More Change In The Air At Hawker Beechcraft

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Friday, November 12, 2010

New information on more change in the air at Hawker Beechcraft.

In a conference call today, Hawker Beechcraft Chairman and CEO Bill Boisture spoke candidly about offers made to the company and about closing a production line.

The comments are from Hawker Beechcraft's third quarter financial conference call. A quarter in which the company sold fewer jet aircraft, generating $163 million dollars less in sales than the same quarter last year. But, how much of the company ultimately stays in Wichita, is still up in the air.

"The business and general aviation segment continues to operate in a very challenged market," Boisture said in the conference call.

And that challenged market, with jet sales seemingly grounded, is forcing changes at Wichita-based Hawker Beechcraft. "This is a very difficult market," he continued.

Hawker delivered 49 aircraft in this recent third quarter compared to 64 in 2009's third quarter. The decline was mostly in jet products. Because of that, Boisture says Hawker will stop producing the Hawker 400 XP light business jet for two years beginning in January 2011.

"We made a decision, we think, that puts the future of that product out beyond the current economic problem," Boisture said.

But the question remains whether that jet production, and other lines, will remain in Wichita when the recovery returns. Boisture used the conference call to talk about recent stories KAKE and others have reported concerning possible manufacturing moves to other states.

For example, Boisture talked candidly about the Louisiana offer. "We did receive an offer of incentives from the state of Louisiana to move substantially all of our manufacturing facilities," he said.

One of the key points in Louisiana, he said, is offering incentives for substantially all of Hawker's manufacturing facilities. "Substantially all" doesn't sound like small shop work. "We also received an offer of incentives from the state of Kansas to keep the majority of our production here in Wichita," he added.

But the Kansas offer was contingent on getting a contract agreement with the machinists involving pay cuts and other concessions. It was rejected. "At this time, we have no plans to reopen discussions with the union in advance of the existing contract that expires in August, 2011," Boisture said.

As for the business proposals? Boisture said, "We're continuing to evaluate different proposals and we'll make a decision regarding them in coming months."


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