Hawker CEO focuses on improving business

10/15/2009 12:00 AM

08/08/2014 9:54 AM

When Bill Boisture joined Hawker Beechcraft in March, his priority was to stabilize the company.

Now, the CEO's focus is on improving the way it does business and bringing down costs, Boisture said.

Hawker Beechcraft is reviewing a number of areas — its supply chain, procedures, training and its relationship with the Machinists union — Boisture said in an interview before the start of the National Business Aviation Association's annual convention in Orlando, Fla.

Once demand for business jets returns, Hawker Beechcraft will likely have a different "footprint."

For one thing, it plans to consolidate and close some facilities. That could include closing its Salina plant and moving the work to Wichita.

"That's very likely," Boisture said.

Hawker Beechcraft employs 241 people in Salina, down from about 500 a year ago. The plant builds wings, spar assemblies and other subassemblies.

No date for a closure has been set, officials say. The company is developing a timeline.

Salina and other topics are part of an ongoing discussion leaders are having with the Machinists union.

"We said to them, 'Look, the things that are in our future is that we would consolidate facilities generally and close some, meaning fewer pieces of real estate, that we would outsource non-core tasks and that we would, to the extent practical, seek lower labor cost markets,' " Boisture said.

The company respects its relationship with the union and the employees it represents, he said.

"They're concerned about the future," he said. "They deserve to be in the conversation."

Boisture's biggest worry revolves around costs.

Specifically, he's concerned with what the total costs for the company will be for it to be "survivable in the downturn and competitive in the upturn."

Those include the costs of development, labor and materials and "how will all of that blend together to support a great product line that represents a livelihood for a great amount of people. How do we do that?" he said.

Hawker Beechcraft must be cost competitive at lower sales volumes and able to compete with a new rival, Brazil-based Embraer.

Boisture calls Wichita a "center of excellence," that produces high-quality end products.

Wichita's core tasks are final assembly, preparation for delivery and the technical development of the product line.

Outside of that?

"It's all up for question," Boisture said. "It has to be in this situation."

That said, Boisture said he's optimistic about Wichita's future.

"There's so much experience and talent in this work force," he said.

It's been a tough few months.

Since November, Hawker Beechcraft has cut more than 3,600 jobs.

It's too soon to say how many planes the company will deliver this year.

"We have to assess the fourth quarter," he said. "That will really tell us (if) we stay the size we are or (if) we have to get smaller."

The company is preparing for fewer deliveries next year than in 2009, he said. And by the end of 2010, deliveries are expected to be down 40 to 50 percent from 2008, he said.

This downturn is worse than the one following the terrorist attacks of Sept. 11, 2001, he said.

"You didn't have a huge reset in the credit markets; you didn't have the huge economic upheaval," he said.

Aircraft sales have also been hurt by a political environment that has made it unpopular to buy business jets, he said.

That has had a detrimental effect on sales and unintended consequences on thousands of aircraft jobs, he said.

In the meantime, Hawker Beechcraft has taken difficult actions to help itself, he said.

"We pay our bills on time, we have liquidity, we have two very strong owners (Onex and GS Capital Partners) who are committed to this investment," Boisture said. "It's not their first rodeo in aerospace. They've been through cycles before."

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