Union Challenges Hawker Beechcraft Sale

 - August 1, 2012, 5:33 AM

The International Association of Machinists and Aerospace Workers (IAM) filed papers with U.S. Bankruptcy Court on July 16, challenging the proposed sale of Hawker Beechcraft to Superior Aviation Beijing.

“The proposed sale of Hawker Beechcraft to a Chinese government-backed entity has broad implications for the U.S. economy and national security,” said IAM International president Tom Buffenbarger. “The sale should not be rushed through without adequate scrutiny by all interested parties, including federal regulators, state officials and the Wichita community.”

IAM Aerospace coordinator Ron Eldridge took up the cause of the union membership at the Wichita-based OEM, which numbers some 3,500. Saying that the proposed sale also requires the termination of all three of Hawker’s defined-benefit pension plans, he added, “The prospect of lost pension benefits for Hawker’s workers while China’s aerospace industry benefits from the transfer of valuable U.S. technology is simply outrageous.”

“In our experience,” said Buffenbarger in an interview with AIN, “Chinese bounty hunters comb the world looking for buys, [then they] take the technology back to China and close the business.”

In response, Superior Aviation CEO Tim Archer said in a written statement the following day, “We will aggressively work to keep jobs in the United States by continued production of the Hawker and Beechcraft product lines and expanding the production, design and servicing of civilian aircraft in locations all across America.”

Hawker Beechcraft for its part denies the union allegations. In a written statement, the company said, “The agreement we have reached with Superior allows us to preserve jobs as the negotiation and restructuring process progresses.

“Furthermore, our negotiating agreement with Superior has no impact on the timing of regulatory agencies’ reviews [and] any definitive agreement reached with Superior would be subject to approval by the Committee On Foreign Investment in the United States and other regulatory agencies, as well as a further competitive auction process overseen by the U.S. Bankruptcy Court.”

In announcing the “exclusivity agreement” with Superior on July 9, HBC chairman Bill Boisture said the decision to move forward with Superior’s offer was based on two key factors. He noted specifically that the plan “offered the most continuity for our business, allowing us to preserve jobs, product lines and our ability to maintain our commitments to our customers.”

The filing by HBC also emphasized that Hawker Beechcraft Defense Company (HBDC) is not part of the proposed transaction and neither ownership nor control of HBDC will transfer to Superior. The sole connection is that in the event HBDC is sold, up to $400 million of the $1.79 billion purchase price will be refundable to Superior.

Among other assets, HBDC includes the AT-6 trainer line and what remains of the JPATS (joint primary aircraft training system) contract, special-mission versions of the King Air twin turboprop, and most recently a competition for the U.S. Air Force light air support (LAS) contract. The initial LAS contract is for 20 airplanes (and options for another 15) valued at approximately $355 million. Over time the value of the contract might grow to as much as $1 billion.

Buffenbarger told AIN that he sat down with Hawker Beechcraft during the Farnborough International airshow last month and concluded that “[it does not seem to be willing to stand behind what was in the filing.

“So far, we have a lot of questions and no real answers,” he said. “And until we know our members are being protected and their best interests taken into consideration, we will continue to fight the sale.”