CAE Furloughs One Quarter Of Its Workforce Due To COVID-19

CAE prototype ventilator.
Credit: CAE

Aviation and healthcare training provider CAE on April 6 announced that it has furloughed one-quarter of its workforce among “flexible measures” being implemented in response to the COVID-19 pandemic.

CAE said it has furloughed, or temporarily laid off, 2,600 of its 10,500 employees and placed another 900 workers on a reduced work week to help manage a slowdown in training activities and protect its financial position during the pandemic.

The company also announced plans to manufacture thousands of CAE-designed patient ventilators in the coming months from its main manufacturing site in Montreal as well as in other locations.

Among other cost-containment measures, CAE is suspending its common share dividend and share repurchase plan, reducing capital expenditures and research and development investments and cutting salaries for staff not affected by reduced workweeks. The salary reductions are 50% for the CEO and top executives, 30% for vice presidents, 20% for directors and managers and 10% for group leaders and employees.

The company said that in the wake of the coronavirus crisis it is working to access government emergency relief measures and wage subsidy programs in its main operating jurisdictions.

“We entered this crisis from a position of strength with a leading market position, a balanced business with recurring revenue streams, and a solid financial position,” President and CEO Marc Parent said. “Taking decisive, yet flexible action will help to protect our people and operations over the short term and gives us the necessary agility to resume long-term growth when global air travel returns.”

CAE’s civil aviation operations are most affected by the business slowdown caused by the pandemic, with services related to new pilot training substantially reduced, Parent said. Two-thirds of the company’s 50 civil training centers worldwide continue operating, but with reduced utilization.

Defense and security operations have experienced less of an impact because governments consider them essential. CAE said 90% of its operational sites continue to provide services to defense forces.

CAE is providing complimentary training seminars on preparing healthcare workers to treat patients with COVID-19, and will introduce web and hardware-based simulation training systems to train workers in the safe practice of ventilation and intubation.

Engineers and scientists with CAE Healthcare designed an “easy to manufacture” ventilator prototype in 11 days to provide life support to patients in hospital intensive care units. The company is sourcing components and plans to begin production of ventilators once Health Canada approves the design.

“We are all proud of the impact we can have by putting our expertise to work to create a ventilator that can help save lives in the fight against COVID-19,” Parent. “Once this prototype is approved by public health authorities, we are looking at manufacturing thousands of units in our Montreal plant and in other sites over the next few months.”


 

Bill Carey

Bill covers business aviation and advanced air mobility for Aviation Week Network. A former newspaper reporter, he has also covered the airline industry, military aviation, commercial space and uncrewed aircraft systems. He is the author of 'Enter The Drones, The FAA and UAVs in America,' published in 2016.