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Pension changes OK’d by union members at Hawker Beechcraft

  • The Wichita Eagle
  • Published Friday, August 24, 2012, at 12:25 p.m.
  • Updated Friday, August 24, 2012, at 1:31 p.m.

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Machinists union members at Hawker Beechcraft overwhelmingly accepted the company’s proposal on changes to their pension plan in a vote Friday morning at Hartman Arena.

Officials said 97 percent of members who voted supported a plan that retains pensions for hourly employees and retirees but freezes future accruals beginning Dec. 31.

The plan also creates a new Retirement Income Savings Plan and retains a 401(k) plan.

Machinists union District 70 and Local Lodge 733 members of the negotiating committee unanimously recommended acceptance of the offer.

“I don’t see we have a choice,” Merle Berghoefer, an employee for 16 years, said before the vote. “It’s that or nothing.”

Berghoefer said he expected the proposal to be accepted, “because of the turmoil that’s going on, the economy and the bankruptcy.”

The union and Hawker Beechcraft have quietly been negotiating terms of their pensions in talks that began shortly after the company filed for Chapter 11 bankruptcy on May 3.

The talks were limited to the pension portion of the existing contract, which expires in 2016.

If accepted, pensions will be frozen at $51 per month per year of service.

The company also said if the plan was accepted, Hawker Beechcraft would maintain its headquarters in Wichita for at least 10 years and honor its commitments to the state of Kansas to employ at least 4,000 people.

Rhonda Schultz, a 22-year employee, said after voting that she expected members would accept the company’s proposal.

“It’s the best offer we’re going to get,” Schultz said.

Charles Thomas, a 17-year employee, said he thinks the proposal is in the employees’ best interest.

“We don’t have many options left,” Thomas said.

He said the company has their best interest at heart.

“They could have just locked the doors,” he said of the bankruptcy.

One union member said he’s glad not to be a salaried employee at Hawker Beechcraft.

The Pension Benefit Guaranty Fund, a federal agency, will take over administration of Hawker Beechcraft’s pension plans for nonunion and salaried workers.

The agency and the company have reached an agreement in principle. The company will ask the court for approval to terminate the plans and for the PBGC to pay the benefits.

With the union’s pension plan, the company will continue to pay benefits. And workers who retire at 62 will continue to receive full benefits under the plan.

That won’t be the case with nonunion and salaried workers, who will now have to wait until age 65 to retire with full benefits.

“All I can say, I think it’s a good deal,” said the member, who did not want to give his name. “I’m just glad I’m not salaried.”

Hawker Beechcraft workers have been worried about the future of their pensions since the bankruptcy was filed in May.

One member said he was relieved that his pension benefits would be retained.

“The bottom line is, we could have lost the pension altogether,” said the member, who did not want to be identified.

The ratification of the offer still requires approval by the bankruptcy court, which union officials said they anticipate.

The changes would also become part of any sale in the event Hawker Beechcraft is sold, said union spokesman Frank Larkin.

The company is in exclusive negotiations with Superior Aircraft Beijing, which is exploring an acquisition of the business, except for the defense business.

The union represents about 3,000 Hawker Beechcraft employees, including 2,000 active employees and 1,000 who have been laid off, Larkin said.

Contact Molly McMillin at 316-269-6708 or mmcmillin@wichitaeagle.com.

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