Document: $22.2 million to close Hawker Plants I and II

Hawker Beechcraft (October 18, 2010)
Hawker Beechcraft (October 18, 2010) The Wichita Eagle

The cost to vacate more than 1 million square feet of space and close Hawker Beechcraft's Plants I and II could total as much $22.2 million, the company said in a document obtained by The Eagle.

Costs could run from $13 million to $20 million to exit Plant I, depending on the options selected, according to preliminary estimates in the document. That would pay for costs, among other things, to make infrastructure and utility modifications needed.

Exiting Plant II is estimated to cost $2.2 million.

About 1,300 of the company's 6,000 employees work at the two plants, the document says.

Hawker Beechcraft declined to comment about the plans.

The document, dated Nov. 18 and titled "Challenge Project: Steering Committee Review," gives more detail into the scope of the company's October announcement that it plans to close the plants and move the work to outside suppliers and to Mexico, as well as move King Air-related back shop operations and electrical and upholstery work outside the plant.

The moves will eliminate 800 union jobs, the company has said. The changes are expected to be completed by August.

The company has been revamping its business as it cuts costs and deals with the economic downturn that began in 2008.

Hawker Beechcraft has received an offer from Louisiana to move some or all of its operations there.

Hawker Beechcraft CEO Bill Boisture told employees Thursday in a quarterly all-hands meetings that decisions regarding the company's future footprint in Wichita will be made by the end of March.

The company is operating under a plan called "Project Challenge," which changes the physical footprint of the company, changes supply chain relationships and transforms processes, Boisture has said.

"We've been obvious about our efforts to find the right place for the future of Hawker Beechcraft," Boisture said last month.

The move

The document outlines scenarios for moving work and people, although it does not say whether decisions have been made. It also does not make any mention of Louisiana.

In the "Bison" project, parts manufacturing in Plant I is moving to outside suppliers and to Mexico, the document said.

Other functions performed at Plant I — a 40-acre complex — will move to other locations at Hawker Beechcraft's Wichita site.

The document also proposes moving experimental fabrication to Plant III and manufacturing technology to Plants III and IV, while the employees club, the Hangar store, first aid, the fire department and security would move to a variety of locations at the Wichita site, it said.

Assembly of the Baron and Bonanza aircraft would move from Plant II's 20-acre site to Hawker Beechcraft's plant in Mexico. Final assembly, meanwhile, would move into Plant IV in Wichita, the document said.

Accounts payable and import/export functions must also be moved out of Plant II to other locations on site, it said.

Moving the 500 to 600 employees who work in engineering, quality assurance and manufacturing technology in Plant I "could pose significant cost," the document said.

The workers will need 100,000 square feet of office space. The document lists a variety of options of sites on the Wichita campus.

It's not yet known what will happen to the vacated buildings. But Boisture said last month that the company has received interest from developers.

The document lists a variety of options for the buildings.

Plans for Plant I could include emptying the building but leaving information technology and security there, leasing the building but leaving information and technology in it, selling the building and severing all ties with the rest of Hawker Beechcraft's operations, or demolishing the building.

NIAR facilities

One operation that isn't moving is the National Institute for Aviation Research's Aircraft Environment Research and Testing Laboratory.

Wichita State University's NIAR took over Hawker Beechcraft's electromagnetic compatibility, mechanical and environmental test laboratory in April.

The building was considered part of Plant I. Recently, its power and gas lines were changed to be metered separately. That allows the facility to stand on its own.

It would not be included should the company sell Plants I and II, said John Tomblin, NIAR's executive director.

NIAR will continue to lease the facility from Hawker Beechcraft, he said.

"I'm there for the foreseeable future," Tomblin said.

NIAR is remodeling the facility at a cost of about $300,000, he said.

King Air fuselage

The first lower fuselage section for Hawker Beechcraft's King Air arrived in Wichita from Mexico last month — the first assembly of its size and complexity to be completed at the company's plant in Chihuahua, the Nov. 18 document said.

It's part of the "Labrador" project, it said.

It arrived in Wichita with "zero major issues noted," although there are "some small items to repair," according to the document.

It also refers to the company's "fuselage shell initiative" in Plant III. Hawker Beechcraft winds composite fuselage barrels for business jets.

The company is making progress on improving quality, reducing the amount of work in progress and the time it takes to complete a fuselage.

Those improvements have translated into "big savings," the document said.

It's also adding two fiber placement machines at the end of 2011.

Historically, the quality has not been up to engineering standards, equipment has needed attention and inventory of fuselage barrels have been built months ahead of time.

"When in doubt, build more," one of the pages in the document said.

Because of the inventory build-up, workers in the composite fuselage area have put in a combined 8,000 furlough hours this year, the document said.

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