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Saturday, April 19, 2014

Hawker considers other locations in U.S., abroad

BY MOLLY MCMILLIN
The Wichita Eagle

Hawker Beechcraft is considering moving work out of Wichita and opening a facility in Mississippi or Louisiana, the company's CEO said Tuesday.

No decisions have been made regarding an alternate U.S. location, Hawker Beechcraft CEO Bill Boisture said. He said a series of decisions — including Wichita's future role — will be made over the next six months.

He also said in a letter to employees later Tuesday that the company was exploring options outside the United States.

Hawker Beechcraft began looking at 10 locations a few months ago "that might be suitable for developing facilities for parts of our business," Boisture said from the Farnborough International Airshow, where his company is exhibiting its military aircraft. Since then, the company has narrowed its domestic choices to Louisiana and Mississippi, he said.

The company is looking for ways to cut costs during the current economic downturn, which has greatly reduced demand for business aircraft.

Boisture declined to say what the scope and size of any facility outside Wichita would be.

Hawker Beechcraft employs about 7,000 people, including 6,000 in Wichita.

Boisture said a report about Hawker Beechcraft on a Mississippi television station's website was not accurate.

The report said Lowndes County, Miss., lost the competition to Baton Rouge, La., for a "major Beechcraft aircraft deal and 1,500 jobs." It also said that "much of its manufacturing and research" would move from Wichita to Baton Rouge.

A spokeswoman for the region's economic development arm, Columbus Lowndes Development, said the group "couldn't comment on an ongoing project."

"The market for our products has decreased dramatically over the last 18 months," Boisture said from England. "Our view is that this is not a momentary decrease, and we believe strongly it's necessary to adjust the cost structure of the company to be able to be profitable in a small market."

Decisions must be made on a number of issues regarding the future size and footprint of the business, Boisture said. Hawker Beechcraft closed its Salina plant this year and is sending the work to Mexico and to outside suppliers.

"We are reshaping this company carefully to fit the market that we see in the near and mid-term," he said.

Mayor wants to keep growth in Wichita

Mayor Carl Brewer learned about Hawker Beechcraft's search during a break in Tuesday's City Council meeting when an Eagle reporter showed him the story on Kansas.com.

He said that he and City Manager Robert Layton have set a meeting with the company to see what the city can do to retain the company's activities and future growth in Wichita. That meeting was set in response to earlier reports in The Eagle that the company was exploring opportunities elsewhere.

"We don't want them leaving, we don't want them decreasing or farming out work," said Brewer, who worked at Spirit AeroSystems until he became mayor in 2007. "All our aviation companies are important to us."

The Kansas Department of Commerce will monitor the situation, said spokesman Joe Monaco.

"We have a long history and strong working relationship with Hawker Beechcraft, and we certainly recognize how important they are to Wichita and our renowned aviation cluster," Monaco said. "If approached by the company, we'll obviously do whatever we can to help them grow here in Kansas."

Meetings with union

Union and company leaders have been meeting for several months about the future of Hawker Beechcraft's Wichita facility and the challenges it faces.

Machinists union officials said last week that the company was considering moving work out of Wichita that could shrink its hourly work force 50 to 75 percent over the next two years. The union represents about 2,400 hourly workers in Wichita.

Hawker Beechcraft is seeking a long-term contract with the union, Machinists District 70 president Steve Rooney said last week. But the union isn't opening negotiations with the company at this time.

Boisture sent a letter to employees on Tuesday. In it, he said the company must adjust its cost structure to remain competitive in unprecedented economic times.

"To make these adjustments, the company is developing a spectrum of possibilities for the size and function of our business in all our locations," Boisture wrote.

The development of those possibilities includes exploring other locations inside and outside the U.S. that might be suitable for parts of its business.

"We have narrowed the possibilities over the last several months," he said in the letter.

"I want to confirm to you that no decisions have been made at this time regarding an alternate U.S. location," he wrote.

In the first quarter of 2010, the company recorded a net loss of $63.4 million. It cut 2,700 jobs in Wichita last year and cut or issued layoff notices to 375 Wichita workers this year.

Contributing: Brent Wistrom and Bill Wilson of the Eagle Reach Molly McMillin at 316-269-6708 or mmcmillin@wichitaeagle.com.

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