Hawker Beechcraft to remain in Wichita ‘air capital’

 - January 31, 2011, 9:15 AM

Hawker Beechcraft and the State of Kansas announced a formal agreement on December 21 for the airframer to remain in Wichita for the next decade.

The $40 million incentive dealmarks “a key point in the future of Hawker Beechcraft,” according to OEM chairman and CEO Bill Boisture. Hawker describes the agreement as “significant incentive for the company to maintain its presence in Wichita over the next 10 years.”

Boisture added that with acceptance of the agreement, “we are committing to be successful as a Wichita, Kansas- and U.S.-based private company and preserving a valued American industry in tomorrow’s aviation markets.”

The state’s incentive package does not include a 100-percent commitment by Hawker to Wichita, but does require the manufacturer to maintain its current production lines and retain at least 4,000 jobs over the next 10 years.

The incentive package includes $10 million over three years for tuition reimbursement and training as part of State of Kansas Investments in Lifelong Learning (Skill). The Skill funds may be used for employees attending the National Aviation Training Center, Wichita State University or any of the other Kansas Regents institutions.

Hawker Beechcraft will also receive $10 million in the first year, followed by $5 million each year for the next four years, as part of the Major Project Investment portion of the Impact program. MPI funds may be used for other expenses related to the projects, such as the purchase or relocation of equipment, product development, labor recruitment or building costs.

The City of Wichita and Sedgwick County have also agreed in principle to provide $2.5 million each over the course of five years.

“As the general aviation industry continues to recover from the economic recession, this agreement is a great victory for our state as it stabilizes Hawker Beechcraft’s long-term presence in Wichita and provides some security to thousands of employees in uncertain times,” said Kansas Governor Mark Parkinson.

The incentive package was originally presented as contingent on the successful conclusion of a new, long-term labor agreement between Hawker and its machinists union employees.

In an effort to reach a new contract, Hawker and the Machinists Union (IAMAW) Local 70 had been in negotiations through much of the fall of last year. The negotiations came to a halt in October when union negotiators presented a contract offering by Hawker to their members, recommending approval. The membership voted against the contract, and as the current contract remains in effect until August, a strike vote was not authorized. At that point, it was unclear whether the incentive package would remain valid.

Meanwhile, Hawker is moving ahead with a number of programs, among them the Hawker 400XPr. The company has acquired its first test aircraft and initiated design engineering on the $2.24 million “high-performance upgrade of the Hawker 400XP/Beechjet 400A series.”

Also a go is the Hawker 800XPr upgrade, which is in the final phase of winglet installation at the Chester, England facility. The 800XPr will also get an engine upgrade with Honeywell TFE731-50R turbofans. With the winglets and new engines, the 800XPr is expected to feature greater range, better time to climb and higher cruise speeds.

Both the 400XPr and the 800XPr upgrade packages will be available exclusively through Hawker Beechcraft’s factory-owned service centers.