Thread regarding Hexcel Corp. layoffs

Stamford-based Hexcel announces job, salary cuts due to coronavirus - By Paul Schott Updated 8:10 am EDT, Thursday, April 23, 2020

  • Stamford-based Hexcel announces job, salary cuts due to coronavirus
  • STAMFORD — Aerospace and defense materials producer Hexcel is moving forward with sweeping cost-cutting measures — including several hundred layoffs on the west coast, as well as salary cuts and furloughs — as it grapples with drop-offs in revenues and profits.

The 11 percent year-over-year decrease in returns to $541 million reflected disruption from coronavirus-sparked temporary closures at Hexcel plants and customer facilities, while it also dealt with the hit to demand from the continued grounding of Boeing 737 Max planes. Quarterly profits plunged from about $72 million a year ago to around $42 million.

Coronavirus concerns prompted Hexcel earlier this month to cancel a planned merger with another industry powerhouse, Woodward.

“Going forward, we anticipate significant declines in demand within the aerospace and industrial markets that will challenge us for the remainder of the year,” Hexcel CEO, Chairman and President Nick Stanage said in a statement. “While we do not yet know how long this pandemic will last or its continued impact on customer demand, our Hexcel team is acting decisively to realign our operations in this rapidly changing business environment.”

So far this month, Hexcel has reported a total of 288 permanent layoffs at its plants in Burlington and Kent in Washington state and 50 temporary layoffs at its offices in Dublin, Calif., according to those states’ labor records.

Hexcel officials said in their earnings report they intended to reduce the total workforce “to align operations with customer demand.”

As of Dec. 31, 2019, the No. 932 firm in last year’s Fortune standings had employed 6,626 full-time employees and contract workers.

That contingent included 3,567 in the United States and 3,059 in other countries. Approximately 45 employees are based at its main offices at 281 Tresser Blvd., according to its website.

At the same time, the company is implementing temporary salary reductions and unpaid furloughs for all salaried employees whose positions have not been not eliminated.

Base pay for Stanage and cash compensation for each board member would be reduced by 50 percent until further notice.

Hexcel is also eliminating contract labor and overtime while reducing discretionary spending to “essential items only.”

“While decisions that impact employees are always difficult, the additional actions we are taking will help us preserve many critical jobs as we continue to serve our customers in line with changing demand. Hexcel entered this pandemic with a strong balance sheet and liquidity position,” Stanage said. “These measures are positioning the business to emerge strongly once the pandemic is over and capitalize on continued secular growth of advanced composites.”

In addition, the company is suspending its stock dividend and stock-buyback program, decisions that will be evaluated each quarter. It is also suspending its employee stock-purchase plan and match on employees’ 401(k) contributions until the end of the year.

Those changes followed an April 6 announcement that the company would reduce costs through a hiring freeze, travel restrictions, reduced capital expenditures and an evaluation of employment levels.

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