Engine manufacturer warns staff to expect more layoffs this year and next, although military sales are still strong

GE Aircraft Engines (GEAE) will cut up to 2,800 more jobs over the next 14 months as the company predicts no end to the industry recession before 2005.

GEAE president and chief executive David Calhoun last week told the company's 26,500 employees to expect 1,000 layoffs worldwide by the end of this year and between 1,200 and 1,800 more the following year. The company cut 4,000 jobs after 11 September.

Calhoun believes the industry is 12 months into what will be "a minimum 36-month slowdown," and unlikely to see an upturn before 2005. He says services have been harder hit than anticipated, with sales of spare parts $500,000 a day below plan. New commercial engine sales are also down, but not significantly below forecast.

Good performance in military engine sales is helping to offset some of the bad news, however. "Our military engine team made a significant bet earlier this year to advance release production ahead of orders in anticipation of an upturn. That bet is proving to be a sound decision. The military outlook remains good," says Calhoun.

"We believe the military engine business will remain vibrant through 2006...and that is helping to alleviate some of the pressures being felt in the commercial aviation world."

Meanwhile, after losing the $270 million contract for the US Air Force FAB-T satellite terminal last month, Raytheon has laid off 300 workers at its Marlboro satellite communications plant. The company has also laid off more than 200 at Marlboro and El Segundo as part of a reorganisation.

Source: Flight International