People keep saying “sales are in the toilet” but I don’t think that’s actually true. If you saw the last all hands, sales actually looked stable but operating earnings we’re down indicating the cost of doing business had gone up. Personally I read into that as our aircraft deliveries and ability to collect the sales cash from customers have tanked. This is evidenced by the engineless G600’s just sitting along Press Henne among other things.
What led to all of this?
Well, our company unexpectedly has to go and acquire Nordam after it went bankrupt. Although Mark hinted that the production line is up and going now, I still suspect its struggling to get parts out.
Gulfstream has also been dishing out a lot of cash for projects such as the brand new service center by the old airport.
Then you have increased tariffs on our products being sold to China and increased costs on aluminum used to build the planes in the first place.
There also appears to be the initial signs of the financial markets topping out and perhaps the economy as a whole experiencing a downturn soon.
Finally, yes other program delays here and there also aren’t helping.
So yeah ... there is ample reason why Gulfstream needs to immediately cut costs in order to preserve it’s overall viability in the long run.