Hawker Beechcraft Employment In Kan. Declines
WICHITA, Kan. (AP) -- Struggling plane maker Hawker Beechcraft released employment numbers Wednesday that showed its work force in Kansas has fallen below the level required to receive the full amount of incentives from state and local governments.
The Wichita-based aircraft manufacturer — which makes general aviation and military trainers — said it had 3,372 employees in Kansas as of Dec. 31 and is currently trying to fill more than 65 open positions in Wichita. The company employs more than 5,400 people worldwide.
Hawker Beechcraft was granted $45 million worth of incentives in December 2010 based on a commitment to keep 4,000 people employed in Kansas over 10 years. Incentive cash payments are reduced when the workforce falls below 3,600.
"While this places the company slightly below the 3,600 threshold in the original agreement, scenarios such as this were contemplated by the original agreement to protect taxpayers and therefore, this year's payment will be reduced accordingly," the company said in a news release.
The company had been originally scheduled to receive a $5 million annual payment, but instead will receive a prorated payment of roughly $4.2 million because of the lower employment numbers, according to the Kansas Department of Commerce.
"We agree there should be benchmarks tied to any taxpayer incentives and we expect Hawker to make every effort to honor its original jobs commitments," Frank Larkin, spokesman for the Machinists union, said in an email.
Kansas had anxiously awaited the release of the employment numbers after Hawker Beechcraft's decision in October to shed its unprofitable business jet manufacturing as it emerges from bankruptcy protection. The slimmed-down company — which plans to rename itself Beechcraft Corp. — will focus on more profitable turboprop, piston, special mission and military aircraft, as well as its parts, maintenance, repairs and refurbishment business.
Dan Lara, spokesman for the Kansas Department of Commerce, said it sounds like the company is in a good starting position as it emerges from bankruptcy, and that the numbers are not that far off from what had been stipulated in the incentive agreements.
"I don't think we knew what to expect, per se," Lara said in a phone interview from Topeka.
Hawker Beechcraft chairman Bill Boisture said in a news release that the company is committed to being successful in Wichita.
"We worked with state officials to put together a responsible, common sense deal and appreciate the ongoing support we have received from local and state officials," Boisture said. "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."
The company has said it will seek court approval to exit Chapter 11 bankruptcy at a hearing Thursday and expects to emerge in the latter half of February, if the bankruptcy judge approves the plan. It has also secured a commitment for $600 million in financing as it leaves bankruptcy protection.
"They have been through a tough time, and the employees there have obviously undergone a lot," Lara said. "And we are happy for them that they will continue, it sounds, to move forward."