Four days after ending a month-long production break, Cirrus Design Corp. announced a new round of staff cuts Thursday.
The company laid out plans to eliminate 50 support and administrative positions, mostly in Duluth, and also to extend the furloughs of 100 production workers in Duluth and Grand Forks, N.D., who've been off work since the end of November.
Thursday's reductions come on top of previous cuts. Cirrus eliminated 205 positions in September and October, including 146 in Duluth. And about 500 production workers were temporarily furloughed at the end of November, when Cirrus shut down its lines in Duluth and Grand Forks, N.D., adjusting to falling sales of airplanes. The furlough affected 335 workers in Duluth and 165 in Grand Forks.
Most of the 500 furloughed workers are now back on the job, but the time off will be extended by up to 90 days for about 60 people in Duluth and 40 in Grand Forks, said Bill King, Cirrus' vice president of business administration.
"If the market improves appreciably, we will be looking to call those folks back," King said, but he noted that it remains unclear whether sales will rebound. If they don't, furloughed workers may be cut.
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"We've told our furloughed workers, 'Don't be shy about looking for workelsewhere,' " said King, adding that he didn't want anyone to have a false sense of security.
Workers on furlough will continue to receive health insurance benefits, unemployment and supplemental pay from Cirrus.
Duluth's largest manufacturer expects to produce eight planes per week -- operating at half its capacity.
Not including its furloughed workers, Cirrus continues to employ about 900 people. Roughly 700 of those positions are in Duluth, according to King.
While King does not expect the latest cuts to substantially slow Cirrus' efforts to develop a personal jet, he said: "It's too early to know."
"The vast majority of the affected positions were not jet related," King said. "We're going to try to protect our jet program as best we can, but of course it's not immune from these difficult economic times."
King said Cirrus plans to announce several enhancements of its airplane line next week and expressed confidence the company has the right strategy to enhance its sales.
"We are still really bullish. Some of our competition is trying to strip down airplanes and create a product line that is less expensive. We're doing the opposite," he said. "For us, it's not about delivering a lesser product. It's about delivering a more robust product."
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While recent cuts and furloughs have been difficult, King said, they have helped Cirrus maintain a firm financial footing. He noted that cost reductions have enabled Cirrus to pay off $20 million in outstanding debt and have positioned the company to operate profitably, even at reduced production levels.
"I feel very good about where we're at as a company right now. But obviously I feel bad about losing some really talented folks," King said.
