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30.04.2009 Cessna sinks Columbus, closes Bend facility

Cessna today suspended development of its flagship super midsize business jet, the Citation Columbus, a platform that was to launch the airframer into a new and more lucrative sector of the market.

“This was a very difficult decision, but critical to sizing our business to the realities of today’s market,” said Cessna president Jack Pelton. “We still feel this is a program with great potential and one we will pursue when the market recovers.” The company will return $50 million in customer deposits.

Pelton’s statement, released in a letter to Cessna employees this morning, comes on the heels of yesterday’s dismal first quarter earnings report by its parent company, Textron. The company posted continued losses in revenue, which for Cessna was accentuated by “continued decline in global demand for Cessna aircraft,” according to Pelton.
To size the company for decreased production to match reduced demand through 2010, Cessna has begun issuing layoffs to 1,600 employees “at every level” of the company and will lay off as many as 700 salaried employees by mid-June. In addition, there will be a company-wide furlough of four weeks this summer, an extension of a previously announced outage designed to match production to demand.

Work on the new CJ4 light jet and the light sport SkyCatcher will continue in Kansas, says Pelton, but Cessna will shutter the Corvalis single-engine piston aircraft facility in Bend, Oregon, formerly the home of Columbia Aircraft, and move the line to Cessna’s Independence, Kansas, location.

Demand for the company’s Mustang very-light jet remains promising, marked by the expected delivery Monday of the 200th aircraft to a new owner in Hawaii.

The company will keep many of its engineers occupied with what Pelton called the development of “numerous yet-to-be announced new products.”

“There doesn’t seem to be a lot of good news for Cessna right now,” Pelton admitted in the letter, “but times will change.”