August 28, 2009
Aircraft orders double in July
The value of new commercial and general aircraft orders more than doubled in July, to $9.3 billion, from June, according to the U.S. Census Bureau. However, the amount of orders for nondefense aircraft in 2009 remains 66 percent below the first seven months of last year. Shipments of commercial and general aircraft in July were up 5.9 percent over June, but were down 8.7 percent through 2009 compared to the first seven months of 2008. The backlog rose 0.5 percent in July, but 2009 was 7.1 percent below 2008. The inventory rose 1.1 percent, and was up 22.6 percent year-to-date.
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August 28, 2009
Hawker Beechcraft cuts 300 more jobs
Hawker Beechcraft executives have eliminated hundreds of jobs, released three vice presidents, adjusted employee benefits, and reduced the salary of CEO Bill Boisture Jr., from $630,000 to $567,000 effective Sept. 7. The moves, including some cutbacks in employee benefits, are part of an additional effort to cut costs in the face of a continued deep recession. The company did not release details of the latest layoffs, but Wichita Eagle reporter Dan Voorhis discovered that documents filed by the company with the state of Kansas show 300 new layoffs. The company is suspending company contributions to employee 401(k) plans and has raised employee contributions to health care premiums for nonunion employees.
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August 25, 2009
Cessna Readies For Piston-Production Cuts
Cessna Aircraft has announced plans for another round of production cuts at its Independence, Kan., and Columbus, Ga., plants, which focus on single-engine piston production.
A letter from Jim Walters, Cessna's senior vice president for human resources, says that the market remains soft. "While we continue to see signs of stabilization in the overall economy, we are not ready yet to say we've hit the bottom of this downturn," stated Walters.
During its recent earnings call, Cessna parent Textron announced the reduction of jet production for 2009. Walters stated "It is now apparent that we need to reduce the single-engine piston production schedule for 2009. This work force adjustment, along with the planned reduction already announced in my June 12 memo, will still not exceed 500 employees."
Walters acknowledged suggestions from employees on how to handle another three weeks of furloughs scheduled through the end of 2009. "Since many of you naturally looked to the short weeks of Thanksgiving and Christmas to take required furlough time, it makes sense to close the facility for both these weeks, which we can do without compromising our delivery commitments to customers," he remarked.
Cessna also will begin tracking furlough time by hours instead of weeks, giving employees more flexibility. "Every employee who is required to take seven weeks of furlough can now count 280 hours, instead of weeks or days," Walters explained.
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August 14, 2009
Hawker: Job cuts will be significant
Hawker Beechcraft's top executive told Wall Street analysts Thursday that upcoming job cuts announced this week by the company will be significant.
Since October, Hawker Beechcraft has cut its employment by 2,800, or 25 percent of its work force. The company is not yet saying how many people will be laid off in the upcoming round. But "the market conditions remain very challenging," Hawker Beechcraft chairman and CEO Bill Boisture said in a conference call with analysts. He called it the "toughest downturn the industry has seen in many years." The company expects depressed demand and a declining backlog of orders for this year and likely into 2010, officials said. In response, Hawker Beechcraft is managing the business accordingly, focusing its liquidity position, taking steps to conserve cash and cutting costs, Boisture said. The company delivered 78 business and general aviation aircraft in the second quarter, compared to 129 units a year ago.
During April, May and June, the company took orders for 58 airplanes valued at roughly $450 million. That included orders for 30 King Air turboprops. At the same time, it had cancellations totaling $366 million. Since the beginning of the year, fractional ownership company NetJets has canceled orders for 12 aircraft and deferred deliveries of all aircraft scheduled for delivery in 2009 or 2010 until after the end of next year. Hawker Beechcraft's backlog totaled $6.8 billion on June 28, compared to $7.3 billion at the end of March.
The company also took an $18.8 million charge on its Hawker 4000 program, citing lower-than expected selling prices on planes to be delivered before the aircraft reaches break-even profitability levels. Hawker Beechcraft is producing the plane while incorporating late changes in its design filtered into the production line, Boisture said. "There's always a learning curve involved in that," he said. In addition, some customers have been unable to obtain financing or changed their outlook about their business environment.
Both have affected the cadence of the plane's production and delivery, Boisture said.
Hawker Beechcraft said last week that sales in the second quarter totaled $816.3 million, compared to $1.03 billion a year ago. Net income in the quarter totaled $172.2 million, compared to $24.9 million from the previous year.
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August 5, 2009
Hawker Beechcraft reporting profits
Hawker Beechcraft sales were down but profits were up in the second quarter. The airplane maker said net sales for the quarter ending June 28 dropped $212.4 million to $816.3 million from the second quarter of 2008. But its net after-tax income was higher compared with last year's. Hawker Beechcraft said in a release that a net gain of $175 million on the repurchase of its debt securities pushed after-tax net income to $172.2 million compared with after-tax net income of $24.9 million a year ago. Hawker said its sales were lower because of "adverse market conditions" that led to fewer sales. It delivered 24 business jets and 41 turboprop and 13 piston airplanes in the quarter. Fewer deliveries and charges taken because of layoffs and its exit from a leased facility also led to lower operating income of $39.4 million. Its operating income was $47 million less than in second quarter of 2008. Since November, Hawker Beechcraft has announced more than 2,700 layoffs. The company said its order backlog at the end of the quarter was $6.8 billion, down from $7.4 billion in the same period a year ago.
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February 4, 2009
Hawker Beechcraft lays off 2,300
Hawker Beechcraft Chairman and CEO Jim Schuster has notified employees that the company will reduce its workforce by 2,300 employees before the end of 2009. The action follows similar layoff announcements throughout the aircraft manufacturing industry.
The move by Hawker Beechcraft is one of many cuts being experienced throughout the worldwide aviation industry. The United States dominates the world market with more than half of all US production going overseas providing $150 billion annually to the US economy.
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