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LETTER DISTRIBUTED TO PRATT & WHITNEY EMPLOYEES REGARDING LAYOFFS AT COMPANY FACILITIES

 LETTER DISTRIBUTED TO PRATT & WHITNEY EMPLOYEES
 REGARDING LAYOFFS AT COMPANY FACILITIES
 EAST HARTFORD, Conn., Oct. 16 /PRNewswire/ -- Attached is the letter distributed today to Pratt & Whitney employees from J.G. O'Connor, president, announcing layoffs of 4,800 employees by June of 1993.
 TO: All Employees
 I regret to announce that further job reductions will be required at Pratt & Whitney worldwide in response to the continued deterioration of economic conditions in aviation markets. I indicated reductions would be necessary in my August 6th letter to you, and since then, industry conditions, and particularly the outlook for commercial airplane deliveries in 1993, have become worse.
 Based upon the airplane companies' current projections, we will have to reduce our worldwide work force 4,800 employees between now and June of next year. Today, 876 of these reductions will take place in our Connecticut and Maine facilities through 695 layoffs and 181 voluntary separations. A further reduction of approximately 2,400 positions will occur in the first quarter of 1993, and the remaining 1,500 by the end of June.
 These reductions reflect drastically weakening industry conditions. Bankrupt airlines, too much capacity and the resulting fare wars are dragging down airline profits. These conditions are forcing airlines to reschedule their large commercial airplane and engine orders.
 A few months ago, Boeing, Airbus and McDonnell Douglas had scheduled production of 801 large commercial airplanes in 1993. That number has now been revised downward to 632, a full 21 percent reduction. Our engine production schedules must be reduced correspondingly, and we now anticipate a shop load for Pratt & Whitney in 1993 that is 21 percent lower than this year.
 These position reductions do anticipate some recovery in industry conditions in 1994. Specifically, the airplane companies' forecast for large commercial aircraft deliveries in 1994 now total 673, up from 632, in 1993.
 At the same time, our spares business remains under pressure, with volumes that are about 25 percent lower than 1990, prior to the recession. In addition, our military fighter engine business declines from 700 engines per year in the early 1980's to under 100 in 1993. These changes require us to permanently resize the company for the smaller commercial and military markets in the coming years.
 I remain completely confident in the future of Pratt & Whitney. We have today, with the PW4000 family, the PW2037 and the V2500, the most competitive product line positioning, compared with GE and Rolls-Royce, that we have had at any time in the last two decades. Our market share of the large commercial engine business has, in fact, expanded in the last few years from 30 percent to over 40 percent. We have the key F-119 award from our most important Air Force customer, Taiwan will purchase F-16's with our F100-PW220 engines, with deliveries between 1996 and 1999, and prospectively I believe we have the engine award for the F-15 aircraft for Saudi Arabia whose deliveries will run from late 1994 through 1997.
 These are unprecedented times in Pratt & Whitney's history. As I indicated, I am confident in the future, appreciate your support and commitment, and ask for your understanding in as tough a time for our industry as I have experienced in my 33 years at Pratt & Whitney.
 -0- 10/16/92
 /CONTACT: Curtis G. Linke of Pratt & Whitney, 203-565-4546/
 (UTX) CO: Pratt & Whitney ST: Connecticut, Maine IN: AIR SU: PER


DD -- NE005 -- 0901 10/16/92 11:21 EDT
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Publication:PR Newswire
Date:Oct 16, 1992
Words:571
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