Some things are simply unthinkable, such as the city of Wichita without Hawker Beechcraft. But according to Machinists District 70, which represents some 2,400 hourly workers at the OEM’s Wichita plant, that’s what the company is considering.
On July 14, the union claimed in a letter to its members that a move from Wichita, which the business aircraft manufacturer has called home for 78 years, is among Hawker’s options. According to union district 70 president Steve Rooney, such an exodus could shrink Hawker’s total hourly work force by as much as 75
percent within the next two years, “without guarantee of even the last few jobs remaining.”
Nor did the letter leave much doubt as to where Rooney thinks Hawker might send those jobs. “We shouldn’t forget a few years ago,” he wrote, “the company decided to send the wire harness work to Mexico.”
In October 2007 Hawker opened a manufacturing facility in Chihuahua, Mexico, in what the company said was an effort to maintain a “competitive position in the world market and develop a reliable supply base to support the current and future needs of its Wichita family.”
Nor has the union forgotten that as recently as February this year, Hawker announced that more than 250 high-skill, high-paying jobs would be eliminated when it closed the factory in Salina, Kan. A company spokesman at that time confirmed that half of those jobs would go to a facility in Mexico and half to outside vendors.
But Hawker Beechcraft’s most recent troubles began long before last year, when the U.S. tumbled into a recession and business jet orders industry-wide dropped precipitously and order cancellations killed the healthy glow of a formerly rosy backlog.
As early as November 2008, the company announced the start of layoffs that would affect some 500 workers, and things have not improved appreciably in the months that followed; in the first quarter of this year, Hawker recorded a net loss of $63.4 million.
The only response by Hawker to the union letter was this brief statement: “Last September the company initiated a series of meetings to update the union leadership about serious challenges it faces during these unprecedented economic times. These conversations have included a spectrum of possibilities for the company’s future footprint and the likely impact on its work force in all its locations. The company values this partnership and believes that there is a great opportunity available to us to work together to influence a positive outcome.”
Adding fuel to the fire, an unidentified analyst writing for Gerson Lehrman Group suggested on July 9 that Hawker Beechcraft parent company Onex & GS [Goldman Sachs] Capital Partners “should turn its attention to selling the company by parting it out instead of attempting to rehabilitate its dwindling market position.”
“In our world today,” said union spokesman Bob Wood in the Dallas regional office, “it’s not a stretch to imagine the company being cut up and sold; it’s what [holding] companies do.”
However, the union has its own agenda, in particular negotiations on a new contract that are currently stalled. Rooney said the union “is not opening contract negotiations with the company at this time [and has] made an extensive information request from Hawker to understand the situation regarding jobs at the plant.”
The union would like to work out a long-term contract based on a commitment by Hawker Beechcraft to remain in Wichita.
And while things look grim, Wood noted, “There is always hope. The union will do everything it can, and we’ve done some pretty innovative stuff in the past.”