Tough Times At Piper.....

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By: Flying-A - 14th February 2009 at 03:54

.....and Cessna and Beech, too.

Piper Aircraft lays off Vero Beach 300 workers, plans to close for 2 weeks

By EVE SAMPLES

Palm Beach (Florida) Post (via AOPA Briefs)

Tuesday, February 10, 2009

VERO BEACH — Eight months after the state promised Piper Aircraft Inc. $32 million to keep its headquarters in Vero Beach, the plane maker has laid off 300 workers and plans to halt production for two weeks this year.

Piper made the job cuts Tuesday, pointing to "a deepening global recession" that has eroded aircraft sales. No severance packages were offered to the employees, most of whom were production-line workers.

"We can't keep a full workforce on at this point when people aren't buying planes," company spokesman Mark Miller said.

The pink slips come on the heels of 150 layoffs that Piper announced last month. When those cuts were executed, most of the remaining workers were put on four-day workweeks.

In another move to slash costs, Piper will close its plant for a week in April and another in July, furloughing all workers, including executives.

Piper is suffering from a severe drop in demand as even the wealthy have reined in spending. The company projected last month that sales would fall about 40 percent this year. Miller said Tuesday that the drop could be even steeper.

"Even the willing buyers that we have find it incredibly difficult to get financing," Miller said.

Piper is not alone. Both plane manufacturers Cessna and Hawker Beechcraft Corp. announced thousands of layoffs in recent months. Orders are down across the industry.

"The business jet market and the general aviation market is really being battered by the economy and the mess in the financial markets," said Raymond Jaworowski, senior aerospace analyst at Forecast International Inc. in Newtown, Conn.

Business aircraft sales tend to go up when corporate profits rise and down when corporate profits fall, he said.

After Tuesday's round of layoffs, Piper has about 650 workers remaining. Executives warned that more cuts could come if the market gets worse.

The picture at Piper is now quite different from what it was in May last year, when Gov. Charlie Crist and about 1,000 Piper workers gathered to celebrate the company's decision to stay in Vero Beach. The state and Indian River County wooed Piper with a $32 million incentive package.

Piper accepted the first installment of the cash in May - $4 million from the county and $6.7 million from the state - but the slumping economy prompted it to postpone taking the second round in December.

In exchange for the money, Piper must meet targets in job creation, spending and sales. It can delay the deadlines if certain unforeseen circumstances arise, Indian River County Commissioner Peter O'Bryan said.

"We were kind of thinking like hurricanes and such, but certainly a global meltdown is beyond Piper's control," O'Bryan said.

In order to get the second $10.7 million payment from the state and the county, Piper would have to employ 1,166 full-time workers - a target that it is unlikely to meet anytime soon in light of the recent job cuts.

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By: Flying-A - 25th February 2009 at 02:46 - Edited 1st January 1970 at 01:00

And the news gets worse:


The GA Heartbreak Continues: Temporary Piper Shutdowns Extended

AeroNews Network (via AOPA)

Mon, 23 Feb '09

Piper to Close Plant for an Extra Two Weeks

Talk about a gut check... an industry that has reinvented itself over the last decade, having improved itself with new technologies, methodologies and tremendous progress, continues to be victimized by an economy that has no sense of direction, unless that direction is "down."

A brief, painful, missive from the folks at Piper tells ANN that:

"The most recent GAMA (General Aviation Manufacturers Association) report on aircraft deliveries indicates the worldwide general aviation market has continued to deteriorate. The decline is being driven by overall weakness in the economy, the inability of customers to obtain financing, and the increase of both new and used aircraft inventory. As a result, and to ensure our continued viability, Piper Aircraft has decided to shut down operations for one week in May and another week in June, in addition to the previously announced closings of one week in April and one week in July. These shutdowns will be without pay and will affect all employees in the Company, from Executive Management to Hourly manufacturing employees.

"We realize and regret the impact that this has on our employees and are doing everything possible to preserve the 650 jobs Piper continues to provide. Piper is focused on taking all necessary actions to weather the current downturn in such a way that we will be positioned for growth when the economy improves.

"These actions will help support the company's ongoing operations by facilitating a reduction of raw material and finished goods inventory, focusing on expense control and providing the company an opportunity to determine how President Obama's new stimulus package will impact the market. While we are pleased that the President's stimulus package contains a provision for bonus depreciation and feel that will help facilitate a market recovery, we are, however, still deeply concerned about high inventory levels of new and used aircraft, lack of available credit and the overall continued decline in consumer confidence.

"Although no one can predict how long this recession will last or how deep it will go, we believe that Piper's focus should be on preserving as many jobs as possible while continuing to dedicate ourselves to building aircraft of the finest quality and the most exacting safety standards of any within General Aviation."

ANN E-I-C Note: Folks; this is heartbreaking stuff... the industry is, ultimately, a small one and the decisions we've seen in the last few weeks are nothing less than what these companies must do to survive until better times. Still, as we can personally attest to having heard it in their voices, or seen it on their faces, the decision-makers of the GA world are taking great pains to do what they must... and hating the result. We can only hope that the current economic maelstrom finds its way to some sense of solution as soon as is possible... as one of the finest industries in this nation deserves much better than it's getting. -- Jim Campbell, ANN E-I-C.

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By: J Boyle - 25th February 2009 at 16:35 - Edited 1st January 1970 at 01:00

I understand Mooney has already shut its production line.
If the economy is as bad as everyone seems to say...and if credit is hard to get...then this is to be expected.
Especially since a llot of GA buyers are small business or entrepreneurial types.

But I've got to believe that the cost of GA aircraft is getting a bit silly...
$150,000 for some of the imported LSA types, $300-400,000 for a Mooney, Lord knows how much for a Bonanza or new Baron.

The cost of used planes don't seem to be taking a hit from what I've seen in Trade-A-Plane...people still want silly money for a lot of planes.
Despite what we hear, it's far from 1929.

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By: topspeed - 26th February 2009 at 07:12 - Edited 1st January 1970 at 01:00

Isn't same kinda things taking place in car industry ?

I saw a document of 95 years old GM plant in Janesville Michigan. People are bying the Hummers no more and no need for production.

I wonder whats keeping those plants and companies of making real SPACE AGE vehicles that move practically with fumes and costs normal to build. I mean the world record of going furthest with a liter of gas is 4050 km ( approximately MPG 10000 ) by a japanese team.

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By: J Boyle - 11th March 2009 at 22:10 - Edited 1st January 1970 at 01:00

I wonder whats keeping those plants and companies of making real SPACE AGE vehicles that move practically with fumes and costs normal to build. I mean the world record of going furthest with a liter of gas is 4050 km ( approximately MPG 10000 ) by a japanese team.

How practical is that vehicle?
Can it pass safety standards?

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By: topspeed - 12th March 2009 at 13:45 - Edited 1st January 1970 at 01:00

Boyle,

Of course not, but that is not the point...with a Hummer you can go hardly 20 mpg. In fact you get 16 mpg ( http://www.fueleconomy.gov/Feg/noframes/22514.shtml ).

This is certainly not same reason as why the Piper has problems. It is the recession. But fact is that fuel economy has to get a lot better soon in order to cut down emissions and greenhouse gasses.

My " papertiger " ac in my blog gets mileage of 490 after 16 months of study ( not yet verifid by aeroengineers ).

Juke