153 lose jobs in LR at Dassault Falcon

LITTLE ROCK — Dassault Falcon let go 153 Little Rock workers Friday as the economic downturn took an additional toll on the state's aerospace business.

The French private-plane manufacturer is not the first among Arkansas' aviation businesses to make such reductions. Hawker Beechcraft, which also has a facility near Little Rock National Airport, Adams Field, announced earlier this year 2,300 layoffs company wide for 2009, as well as 500 in November, although the Wichita, Kan.-based manufacturer has declined to reveal how many in Little Rock.

Of Dassault's staff reductions, 111 workers were laid off and an additional 42 took"early out" offers. The center now employs 2,100, about the same as in early 2008, according to the company. A company spokesman declined to comment further.

"Each and every person affected by this layoff has been a valued member of our team and helped to contribute to our growth and success," John Rosanvallon, president and chief executive officer of Dassault, said in a prepared statement.

According to a study by the Arkansas Economic Development Commission in February 2008, the aerospace industry planned to add 5,000 jobs in the state during the next 10 years. According to a survey by the commission, aerospacewas Arkansas' No. 1 export in 2006, exceeding $1 billion.

However, the tide has turned for aerospace firms, said Kathy Deck, director of the Center for Business and Economic Research for the University of Arkansas at Fayetteville. "It's not terribly surprising that this industry is feeling the effects" of the economic recession, Deck said.

The industry has swung from having a backlog of orders to fill to "where orders are canceled and you just don't have as much need for the work force," she said.

At the same time, Robin Pelton, a regional manager with the Arkansas Economic Development Commission, said the agency's study was for a 10-year period. "I would think that those projections are still pretty accurate," she said. "Obviously, for the short-term, they're not."

In addition to the recessionary pressures, the industry has been demonized, said Michael Boyd, principal of the Boyd Group of Colorado, an aviationconsulting firm. The reaction to auto executives flying to Washington, D.C., for congressional hearings was used as an example of corporate greed, he said.

Corporate jets are now considered "a very expensive toy," Boyd said. "That's not true, but that is the political correctness of this moment."

It'll be a couple of years before the industry starts to recover, Boyd said. Until then, private-jet manufacturers will continue to lay off employees, he said.

Also "we don't know how deep the government's goingto get into basic finance. If you want to get financing and the government's involved, you'd better not have a corporate jet," Boyd said.

Dassault in 2007 announced $30 million in expansions at its Little Rock facility, accompanied by about 300 jobs. That was in response to the increased order for its planes, which are built in France and flown for finishing to the Little Rock operation. That new facility has a total of 827,000 square feet.

The jobs were expected to be mostly maintenance technicians and craftsmen, with average starting salaries of about $40,000. The payroll was expected to increase to about $200million by the end of 2007. When the company employed nearly 1,000, it had a payroll of about $116 million.

Arkansas is better off because the aerospace industry is diversified, Pelton said. When people aren't purchasing new planes, they utilize the maintenance facilities at companies like Dassault and Hawker, she said. "When one sector goes down, another one is usually going up."

In addition, the defense industry is in growth mode right now.

"The aviation industry itself is typically pretty cyclical," Pelton said. "So, while we're expecting a little bit of a downswing, it will be back."