Waypoint: It’s not dead yet . . .
I am constantly reading headlines that say “recovery” and “positive numbers” when discussing our current economic situation in Canada.
November 2, 2010 By Rob Seaman
I am constantly reading headlines that say “recovery” and “positive numbers” when discussing our current economic situation in Canada. The fact is, I have written a couple of them myself. But when you read further, the current reports, in general, say deliveries are down, but billings are up. That’s interesting: you are getting more money for fewer products delivered. Or did I read it wrong? And on the charter side, one week the numbers are up and the next they are down. But, in general, when you burn through the writer rhetoric, you can see there is, in fact, a trend of upward and positive news across the board – for many – but not all. The hurtin’ ain’t over yet, I think.
I will admit to being a fan of Monty Python, and there’s an analogy here. Yes, I have a warped sense of humour. When it comes to the recession – or more correctly the after-effects thereof – I am reminded of the scene where a cart is being pushed along a street by a man calling, “Bring out your dead.” Someone brings out a body and dumps it on the cart. But then the person sits up and announces, “I’m not dead yet.” That seems to be how the recession is when you look into it. Looks dead and may be close to it, but not yet.
A case in point is Mississauga, Ont.-based Field Aviation, which let a fair number of folks go during the second week of September. More than a few were long-timers. The loss in intellectual property alone to the firm could be significant. At the same time, if the business is not there, you can’t continue to hold onto folks. In better times, employees would have shrugged it off and crossed the street to a new job. That will be hard right now. The jobs simply are not there.
In the bigger picture, this instance signals issues with one of the longest standing and respected service and maintenance providers in Canada. Some will say they have seen this from firms like Field before and it’s part of a cycle for them. While this may be true, it is, nonetheless, a significant indicator that all is not blooming in the economic garden as well as the government would like us to believe. It certainly makes one sit up and look around – or for those left at the firm, look over their shoulders a bit more. I seriously doubt Field is alone in this. Its, situation is, however, just a bit more public by nature of its size and reputation – and that gets attention.
Similarly, some recent sabre rattling from the rank and file at Wichita, Kan.-based Cessna made the news. The word “strike” was being bandied around pretty freely: interesting, considering the current market (or lack thereof) and the growth of Cessna operations in Mexico. Cessna recently announced it has developed its Mexico unit to four times the size it was originally.
Obviously, they have found a formula that works for them in that country. Meanwhile, back home in the United States, the folks in the plant have given them certain cause to look and consider things even more. And I have to think it would certainly not have hurt them (Cessna) much to close shop for a few weeks and tell clients – many of whom are not exactly jumping at the prospect of having to close a deal they made a few years back when things were better – that their delivery is delayed. You have to wonder what the rank and file are thinking, putting a gun to management’s head? Do they really think things are good enough to be making demands?
I guess some sense and sensibility hit them eventually. Only 49 per cent voted to strike and a new seven-year contract was ratified by default. Local reports in Wichita suggest that although 58 per cent actually voted to reject the Cessna contract, the reality of a paycheck versus having nothing meant the strike vote was defeated. Had the strike gone forward, it would have been the first at Cessna since 1976.
And just when you thought it was over and back to business, Cessna announced it is once again scaling back Citation production and will lay off 700 more workers. So, as Cessna sees it, things still are not as they should be. Interesting, considering the other major OEMs and the crystal ball gazers are all announcing the word of the day is recovery. Cessna had planned to deliver 225 Citations this year – down from 289 last year and 467 in 2008. And how many do they plan on delivering now? They are not saying. It leads one to think that perhaps Cessna is being a tad more honest about how things really are in the business today.
Rob Seaman is a Wings writer and columnist.