GRAHAM WARWICK / WASHINGTON DC
Chief executive post axed as part of Textron plan to streamline management, leaving new leader in challenging position
Cessna president Charlie Johnson has taken over leadership of the general aviation manufacturer. Russ Meyer, who returned as chairman and chief executive after the unexpected departure of Gary Hay in June last year, has assumed the role of non-executive chairman.
Johnson retains the title of president, but reports directly to Textron executive president and chief operating officer Steve Loranger. The chief executive position has been eliminated as Textron moves to streamline its structure. Late last year the parent company eliminated its recently created Aircraft sector, which brought together Cessna and helicopter manufacturer Bell.
Johnson takes control of Cessna at a challenging time. The company has reduced planned production of Citation business jets from 250 to 220 aircraft, down from 307 last year and 313 in 2001, and may be forced to reduce rates further as at least 25% of deliveries remain unsold. The company took orders for 300 business jets last year, but most of them are for delivery after 2004.
New orders include 170 Citation CJ3 light jets, worth $1 billion, with deliveries beginning in mid-2004. Cessna holds deposits on more than 300 Citation Mustang entry-level business jets, which it will begin converting to firm orders once it has selected an avionics supplier and completed definition of the aircraft. Deliveries of the $2.6 million Mustang are to begin in late 2006.
The Wichita, Kansas-based manufacturer plans a three-week halt in production of the Caravan single-turboprop utility aircraft in May, with deliveries this year expected to be below last year's total of 80. Output of piston singles is also forecast to be below last year's total of 559 aircraft. Production of Lycoming piston engines and McCauley propellers has also been hit by the downturn.
Johnson expects revenues to remain flat in 2003 and 2004, and is hoping for a recovery in 2005. Cessna had revenues of $3.3 billion last year, 71% from Citations, 4% each from Caravans and singles and 3% from Lycoming. The company has cut employment in Wichita by more than 2,100 in the past six months.
Source: Flight International
