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Eclipse Aviation Announces Job Cuts

Company Reduces Work Force By 38 Percent

POSTED: 8:20 am MDT August 22, 2008
UPDATED: 8:36 pm MDT August 22, 2008

Several employees of Albuquerque-based Eclipse Aviation told Action 7 News they lost their jobs Friday morning in a mass firing at the jet maker.

Eclipse Aviation said it will lay off about 38 percent of its employees in an effort to achieve financial stability.

A former employee, who asked to remain anonymous, described the mood Friday morning as somber and said the company had security officials at the doors. The former employee said workers showed up Friday morning, were separated into groups and made to wait.

"Just waited, half an hour, 45 minutes until they gave us the whammy," the employee said.

The former employee said workers were told the cuts were based on the skill set of each worker.

The Albuquerque-based company said the layoffs of 650 employees include temporary workers and people employed less than six months.

The company said in a released statement it intends to increase production back to previous levels next year. But the former employee said if their job opens back up they won't get asked back, but will have to re-apply.

The layoffs come less than a month after a management shakeup that saw the ouster of founder and former chief executive officer Vern Raburn.

The new CEO, Roel Pieper, said the layoffs are needed to take the Albuquerque manufacturer to the next level of growth.

"In my effort to take Eclipse Aviation to the next level of growth and sustainability, I am 100 percent focused on operational excellence and a plan to achieve it," said Pieper in Friday's statement. "Financial stability is critical for this company and unfortunately, a reduction in workforce was necessary to achieve it. I am confident this action will set the company on the path to profitability so that we can continue to lead the very light jet category."

A conference planned next week to re-evaluate production plans for the company already had some people in business with Eclipse nervous.

One of those suppliers told Wall Street it expects Eclipse to announce production cuts.

Textile and composite maker Albany International warns that its customer Eclipse Aviation plans to cut production of the Eclipse 500 jet airplane.

Albany said that would hurt sales and profits in its Albany Engineered Composites segment.

Albany said sales to Eclipse has accounted for a significant portion of AEC's 2008 revenue and a significant portion of production at its facility in Boerne, Texas.

Eclipse spokeswoman Alana McCarraher said no decision had been made on whether to cut production of the Eclipse 500.

McCarraher said that the worried supplier is jumping the gun.

McCarraher said Wednesday Eclipse is inviting the company's suppliers to Albuquerque next week for a conference. McCarraher would not say exactly what the company will tell suppliers at the meeting, but said production cuts are not set in stone. McCarraher also said Wednesday that there were no layoffs scheduled at that time.

"We are re-examining our production process and ramp rates to strive for operational excellence," she said. "We plan to discuss our business plan with our suppliers at a conference next week, " the company said in a statement released Wednesday.

Eclipse Aviation would not release how many employees from each location the cuts would be coming from, but sources have told Action 7 News that a majority of those cuts will come from New Mexico.


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