Business Growing At Cessna ... But So Are Challenges

Cessna plans to add 600 jobs to keep up with demand, but faces challenges to keep costs down.

WICHITA, Kan. (AP) - Business is booming so much at Cessna Aircraft Co. that the company plans to add 600 workers to keep up with demand.

Its backlog of orders is up 35 percent at a record $8.5 billion, international sales now account for half of the company’s deliveries and revenue rose from $3.48 billion in 2005 to $4.16 billion in 2006.

“Our factories are much busier than they have ever been,” said Jack Pelton, Cessna’s chief executive. “We were very effective in meeting our schedules. It’s a tribute to the team we have at Cessna.”

The market upswing is big news in a community that has lost than 13,000 aviation jobs since the Sept. 11, 2001, terrorist attacks.

Still, while dealing with the increased demand, which puts extra pressure on workers and suppliers, Cessna also is facing increased pressure to keep costs down to stay competitive.

Both Honda Motor Co. and Embraer are developing business jets that will compete with Cessna products. Pelton said the price of Embraer’s business jets is lower than others on the market.

“There’s going to be more cost pressure than we’ve ever seen in the past from these offshore manufacturers,” Pelton said.

Cessna is working with suppliers to cut down on parts shortages, which were higher last year than the company would have liked, Pelton said. That includes meeting with some suppliers to help with paperwork, efficiency and raw materials.

“Sometimes we are the problem,” Pelton said.

Company officials will decide this year whether to launch three new airplanes, a family of next-generation single-engine piston aircraft, a light sport aircraft and a wide-body jet.

Cessna is looking for ways to make the planes easy to build at its plant in Independence, including using composite materials that would have to be purchased from outside providers.

“We are not experts in composite manufacturing,” Pelton said.

The company has developed a proof-of-concept for a light sport airplane and is talking with potential customers. But to sell the plane at a competitive price, about $100,000, Cessna must reduce its production costs.

“It’s stretching us from how to do business efficiently to reach that low cost point,” Pelton said. “I’m very optimistic it will go.”

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