Monday, August 25, 2008

Eclipse Aviation announces layoffs of 650 workers

ALBUQUERQUE, N.M. — Eclipse Aviation announced Friday it will lay off more than one-third of its work force, less than a month after the ouster of the company's chief executive.

The 650 layoffs, or roughly 38 per cent of the work force, come as the Federal Aviation Administration conducts an unusual 30-day review of the company's Eclipse 500 very light jet.

Last month, a management shake-up saw the ouster of founder and former CEO Vern Raburn, who has since left the company.

Roel Pieper, the new CEO of the Albuquerque-based manufacturer, said Friday that the layoffs were necessary.

"Financial stability is critical for this company and unfortunately, a reduction in work force was necessary to achieve it," Pieper said in a news release. "I am confident this action will set the company on the path to profitability so that we can continue to lead the very light jet category."

The layoffs include temporary workers and people employed less than six months, the news release said. They affect all departments and includes facilities in Albuquerque, Gainesville, Fla., and Albany, N.Y.

The company says it now employs 1,100 workers.

The layoffs will slow production of the Eclipse 500 through the end of the year, the company said.

Eclipse declined to comment further. Calls to two company spokespeople were not immediately returned Friday.

Eclipse had produced about 230 jets and had 2,300 outstanding orders at the end of July, company officials said then.

The FAA announced earlier this week that the agency is conducting a review of the Eclipse 500 very light jet aircraft in response to union reports of safety problems when the planes were certified in 2006. The FAA put together a review team Aug. 11 to look at the airplanes' safety and certification.

Pieper, who also was chairman of the European Technology and Investment Research Center Aviation, or ETIRC Aviation, was made Eclipse's CEO at the end of July.

ETIRC Aviation came to Eclipse's rescue in January with a more than $100 million investment in exchange for expanding its territory into Western Europe and the United Kingdom.

Eclipse Aviation History