Cirrus lays off 105 workers

Cirrus Design Corp. laid off 105 people Tuesday -- 30 at its Grand Forks plant, 75 at its larger Duluth plant -- a cut of about 9 percent of its work force, bringing it to "just above 1,100," said company president and chief operating officer, Brent Wouters.

It's part of a long-term effort to increase efficiencies at the two plants in the face of lowering demand worldwide for its aircraft, he said.

In early September, Cirrus laid off about 7 percent of its work force; 29 employees in Grand Forks and 71 in Duluth.

That would leave the company with about 220 workers in Grand Forks and about 905 in Duluth, based on published reports, unless there have been other reductions in the work force not yet announced.

Since early September, Cirrus has laid off about 19 percent of its work force.

A year ago, the company had almost 1,400 employees.

But Cirrus continues its production schedule of about 12 aircraft a week, or three per day during its four-day week, Wouters said. Earlier this year, it slowed its production from the capacity of four aircraft per day to three.

A week ago, CEO Alan Klapmeier told the Duluth News Tribune that the work week might be shortened to three days if demand doesn't strengthen. Production workers typically work 10-hour days.

Wouters said Tuesday that no further layoffs are scheduled.

Sales for the first half of the year were down 10 percent, company officials said earlier.

A new tax package passed this year by Congress would allow depreciation for tax purposes to be accelerated on the purchase of new aircraft this year, reducing the tax exposure considerably, Klapmeier told the Duluth paper earlier this month.

He hopes that will spur demand.

Wouters said the employees laid off today received the same severance package as those in the previous round of layoffs: one week of pay per year of employment.

"We're driving across the board for better cash flow, better efficiencies, in many areas of operation," Wouters said Tuesday. "I think we had just become a little bit complacent in watching those, of some good business fundamentals and making adjustments."

He hopes that will have the company poised to take advantage of increasing demand once the economy improves, he said.

While credit markets are tight, he said Cirrus does not need to go out and find new lines of credit to keep its production going.

Just in July, the company announced "that the most highly anticipated aircraft in the company's history" made its first flight over Duluth "and the aircraft performed flawlessly."

Called "The-Jet," the single-engine, seven-passenger aircraft has state-of-the-art technology as well as the patented "Cirrus Airframe Parachute System."

But Klapmeier said this month that the current economic travails worldwide no doubt will slow the introduction of that plane, as well as a smaller one, into production and the market.

Wouters said Tuesday the company's long-term goals remain bullish, and Tuesday's layoffs are part of a plan to weather the short-term storms.

The Grand Forks facility, where composite work, including curing, of the aircraft is done, remains an important part of Cirrus' future, Wouters said. Final assembly is done in Duluth.

Reach Lee at (701) 780-1237; (800) 477-6572, ext. 237; or send e-mail to slee@gfherald.com .