Thousands of workers at one of the Coastal Empire’s biggest employers could be idled for a long time.
General Dynamics, parent company of business jet maker Gulfstream, announced Thursday morning it will cut large-cabin aircraft production from 94 to 79 for 2009. The company cited a deterioration in the backlog and weak demand. Gulfstream’s Savannah operations produce the G350, G450, G500, G550 and G650 large cabin aircraft.
General Dynamics move, which includes a cut in production of its mid-size aircraft, means the loss of 1,200 jobs, including about 550 contractors.
Some of the contractors who will be out of work will be advised as early as Monday, said Robert Baugniet, director of corporate communications for Gulfstream.
“The rest are full-time employees, and they will be advised in the next couple of months,” he said.
Gulfstream’s mid-size aircraft are produced in Dallas, and the company has service centers in Brunswick, Appleton, Wis., Dallas, Long Beach, Calif., and London.
“We know now what our production rate will be. Managers will be working those numbers and adjusting the workforce and identifying those people who sadly will be let go,” Baugniet said.
Gulfstream’s Savannah operations also will furlough more than 1,000 workers this summer. Those employees are involved in the initial phase of aircraft manufacturing, which includes assembly. Employees who support the initial phase also will be affected.
The furloughs will start in July and are expected to last five weeks. Employees who are furloughed may file for unemployment.
“We will not manufacture aircraft in that five-week period,” Baugniet said. “We only build to order. It’s not like automobiles.”
The price tag for a jet, depending on the size and the accommodations inside, could run from $14 million to $49 million.
The moves could have a significant impact on Effingham County. About 1,800 of Gulfstream’s 6,000 Savannah and Brunswick employees live in the county, or nearly 30 percent of the workforce.
“The impact on the overall economy is going to be fairly significant,” Baugniet said.
About 85 percent of the business jets in use are not reserved for use by corporate chief executive officers but are used to allow employees to go about their jobs, Baugniet said.
The company may restore its workforce once the economy improves and orders for jets pick up, according to Baugniet.
“The question is, when is that going to happen,” he said.