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Slow production force Eclipse Aviation to cut work force

By Erik Siemers
Saturday, October 20, 2007

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Dozens of Eclipse Aviation workers have fallen victim to high expectations.

The Albuquerque jet-maker said Friday it had cut its workforce of 1,500 by an undisclosed amount. The cuts come largely because the company is producing its Eclipse 500 light jets at a slower pace than it had expected.

"We're not where we wanted to be with production, but our head count was higher," said company spokesman Andrew Broom.

While the privately held Eclipse declined to identify how many workers were released, Broom confirmed that most were temporary hires and only a "handful" of full-time Eclipse employees were laid off.

Bruce Perlman, the city's chief administrative officer, said the job cuts number about 100. And while the cuts might not involve the permanent work force at Eclipse, they did spark the concern of Mayor Martin Chavez, he said.

"He has directed the (city) Department of Economic Development to begin to work with the Chamber of Commerce and stand by to make sure that these folks are given opportunities to get placed and stay here in Albuquerque," Perlman said. "Our assumption is it won't be difficult to place them. These are skilled and trained and experienced employees."

Eclipse has received 2,600 orders for its $1.6 million, twin-engine Eclipse 500 jets. So far, it has certified 50 jets coming off the company's production lines, Broom said.

Eclipse officials said in April, when the Federal Aviation Administration certified the company's production process, that they hoped to see one completed aircraft off the line a day by the summer.

Broom said they are nearing that mark, but the company is staffed to a level as if it were producing more than one a day, he said.

The work force "had grown to a projection to where we thought we were going to be right now," Broom said. "And we're not there."

The company, over time, has made a big deal of its ability to meet projected deadlines. Broom said Eclipse's inability to meet its production goals could stem from varying reasons, including certain positions on the production line and issues with suppliers.

"The biggest (reason) is, this is a lot harder than we thought it was going to be," Broom said. "We thought we'd be further down the learning curve. We're not blaming an entity. We're not blaming a person. We are not where we wanted to be."

The cuts are "across the board," Broom said. "Production isn't just someone out there popping rivets. Production is engineering; production is quality; production is everything."

He said that as production rates increase, so will Eclipse's hiring. The company continues to hire in "certain strategic areas," Broom said.

While the company claims its production levels are the cause of the cuts, Richard Aboulafia, an aviation analyst with the Teal Group in Fairfax, Va., and frequent Eclipse critic, offered a different theory.

"I'm going to go with the alternative explanation that cash is becoming an issue," Aboulafia said. "That's what happens when . . . you've got this enormous factory and a lot of people, and you're delivering planes for less than the cost of building them. You're going to run out of cash fast."

Broom, however, said that assertion is incorrect.

"It's not true at all," Broom said. "Financially, we are very healthy right now."