Grand Forks news

Got this off of I dont how they are going to do it. With the work force they had it was hard even to get the december numbers without screwing up.This is definitly going to slow production way way down.

LOCAL LAYOFFS: Cirrus pins hopes on job recall
Airplane maker may rehire laid-off workers within 90 days
By Peter Passi
Knight Ridder Newspapers

Within 90 days, Cirrus Design Corp. hopes to rehire most of the 127 workers it laid off on Friday, but company spokesman Ian Bentley acknowledges that a number of workers likely will take jobs elsewhere before a recall occurs.

The airplane maker’s decision to cut 20 percent of its work force cost Duluth 104 jobs; Grand Forks 20 jobs; and Hibbing, Minn., three jobs. The company continues to provide jobs for a total of 512 people, including 367 at its headquarters and production plant in Duluth.

Cirrus President and CEO Alan Klapmeier said the layoffs were necessary as the company takes steps to improve its productivity.

“As painful as it is to have layoffs like this, we really had no choice,” he said.

The company repeatedly has failed to meet its goal of producing one single-engine, four-passenger airplane per day of operation. Meanwhile, unfilled orders for its airplanes have been mounting. The waiting list has 639 customers on it.

The October 2000 introduction of a new aircraft called the SR22 hasn’t simplified the matter. Although the 310-horsepower SR22 is built on the same frame as Cirrus’ flagship airplane, the 200-horsepower SR20, Klapmeier said adding the airplane into the company’s product line has been a challenge. “There are different parts to deal with, and the integration didn’t go as quickly or smoothly as we had hoped.”

Chain effect

Cirrus expects to complete its first SR22 order today. Bentley said that delays in one part of operations had a chain effect. “We had situations where people were hopelessly underemployed for a while, and then they would have to work overtime.”

To iron out operations, Bentley said the company will call on the expertise of consultants and investors with manufacturing backgrounds to evaluate assembly lines and operating procedures. The company has no plans to close any of its operations, Klapmeier said, adding that Duluth will continue to be the Cirrus base.

However, Klapmeier said Cirrus continues to search for additional capital. “Finding funding has been very difficult,” he said. “If there’s not a chicken, there’s not an egg.”

But Klapmeier said the company is in no worse position than it was in the past; Cirrus has been searching for investors almost nonstop since its start. To date, about $85 million has been invested in the company, Klapmeier said. Although he wouldn’t disclose investors’ identities, he said they number about 260 in all.

In 2001, Klapmeier hopes Cirrus will begin turning its first profits. Since the company began production in 1999, it has produced 111 airplanes. Klapmeier said sales reached $1.5 million in 1999, topped $20 million in 2000 and should hit $75 million this year.

The company has beefed up its work force to meet production demands. Even with the recent cuts, Bentley said Cirrus employs about twice as many people as it did a year ago. Klapmeier said continued strong demand for Cirrus airplanes gives him reason for optimism, even if the nation’s economy weakens. Bentley said Cirrus received orders for 47 airplanes in January.

Mike Schrader, North American sales director for Lancair Co., another young aircraft producer in Bend, Ore., said there is a lot of pent-up demand for personal aircraft. He said Lancair has received more than 150 orders for its newly introduced 310-horsepower Columbia 300 airplanes. His company, which employs about 140 people, is producing about two airplanes a month, and it expects to boost that to six soon. Even with production improvements, Schrader said the orders will be backed out for about 22 months.

Klapmeier said the demand for airplanes places Cirrus in a far different position than some other businesses.

“We’re fortunate to have a backlog. .¤.¤. This isn’t the taconite business or the automotive industry,” he said. “They can produce more than people want to buy. We can’t.”

Many regulations

Schrader said the regulatory hurdles and the costs involved in producing a new airplane are formidable. “To certify production is nothing short of a miracle,” he said.

But Cirrus’ achievements to date have made a big impression on Schrader, who predicts the company will be around for a long time.

“The guys at Cirrus are sharp. I have a lot of respect for them.”

Back to top


This is an interesting article. It adds a few more pieces to the puzzle. I’ve wanted to comment on the latest developments, but was waiting to hear a bit more.

To qualify myself, I work in the automotive industry, specifically in software analysis and development for manufacturing support systems.

“We had situations where people were hopelessly underemployed for a while, and then they would have to work overtime.”<

That one quote tells the whole story. This is a production environment that has failed, most likely from a combination of design and management problems. I would guess that the initial flow and job breakdowns were setup in error.

The breakdown was probably modeled after other aircraft assembly lines. Unfortunately the differences between producing a plastic vs. aluminum plane where probably not factored in. Once backlogs and delays were seen the initial solution was to throw more people at the problem. In my experience that usually only works for a short time, while you look for the real solution. It looks like management was hoping that more people was the solution and increased production and the new model margin would bail them out.

The folks at Cirrus have shown great skills at the conception and implementation stages, manufacturing is a completely different animal. ItÂ’s a learning process the KlapmeierÂ’s are going to have to go through.

I think we will see a few personnel exit at this stage. Some wonÂ’t agree with this move, and some who wonÂ’t take the necessary next steps.

A complete review is in order and looks to be in process. Feedback systems will need to be put in place so that the process can be adjusted and grown from this point. I would not be surprised by a complete shutdown for a short time.

I think Cirrus will come out of this a better manufacturing company (heck if they werenÂ’t so far away IÂ’d sign on), itÂ’s a tough lesson. ItÂ’s not good for PR, but in the end their great products will shine in my opinion.