Cirrus cuts 52 employees
DULUTH - Cirrus Design Corp. recently completed another round of reductions, trimming 52 people from its payroll, mostly in Duluth. Unlike previous cuts, the latest downsizing spared production workers, claiming mainly higher-paid staff instead.
The airplane maker now employs about 600 people in Duluth, 150 in Grand Forks and 30 more in other locations around the globe. In the past six months, the company has eliminated about 300 positions and has placed another 100 workers on a continuing furlough of indefinite duration in the face of a faltering economy and diminished sales of airplanes.
Cirrus' annual airplane production declined nearly 23 percent from 2007 to 2008, according to the General Aviation Manufacturers Association.
The most recent cuts affected several departments, including people working in engineering, quality assurance, testing, administration and as support staff.
Cirrus has no immediate plans for further downsizing, according to Ian Bentley, vice president and managing director of international sales.
"We believe we have a plan in place that will take us forward through the next few months," he said. But he also noted that Cirrus will need to assess its needs and adjust to market conditions on an ongoing basis.
Todd Simmons, Cirrus' vice president of marketing, said several recent advancements in the company's product line -- including cockpit instrumentation enhancements and the introduction of an anti-icing system capable of flying into known-ice conditions -- have solidified the company's position in the piston-engine market. As a result, he said Cirrus now finds itself able to refocus its engineering efforts, dedicating more attention to the development of a personal jet.
"By no means are we turning away from piston redevelopment, but the bulk of our resources will be going over to the jet," Simmons said.
Whereas Cirrus formerly maintained separate and similarly sized engineering teams dedicated to piston and jet aircraft, the engineering department will now operate as a single unified department with the flexibility to tackle a variety of tasks, according to Bentley. He believes this structure will improve efficiency, and helped make it possible to reduce staffing levels.
Bentley estimated that in the near term about 80 percent of the company's engineering resources will be dedicated to developing the jet, and 20 percent will remain tied primarily to the piston-engine aircraft.
Cirrus aims to have its new jet certified and ready for production by 2011. The Cirrus Vision SJ50 is expected to sell for about $1 million, and the company already has received more than 400 orders for the aircraft, with each jet reservation accompanied by a $100,000 deposit.
Although Cirrus' sales and employment numbers have taken a hit, Bentley reported the company remains financially sound, thanks to some of the proactive actions it has taken.
"Our balance sheet is significantly stronger than it was six months ago," he said.