Hawker Beechcraft Lays Off 350 Salaried Workers

Management taking its share of the pain.

Hawker Beechcraft CEO Bill Boisture
answers reporters' questions in front of
the rebranded Hawker 200 during the
NBAA Convention in Atlanta.
Mark Phelps

Responding to the challenges of the current economy for general aviation, Hawker Beechcraft Corp. (HBC) this week delivered 350 pink slips to salaried staff. In a letter to employees, CEO Bill Boisture also outlined the schedule and details of 800 job losses for union-represented hourly workers that had been announced in September. In the Oct. 22 letter, Boisture outlined pay and benefit cuts management has undertaken in the past 24 months: "Reductions in benefits … have saved the company approximately $4.5 million in health care insurance costs and $5.7 million in matching 401(k) contributions. Our salaried, non-union employees have also foregone annual merit salary increases that have saved the company an additional $15 million." Boisture also said the senior leadership team had reduced their base salaries by 10 percent — and that they had invested some $6 million in company stock. The letter was clearly meant to address union-represented hourly workers' objections to the most recent contract extension — which involved pay cuts and reductions in company contributions for benefits. Under the current schedule, the 800 union jobs will be eliminated as follows: Plant I will close in August 2011, eliminating 470 positions. Some 195 jobs will be lost when King Air back shop operations move out of Plant IV, also planned for August. Eighty employees will be cut no later than July when electrical and upholstery operations will leave Building 94. The final phase of outsourcing the Logistic Center operations will cut 45 employees, and Plant II will close in May, reducing employment by 30. The work performed by these employees will either be outsourced to third-party suppliers or moved to HBC operations in Mexico. Boisture wrote: "These decisions and actions are intended to sustain and improve the company's financial strength and improve competitive capability during a very difficult time for the business aviation industry." The Wichita Eagle has reported over the past several weeks that HBC is considering a $400 million incentive offer from the state of Louisiana to move much of its manufacturing operations to Baton Rouge. Kansas has countered with its own incentive program, but that offer was contingent on HBC reaching an agreement with its union, which has not happened.