Job losses will trim size of incentives paid to Hawker Beechcraft
01/31/2013 9:12 AM
08/08/2014 10:14 AM
Hawker Beechcraft Corp. will get slightly smaller checks from state and local governments this year because it no longer has as many employees as it did when it was promised $45 million in government grants.
The company promised state and local government officials in 2010 to keep 4,000 employees in Kansas. But as of Dec. 31, the company said it had 3,372 employees.
The company, which declared Chapter 11 bankruptcy in May, will ask a federal judge to approve its bankruptcy plan at a hearing Thursday, allowing it to emerge from bankruptcy in the second half of February. The company reported last week that its creditors overwhelmingly approved the plan.
The company expects to emerge as a smaller, reorganized company called Beechcraft Corp., focusing on its Baron, Bonanza and King Air products and its military and after-market business.
The company struggled financially in the downturn and was wooed by other states to relocate. In 2010, then-Gov. Mark Parkinson negotiated a deal with the company to stay in Wichita and keep 4,000 workers, although the agreement allowed the company to drop to 3,600 jobs before triggering any repercussions.
In return, the state agreed to give Hawker $40 million – $10 million in training grants, a $10 million grant in 2011and $5 million grants each year for the next four years. The city and the county agreed to supply $2.5 million each – $500,000 each per year for five years.
The first two installment payments were made. Now, because of the shortfall in employment, the state, the city and the country are trimming their third yearly installment.
The state will provide $4.2 million instead of the full $5 million. The city and county will each provide $446,500 instead of the full $500,000.
The company said it is looking to fill 65 open jobs.
“Despite several difficult years marked by a global economic recession and the financial restructuring we are on the verge of completing, we have worked hard to attract and retain a highly skilled work force and size the business appropriately for the markets we serve,” Bill Boisture, chairman, said in a statement..
“This company and its people remain committed to being successful in Wichita,” Boisture said. “We have stabilized the company and believe we are well positioned for growth in the future.”
Wichita Mayor Carl Brewer said he wasn’t surprised by the shortfall in employment given the company’s struggles.
“We wanted the company to stay here and to stay open and we didn’t want to put 4,000 people on the street,” he said. “So, I still think it’s a good investment. Although it’s not the 4,000, we have 3,372 people who are still employed.”
A call to Gov. Sam Brownback’s office was not returned.