Hawker Beechcraft will maintain its headquarters for civilian aircraft in Wichita for at least 10 years and honor its commitment to the state of Kansas to employ 4,000 people as part of its proposal with its Machinists union.
Machinists union members will vote Friday morning on whether to accept the proposal, which retains their defined benefit plan but freezes future accruals beginning Dec. 31 for hourly employees and retirees.
The proposal creates a new Retirement Income Savings Plan, with contributions ranging from 3 percent to 6 percent, depending on age and years of service. It retains the current 401(k) plan.
If ratified, the change will give the company flexibility to continue to provide jobs for up to 900 hourly workers on the business jet production lines and for about 1,500 Machinists jobs overall, the union said in a summary of the proposal.
Hawker Beechcraft and the union have been quietly negotiating terms of their pensions in talks that began shortly after the company filed for Chapter 11 bankruptcy on May 3.
Machinists union District 70 and Local Lodge 733 members of the negotiating committee are unanimously recommending acceptance.
If ratified, the change in the contract will still require approval by the bankruptcy judge, which is expected.
The union represents 3,500 workers – including many who have been laid off – at Hawker Beechcraft.
Union members vote at Hartman Arena at 8151 N. Hartman Arena Drive in Park City.
The doors open at 8 a.m., with an informational meeting beginning at 9 a.m. Polls will close at 11 a.m.
Machinists union attorneys will be available to answer questions, the union said.
Union members are being excused with pay to vote.
Employees and retirees have been concerned about the future of their pension plans since the company filed for bankruptcy.
Negotiations between the Machinists and the company have been limited to the pension portion of the union’s existing labor contract, which expires in 2016.
The remainder of the collective bargaining agreement remains unchanged.
Bargaining unit employees will continue to be able to retire at age 62 with 100 percent retirement.
If the proposal is ratified, pensions will be frozen at the current rate of $51 per month per year of service.
If rejected, it’s likely the company would proceed to distress terminations of the defined benefit pension plans, Machinists union spokesman Frank Larkin said this week.
The changes would become part of any sale transaction in the event Hawker Beechcraft is sold, Larkin said.
The company is in exclusive negotiations with Superior Aircraft Beijing, which is exploring the acquisition of the business, except for the defense business.