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Cessna To Close Georgia Plant, Move Sub Assembly Work To Mexico

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Tuesday, December 8, 2009

Cessna today announced plans to close its production plant in Columbus, Georgia, and to move some sub-assembly work from Wichita to Mexico.

Cessna spokesperson Doug Oliver said the changes will affect 175 people performing sub-assembly work in Wichita. Oliver said the planned growth of the CJ4 production line will provide job opportunities for those workers.

The Georgia plant employs 300 people. In an e-mail to Cessna employees, Chairman & CEO Jack Pelton said Cessna will transition work from Columbus to Independence, Kansas and Mexico over the next 24 months.

In the statement Pelton said, "this move will allow us to continue to consolidate our Wichita facilities and reduce our existing cost structure."

Pelton added "these actions are necessary to ensure we maintain the financial health of our company and continue to be challenged by emerging global competitors."

*Text of message from Jack Pelton;

Fellow Cessnans,

Over the past few months, the general economy has exhibited some positive trends: there have been gains in the stock market, the housing market is beginning to stabilize and many economic analysts are forecasting that the economy should begin a slow recovery in 2010.

While we are encouraged by these signs, we have yet to see these trends reflected in the general aviation market, which historically lags the economy by 18 to 24 months.

To adjust to these business realities, Cessna has placed a strong focus on reducing costs, managing inventory and aligning our manufacturing facilities to meet our lower schedule projections. We have already taken several steps to reduce our capacity including closing facilities in Bend and Toledo and consolidating facilities in Columbus and in Wichita.

Although these moves have been significant, additional changes are still necessary to properly align our manufacturing capacity and costs to meet the lower demand.

To this end, we will begin to transition work from Georgia to Cessna locations in Independence and Mexico over the next 24 months, and we will then close the Columbus facility. We will be discussing the impact and options with our Columbus employees directly.

Further supporting the consolidation of Cessna facilities, we will accelerate the transition of certain sub-assembly work from Wichita to Cessna facilities in Mexico. This move will allow us to continue to consolidate our Wichita facilities and reduce our existing cost structure. This transition will also occur over the next 24 months, and we anticipate that the current production schedule along with planned CJ4 growth may provide job opportunities for some individuals whose roles are transitioning.

These actions are necessary to ensure we maintain the financial health of our company and to plan for a future in which we will continue to be challenged by emerging global competitors. We face sizeable challenges, but thanks to your resolve, Cessna will emerge in a strong position ready to face the competition.

This type of news is always difficult to bring, especially during the holiday season, but I remain committed to keeping you apprised of changes impacting our coworkers and our business.

Jack


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