Machinists’ deal called final step in merging Beechcraft and Cessna

When Machinists union members approved a new, unified contract with Textron Aviation on Friday, the integration of Beechcraft and Cessna Aircraft was essentially finished.

“The last item we had to wrap up was the union negotiations,” Textron Aviation CEO Scott Ernest said in an interview after the company’s news conference at the National Business Aviation Association’s annual convention. “It was a great outcome.”

Now Machinists who work at Cessna and at Beechcraft work under a single contract. They previously had separate, disparate agreements.

Textron, Cessna’s parent company, bought Beechcraft in March and formed Textron Aviation.

The unified labor agreement allows the company to commit to growing in Wichita, Jim Walters, Textron Aviation senior vice president for human resources and communication, said in an interview at the company’s exhibit at the Orange County Convention Center.

It provides a mechanism to shift production workers working on Beechcraft products to Citation lines and vice versa, he said.

In the short term, that may mitigate layoffs at Beechcraft.

The company had been looking at laying off hundreds of Beechcraft employees as it reduces production.

On the other hand, Cessna is ramping up the Citation Latitude business jet program and needs to staff the production line.

Now that the new contract is in place, the company will “pause and stand back,” and assess the situation, Walters said.

It’s about putting the right resources in the right places, Ernest added.

In addition, Textron Aviation plans to bring some work that had previously been outsourced at Beechcraft back in-house, he said.

“We celebrate the negotiations and the fact that we have a good long-term agreement that will allow us to invest in Wichita,” Ernest said.

The six-year contract took effect on Friday.

Machinists union members approved the contract with 73 percent of those voting favoring the deal.

The union represents 2,494 hourly workers at Cessna and 1,627 workers at Beechcraft.

The integration of Beechcraft has gone well, Ernest said.

“We jumped right in,” he said. “In six months, we accomplished a lot.”

Sometimes mergers of companies take time to bring cultures together. That’s not been the case.

For one, the two facilities are within a few miles of one another. In some cases, members of the same family work at each company.

“The husband works here; the wife works there,” Ernest said.

Building products, taking care of customers and investing in the future are the merged company’s main goals.

Growing the brands

Textron officials say the acquisition has worked to promote both the Cessna and the Beechcraft brands.

When Ernest is out talking to Beechcraft customers, he may be talking about a Hawker Beechcraft-built jet.

“Then all of a sudden, we’re talking about the (Citation) X and the Sovereign,” Ernest said. “We’ll see some benefit from that.”

Still, the company will protect and keep its Cessna, Beechcraft and Hawker brands.

“The brands are strong,” Ernest said. “Brands mean a lot.”

Textron Aviation will also be able to invest not only in Cessna products, but in the Beechcraft products as well, something the financially strapped Beechcraft found difficult.

“It’s wasn’t Beechcraft’s fault,” Ernest said. “They were strapped in the situation they were in.”

Beechcraft brought an array of products to the combined company, he said.

It’s now actively trying to sell the AT-6, the attack version of the T-6 military trainer.

Several parties are interested, he said.

The company as also received good feedback for the Scorpion military jet, a Cessna product that is in flight test.

“Everybody keeps asking, ‘When are you going to sell one?’” Ernest said.

He thinks that will happen yet this year.

No decisions have been made on where the Scorpion will be built once it gets into full-rate production.

The company will see how things develop with overseas customers.

“They might want to build part of it,” he said.

But, he added, “you could do it here,” Ernest said.

Textron Aviation acquired composite technologies when it bought Beechcraft.

There are five autoclaves for composites in Plant 3, for example, he said.

Improving market

When it comes the market, it’s starting to feel better, Ernest said. That started last year.

“I’m not going to jump on the table and say, ‘We’re done,’” he said. But it’s looking better.

More people have stepped into the market.

For one, the used jet inventory has decreased and pricing has finally firmed up, he said.

“If I have a good (used) plane, it’s gone,” Ernest said. “I can’t hold onto it.”

Ernest is pleased with the company’s line-up of products, and he thinks they offer customers plenty of reasons to buy new aircraft.

“We’re positive on what we have coming into the pipeline,” he said. “We plan on being very competitive. That’s just a given.”

This story was originally published October 20, 2014 at 4:15 PM with the headline "Machinists’ deal called final step in merging Beechcraft and Cessna."