Hawker Beechcraft has accepted an incentive package from the state that will keep the "vast majority of jobs" in Wichita, Gov. Mark Parkinson announced Tuesday.
The agreement is contingent upon the company and the Machinists union agreeing to a new long-term labor contract.
"I am pleased to announce that we have an agreement in principle among the three parties — the state, the union and Hawker Beechcraft — that could secure Hawker Beechcraft's future presence in Wichita," Parkinson said after a two-hour meeting among the three parties in Topeka.
Hawker Beechcraft has been grappling with a downturn in the market for business jets. As part of its effort to reduce costs, it has looked at alternative locations to place work. The company and the union have also reopened contract negotiations a year early.
But it appears Tuesday's deal will thwart attempts by Louisiana to lure Hawker Beechcraft to Baton Rouge. Sources have said Louisiana has offered $400 million for the company to move there.
"This is a long-term solution," Parkinson said. "The state of Kansas is not interested in a temporary solution to this challenge."
Terms of the deal won't be released until after the company and union reach a labor agreement.
Parkinson said he didn't want to jeopardize the possibility of Hawker Beechcraft staying in Wichita by releasing information early.
He did say that the state's package will include incentives for product development, work force training and tuition reimbursement for Hawker Beechcraft and its Wichita employees.
It's an offer that makes sense to both parties, Parkinson said.
Hawker Beechcraft CEO Bill Boisture thanked the governor and his staff for working with the company and providing a package that can provide stability to Hawker Beechcraft.
"And we are hopeful about reinitiating negotiations," Boisture said.
The union and the company will resume contract negotiations as soon as possible, said Rich Michalski, Machinists union international general vice president.
Talks broke off Friday until after the parties could meet with Parkinson. The union also delayed a vote on a final agreement, which had been scheduled for Saturday.
"We will get back to the bargaining table and work hard towards a long-term agreement that will benefit both our members and the company," Michalski said.
In an interview with The Eagle Tuesday morning, Boisture said he requested the meeting with Parkinson so the company could understand what was possible for it to stay here.
"We have a responsibility on behalf of the people of Kansas and the people that work here to understand what is possible," Boisture said.
The company's annual payroll is about $357.1 million, according to Wichita State University's Center for Economic Development and Business Research.
"Oh, my goodness," said Rich Norrod,a sheet metal assembler who has worked at the company for 13 years. "I'm super happy with the way it took less than a day to make this all happen. I wish they could have done this sooner."
Team leader Paul Bushell,who has been with the company for 34 years, is one of about 6,000 Hawker Beechcraft employees in Wichita. He said he was overjoyed with the news.
"But we still have another step to go," Bushell said. "Everybody understands what the future is."
Parkinson said that the state's agreement with the Hawker Beechcraft would include a guarantee similar to one forged with Bombardier Learjet in July, Parkinson said.
The state offered Bombardier Learjet $27 million in bond financing in exchange for keeping assembly of its new Learjet 85 business jet in Wichita.
In addition, Bombardier agreed not to move any existing operations out of Wichita during the life of the bonds. Learjet 85 production will support 600 jobs, including 300 new positions.
The bond financing to Learjet will be repaid from the employees' income taxes that would have otherwise gone into the state's general fund.
Mayor Carl Brewer said Tuesday's news is good for Wichita.
"This is exciting," Brewer said. "Now they just have to work out the other issues."