Cessna Closes Oregon Factory; Suspends Large-Jet Program

In response to lagging sales, Cessna will move production of its Corvalis line of single-engine aircraft (formerly Columbia) to its Independence, Kansas, factory and close the original production facility in Bend, Oregon. Poor economic conditions are also blamed for Cessna suspending development of its Columbus business jet, the largest jet Cessna has ever designed. Company officials said the Columbus program could restart once the economy picks up. Cessna announced 1,600 layoffs, with 700 more jobs to be lost in mid-June. That would be a total of 6,900 employees cut from the payroll since the start of the economic slowdown last year. Of the 525 deliveries expected this year, only 295 are now expected to actually occur. Up to 130 of those are Mustang light jets. There have been 92 cancellations of airplane orders so far this year. Cessna expects to deliver 500 piston singles this year. With 69 jet deliveries through the first quarter compared to 95 for Q1 last year, Cessna's revenues are down some $477 million. With all that bad news, Cessna is still considered one of parent company Textron's strongest assets. With its financial segments seriously weakened, Textron has been the subject of numerous takeover rumors in the past few months.