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Aircraft CEOs expect stalled growth, stable employment in 2010

  • The Wichita Eagle
  • Published Wednesday, Dec. 16, 2009, at 12:06 a.m.
  • Updated Wednesday, Dec. 16, 2009, at 6:22 a.m.

Nearly all of the top executives of Wichita's aircraft manufacturers said they think employment at their companies will stabilize in 2010, but they don't foresee any growth in their business next year.

They discussed their expectations for the coming year and other issues facing the general, commercial and military aviation markets at a CEO roundtable at the Wichita Aero Club's monthly meeting on Tuesday at the Wichita Airport Hilton.

Included in the roundtable were Jack Pelton, CEO of Cessna Aircraft; Bill Boisture, CEO of Hawker Beechcraft; David Coleal, vice president and general manager of Bombardier Learjet; Jeff Turner, CEO of Spirit AeroSystems; Scot Oathout, director of B-52 and refueling systems for Boeing Wichita; and Mac McClellan of Flying magazine.

"It's starting to feel like it's stabilizing," Pelton said of the business jet market.

But Pelton said production rates next year will be "significantly low," as will airplane orders "for some period of time."

Bombardier's Coleal echoed Pelton's observation.

"If you look at some of the indicators... there is stability," Coleal said. "But we're not seeing the kind of pick-up we'd like to."

Hawker's Boisture said his company is also expecting lower production rates and fewer orders.

"We've taken this opportunity to get our production capacity in balance with the market," Boisture said. "We hope we have our employee base stabilized."

Spirit's Turner said his business "has been particularly strong" in the down cycle.

"Clearly the jet transport market... has not been hit to the extent (of the general aviation and business jet markets)," Turner said.

But Turner said that 100 percent of the analysts who follow sales of airliners are predicting a slowdown.

Oathout said he expects demand for military aircraft to slow as a result of "flat to somewhat declining" budgets for the Air Force and Navy.

He said the company is in the process of completing previously announced layoffs of 800 workers and that he expects production declines to begin in mid-2010.

The executives do expect the industry to recover, but it may be 18 months before they have a better idea of what that recovery will look like, they said.

They also discussed outsourcing. They said the term shouldn't have a negative connotation.

Turner noted that Spirit benefits from outsourcing because its primary function is to build parts for airplane manufacturers including Boeing, Airbus and Cessna.

Boisture said that as his company sells more aircraft internationally, buyers want more than just the airplanes.

Their answer, he said is "Yes we want them, but we also want to build part of them," Boisture said. "I believe we're going to drive that conversation more and more, and I think we're going to have to be imaginative about what we share."

Reach Jerry Siebenmark at 316-268-6576 or jsiebenmark@wichitaeagle.com.

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