs (especially by free-for-all buyouts or other similar schemes), you’re liquidating the company.
When a company is losing money it’s got to go into survival mode. I understand that. Stakeholders and shareholders should both feel the pain. That’s why I was relatively easy on Kodak in my post yesterday.
But people aren’t commodities. You don’t just put them on the shelf for when you need them. It doesn’t work that way.
Dave, what if staying pat would result in MORE people having to be laid off because the balance sheets are so bad (and worse then they would have been had forecasts been followed.)
Besides, Textron posted a 4Q loss…not just diminished profits. Yes, they were profitable for the year as a whole, but it seems wildly optimistic (if not a little crazy) to think they will turn a profit next year.
From the AP Story:
“Cessna delivered 131 jets in the fourth quarter and 467 in 2008 — setting records for both periods — but the company had 23 cancellations and an unprecedented number of deferrals in the fourth quarter, Campbell said in a conference call with analysts.
Those developments will hurt planned deliveries in 2009, which are forecast at 375 planes, he said.
Scott C. Donnelly, the company’s president and chief operating officer, said Textron planned to lower general expenses by 10 percent, research and development costs by 80 percent and capital spending by 42 percent.
For the fourth quarter, Textron posted a loss of $209 million, or 87 cents per share, down from a profit of $256 million, or $1 per share, a year earlier.”
So they expect deliveries to drop 20% this year, and the difference in their 4Q performance was $465 million dollars off what they did last year.
I agree, the dividend should be slashed or suspended…but if they DIDN’T take steps to deal with the current reality of the capacity they need for 2009 that would be gross neglect. After all, it is to everyones benefits, including the poor souls getting laid off, for there to still be a Cessna/Textron on the other side of this recession.