Mar 5 2009
General Dynamics (NYSE: GD) announced today that, as a result of deterioration in the backlog, particularly during the month of February, and continued weak demand, Gulfstream Aerospace has found it necessary to cut large-cabin aircraft production and green-aircraft deliveries from a projected rate of 94 to 73 in 2009. Gulfstream also will reduce production of its mid-size aircraft from a projected rate of 30 to 24 aircraft this year.
Gulfstream is taking these measures in an effort to both stabilize its backlog of aircraft orders and level-load production over 2009 and 2010.
This action will result in a reduction-in-force of 1,200 workers, including approximately 550 contractor personnel.
"Despite the current challenges, we continue to believe that Gulfstream's backlog provides a solid foundation for the business in this tough market environment," said Nicholas D. Chabraja, chairman and chief executive officer of General Dynamics. "We regret the impact of these actions on our employees and their families, and are doing our best to minimize the number of workers effected.
"As a direct result of the action we have taken at Gulfstream, General Dynamics is updating its guidance with respect to earnings for 2009. We are lowering that guidance from the previously stated range of $6.70-$6.75 to a range of $6.00-$6.10," Chabraja said.