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Saturday, October 20, 2007
Eclipse Releases Over 100 Workers
By Andrew Webb
Journal Staff Writer
Eclipse Aviation, which continues to lag behind expected jet production rates, let go more than 100 employees Friday.
Eclipse spokesman Andrew Broom said Friday the company "overstaffed" in hopes of reaching a production rate of several jets per day, but ongoing internal and external challenges have kept it at less than one.
He said most of the omitted jobs were those of temporary agency employees and contractors.
"We staffed up to be at a higher production rate, and we're not at the rate we're supposed to be," he said.
The company would not give an official number of employees let go, but Broom said estimates of 150 made by city officials to news outlets Friday morning were high.
Eclipse still employs more than 1,500.
Broom said the cuts were "across the board," and not specific to any single department or task.
He said the decision was made because Eclipse's daily production of its $1.6 million Eclipse 500 jets is "not where we wanted to be."
Eclipse had hoped to be able to produce two aircraft per day by this time as it works to fill a backlog of orders and enter profitability.
Albuquerque Chief Administrative Officer Bruce Perlman said Mayor Martin Chávez had directed the city's Economic Development Department to "stand by" and work on plans for placing the employees in new jobs.
He said he had heard the number was about 100.
"We believe that won't be too difficult, because since they've been working for Eclipse, they're most likely skilled, well-trained and expert employees, and we have a humming economy here," Perlman said.
Eclipse has faced multiple growing pains as it transitions to a full production status. Its founder and CEO, Vern Raburn, has said increasing production is "harder than we thought it would be."
He blamed delays on internal and external factors, such as last-minute tweaks to systems like avionics, problems with internal paperwork and supplier delays.
The company has offered discounts to some customers for late delivery.
Eclipse has estimated that it could eventually produce up to four aircraft a day in its existing complex near the Albuquerque International Sunport, depending on market demand.
Raburn has said Eclipse would need to build and sell at least 500 planes per year, or about 1.4 per day, to break even.
Since delivering its first plane to a customer in late 2006, Eclipse has certified more than 50 of the six-seat, twin-engine jets, and delivered more than 20 to customers like Florida-based DayJet, an air taxi firm that began service earlier this month with a fleet of 12 jets.
Broom said Eclipse was "pretty confident of its financial status" as it struggles to reach a profitable level of production. The company has raised an estimated $1 billion in investments.
"We're not where we wanted to be, but we've made some big gains," he said, citing, as an example, a recent reorganization of the production lines to fix problems and speed the process.
The company is still hiring in other departments, Broom said.