As 2009 begins, about 500 furloughed Cirrus Design Corp. employees are preparing to get back to work building airplanes. The Duluth-based company plans to restart its production line Monday, after a month of inactivity prompted by weak sales.
Cirrus' suppliers are recalling workers, as well. Northstar Aerospace of Duluth ceased production itself, following the lead of Cirrus, its largest customer. Next week, the company expects to have 38 to 40 people back on the job, producing components for Cirrus airplanes.
"We're probably restoring about 20 percent of our work force initially, and we'll be growing that to 30 or 40 percent over the next couple months," said John Eagleton, Northstar's CEO.
Cirrus, too, will recall some of its employees in stages. At the end of November, the company furloughed about 335 workers in Duluth, plus another 165 in Grand Forks, N.D., where it produces composite materials for its airplanes. The company plans to recall its entire work force in Grand Forks and all but 60 in Duluth this coming week, said CEO Brent Wouters, explaining that additional workers will be phased in, as needed.
"It took a while to wind down our production, and it will take a while to wind it back up," said Bill King, Cirrus' vice president of business administration.
ADVERTISEMENT
Wouters noted that additional staffing adjustments still may be necessary.
Cirrus has capacity to produce 16 airplanes weekly, but Wouters said the company aims to manufacture eight per week, in light of current market conditions.
"Our production rate will be driven by demand," he said.
During the furlough, Cirrus has continued to provide insurance benefits for its workers and has offered supplemental pay to complement unemployment.
Dave Hudyma, founder of SCS Aircraft Interiors of Duluth, estimates that about 75 percent of his business comes from Cirrus, so he's obviously pleased to see the company back in action.
"When they shut down, it hurts," he said.
Hudyma said he has been in survival mode since Cirrus halted production. He has been able to pick up some extra sewing work from a colleague in the business, but it wasn't enough to keep his staff of 15 people fully employed.
"We had to cut back on hours. But we have a good, understanding crew, and we've been able to keep it together," Hudyma said.
ADVERTISEMENT
Getting Cirrus back into production is especially crucial for the financial health of SCS, because the company has just invested about $2.7 million to put up a new facility at Duluth's Airpark commercial/industrial development.
Despite recent challenges, Eagleton said he's feeling encouraged as Northstar Aerospace enters 2009, not only because of Cirrus restarting but also because of developments with another key customer, Eclipse Aviation. While Eclipse is in the midst of restructuring through a Chapter 11 bankruptcy, Eagleton said it appears the Albuquerque, N.M.-based company will resume production in February.
Additionally, Eagleton said Northstar has used some of its recent down time to drum up new business, both in the aviation in wind power industries.
"Things are looking much more positive for us than they were a month ago," he said.
