August 20, 2010

Hawker CEO: Talks are at 'crucial time'

Hawker Beechcraft and the Machinists union officially opened negotiations Thursday with a meeting at Terradyne Country Club in Andover.

Hawker Beechcraft and the Machinists union officially opened negotiations Thursday with a meeting at Terradyne Country Club in Andover.

Both sides said they are entering the talks — which are occurring a year before the contract expires — in a spirit of openness, frankness and respect while acknowledging the seriousness and gravity of the times.

"Thank you for responding to our request to take the time and the effort to open our agreement and examine it at a very crucial time in our company today," Bill Boisture, CEO of Hawker Beechcraft, told union representatives at the opener.

"We're here today because some things significantly outside of Hawker Beechcraft and outside the people at Hawker Beechcraft have changed around our business."

The market for business and general aviation aircraft declined 30 to 40 percent from late 2008.

Tighter credit and political rhetoric that made it unpopular to operate business jets have damaged the industry, Boisture said.

"Unprecedented times call for unprecedented actions," Boisture said.

Tom Buffenbarger, international president of the Machinists union, said the company and union must find a way to keep jobs and the company viable.

"We found it necessary to take a leap of faith," he said.

The union recognizes that the economy and the aviation industry aren't going to turn around anytime soon, Buffenbarger said.

Hawker Beechcraft has told the union, which represents about 2,400 hourly workers in Wichita, that it will move its aircraft production out of Wichita if talks aren't successful, union leaders said previously.

Boisture told The Eagle last month that the company is considering moving work to Louisiana or Mississippi. It's also looking outside of the U.S.

"We've been very clear that portions of our company need to get relocated to lower-cost, more efficient localities and suppliers," Boisture said Thursday.

The company is closing its Salina plant, for example, and moving work to Mexico and to outside suppliers.

The company has a series of decisions to make, Boisture said. Those decisions, including Wichita's future role, will be made over the next six months, he has said.

"We are trying to blend a profitable, sustainable future for Hawker Beechcraft here in Wichita," Boisture said.

Decisions will be made on "what to do, how to do it, who to do it with and what the investment has to be to change the company for the future," he said.

The union can't save jobs by itself, officials say. The state and local communities must pitch in.

"Kansas must wake up," said the Machinists aerospace coordinator Ron Eldridge.

Boisture said the outcome of the talks will affect Hawker Beechcraft's presence in Wichita and how it makes decisions.

But it's too soon to say what will occur.

"Everyone wants to know the last page of the book," he said. "We don't get to write that book here today."

Boisture declined to say how much in cost savings the company is seeking through the negotiations.

But it must cut annual total costs $200 million a year by 2012, he said.

Savings will come through "many fronts," such as lean manufacturing, materials, supply chain, facilities and overhead, Boisture said.

Sources say the company wants pay cuts and for workers to pay more of the cost of health insurance premiums.

While the union is going to work to preserve the industry in Wichita, "we're not going to roll over; we're not going to play dead," Buffenbarger said. The union will work to protect "everybody's interests."

The goal is to keep jobs and people employed, Buffenbarger said.

If that's the outcome of the talks, "we'll consider that a success," he said.

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