Cirrus seeks more workers in Duluth to catch up with demand
The market for its airplanes has grown through the pandemic, but the company's ability to hire more people has been hindered by housing.
DULUTH — You could say Cirrus Aircraft faces an enviable problem.
The Duluth-based company can’t quite keep pace with demand for the airplanes it produces — both its piston-engine SR models and its signature high-end personal jet, the Vision SF50.
Cirrus CEO Zean Nielsen said the company has nearly doubled its production of aircraft in the past three years, yet long lead times persist.
“So, from a demand perspective, the last two years we’ve actually been outselling our production capacity by quite a margin, which is good. So, the backlog is really healthy. It’s actually at a record level right now for both the jet and the SR,” Nielsen said.
A Cirrus customer looking to buy an aircraft today could reasonably expect to take delivery of an order for most models no sooner than late 2024.
Nielsen wants to shorten those lead times, but that’s no simple proposition, given labor and supply constraints.
In a tight local labor market, Nielsen said Cirrus has appreciably increased the wages and benefits it offers and has been actively advertising its employment opportunities both for experienced and entry-level positions. It also has been promoting the mobility its employees enjoy, with multiple avenues to advance in the company.
Nielsen believes Cirrus would be well-poised to recruit more people to take jobs in Duluth, he said, but "the biggest hurdle we have is helping them find housing.”
“If I could make a plea to policymakers and the city and others, it would be that they become a lot more aggressive with developing land and potentially offering tax incentives to developers and builders and companies that will come in and expand Duluth’s housing inventory, because there’s a mismatch between what manufacturing companies can pay, vis-a-vis what a very basic entry-level house costs in Duluth,” he said.
“If they want companies like ours to expand in Duluth, which we totally want to do — I mean our DNA is in Duluth — they have to help. And it should not always be the companies that are out knocking on the doors of the city and the policymakers to develop housing. My job is to run a profitable company and it’s to make it a great place to work. It shouldn’t necessarily be on the companies to figure out where our employees will live,” Nielsen said.
Nevertheless, Nielsen said he would be open to partnering with other large employers to do something together with the city or state to better meet the local need for affordable housing.
Developers have been taking notice, and there have been some encouraging signs of late, noted Adam Fulton, deputy director of the city’s planning and economic development division, as he discussed a recently proposed 194- to198-unit apartment building in the Duluth Heights neighborhood, as well as a project that is expected bring up to 130 units of housing to the Historic Old Central High School building.
“The recruitment piece is huge for our local employers,” he said, commenting on the need for additional housing. “We want to see more.”
Three years ago, Cirrus employed about 1,300 people. Today, that number is about 2,100, with more than 1,200 working in Duluth. And Nielsen said the company is looking to fill about another 400 positions this year. Cirrus also has a production facility in Grand Forks.
While Nielsen wouldn’t say exactly what that meant for production goals, he said it stands to reason Cirrus would expect to see corresponding growth in output.
As its production grows, Cirrus is looking to expand into the Duluth aircraft maintenance base formerly occupied by AAR. It also recently completed a 16,000-square-foot expansion of its paint shop.
Yet Nielsen said the company’s facility needs can be significantly moderated, if it can increase the size of its work force.
Cirrus’ production workers in Duluth put in four 10-hour shifts a week, but Nielsen said that with sufficient staff the company could add a full second shift, substantially boosting its output without radically expanding its footprint.
The pandemic has presented some production obstacles for Cirrus, as well.
Nielsen said about 95% of Cirrus’ components are produced in North America. Nevertheless, the company has experienced occasionally troublesome kinks in its supply chain and some price hikes since 2020.
“So, we took a little hit on the profitability that year. We were still very profitable. But it was more of a bottom-line hit,” Nielsen said.
Customer orders for new Cirrus airplanes have held surprisingly strong in the past couple years. Nielsen said the break from normal during the COVID-19 pandemic provided time and space for a number of people to pursue their interests in aviation.
In 2021, Cirrus shipped 528 new aircraft to customers, booking almost $633 million in sales, according to the General Aviation Manufacturers Association. That’s nearly a 16% increase in business compared to what it did in 2019, prior to the pandemic.
Nielsen believes that upward trajectory will continue, and Cirrus must meet the challenge of growing demand for its aircraft, even if it means shifting some work around.