Hawker Beechcraft union members to vote Friday on benefits plan

Hawker Beechcraft sign, photographed Wednesday, Sept. 22, 2010.
Hawker Beechcraft sign, photographed Wednesday, Sept. 22, 2010. The Wichita Eagle

Machinists union members at Hawker Beechcraft will vote Friday on whether to accept a company proposal that would prevent the termination of their defined benefit plan, the union said Wednesday.

The change to the existing labor contract would require Hawker Beechcraft to continue funding the plan and keep early retirement options and scheduled benefit increases.

Retirees who are represented by the Machinists union would also continue to receive pension benefits.

If ratified, the proposal also would freeze future accruals for hourly workers effective Dec. 31.

After that, a deferred contribution retirement income saving plan would be added to an existing 401(k) plan.

All other elements of the current collective bargaining agreement, which expires in 2016, would remain unchanged, the union said.

That would include wages, work rules, vacation guidelines, seniority and health care coverage and other items.

Machinists union District 70 and Local 733 bargaining committee members are unanimously recommending acceptance of the proposal, union officials said.

The International Association of Machinists and Aerospace Workers represents more than 3,500 hourly employees at Hawker Beechcraft.

The company and the union have been in talks since shortly after the company filed for Chapter 11 bankruptcy on May 3.

The negotiations have been limited to the pension portion of the existing labor contract, said IAM spokesman Frank Larkin.

If the proposal is rejected “it’s likely that the company would proceed to distress terminations (of the defined benefit pension plans),” Larkin said.

Hawker employees have been concerned about the future of their pension plans since the company filed for restructuring.

The current proposal by the company is a significant improvement over earlier proposals, which had included the complete termination of the pension plan, Machinists aerospace coordinator Ron Eldridge said in a statement.

“Preserving a defined benefit pension plan at a company in the midst of bankruptcy reorganization is the best possible outcome under extremely difficult circumstances,” Eldridge said.

It’s the best outcome for current hourly employees and retirees represented under the contract, Larkin said.

“It’s not unusual for a company going through restructuring or a bankruptcy to propose significant changes to a collective bargaining agreement up to and including abrogation,” Larkin said.

The changes also would become part of a sale transaction in the event of a sale of Hawker Beechcraft, he said.

The company is in exclusive negotiations with Superior Aircraft Beijing, which is exploring the acquisition of the business, except for its military business.

If members ratify the proposal, the change would require approval by the bankruptcy judge.

“It’s expected that the judge would approve something this important that was agreed to by all sides,” Larkin said.

Union members will vote Friday at the Hartman Arena, 8151 N. Hartman Arena Drive in Park City.

Doors will open at 8 a.m., with an informational meeting and voting to begin soon after, according to the union. Polls will close at 11 a.m.

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