Vought Aircraft Industries will lay off around 600 workers by mid-year in an effort to trim costs after posting a 2005 net loss of $229.7 million.
The cuts are largely targeted at Vought’s corporate headquarters in Dallas, and will primarily impact salaried employees who do not build any products, says the company spokeswoman. It is “trying to eliminate layers of management”, Vought adds.
Under the plan, about 450 notices will be distributed this month, with another 150 employees scheduled to leave the company a few months later. This will result in a 15% to 20% reduction in Vought’s so-called “non-touch” workforce.
Vought president and chief executive Elmer Doty in a message to employees says: “What I am announcing is difficult but necessary, given our situation. Our situation is simple - we are spending more than we are taking in. We have to fix this.”
Doty adds that staff reductions are only one of several initiatives aimed at improving near term cash flows and lowering the business’ cost structure. The company spokeswoman stresses, however, that Vought does not intend to announce layoffs for its skilled trade workforce.
Vought’s 2005 net loss of $229.7 million represented a near 50% year-on-year increase on the $155 million net loss posted in 2004. A major airframe supplier for the Boeing 787 programme, Vought blamed the loss on “increases in disruption costs caused by facilities consolidation, revised cost estimates on new and existing programs, increased costs related to pension benefits and the continuing planned investment” in the 787.
MARY KIRBY / PHILADELPHIA
Source: Flight International
