A group of Eclipse 500 owners and Hawker Beechcraft (HBC) today announced the signing of a non-binding letter of intent under which HBC’s service network would provide maintenance and upgrades for Eclipse Owners Group (EOG) members. The two parties are now negotiating a “definitive binding agreement,” according to an EOG statement.
In December last year, aircraft manufacturer Gulfstream Aerospace laid off “a number of contract employees” and advised that at the end of the first quarter 2009 it would consider the possibility of full-time employee layoffs. Two months into this year, parent company General Dynamics announced a reduction in force that comprises 1,200 workers, including approximately 600 contract personnel.
Hawker Beechcraft (HBC) tapped industry veteran Bill Boisture Jr. as its new chairman and CEO. He succeeds Jim Schuster, who announced his pending retirement in November after eight years at the helm of the Wichita-based aircraft manufacturer. Boisture’s high-profile business aviation career includes turns as president of fractional provider NetJets and aircraft manufacturers Gulfstream and Hawker predecessor British Aerospace Corporate Jets.
Hawker Beechcraft yesterday tapped industry veteran Bill Boisture Jr. as its new chairman and CEO. He succeeds Jim Schuster, who announced his pending retirement in November after eight years at the helm of the Wichita-based aircraft manufacturer.
For the first time in five years, worldwide shipments of general aviation airplanes decreased in 2008, even as industry billings reached $24.8 billion, a 13.4-percent gain over 2007.
The General Aviation Manufacturers Association (GAMA) attributed the increase to order backlog, reflecting the filling of orders placed for turboprops and business jets during the strong economic years of 2006 and 2007.
Hawker Beechcraft reported net sales of $3.5 billion and operating income of $135.5 million last year, though it also posted a net after-tax loss of $139.9 million. Net bookings for the year were $4.8 billion and year-end backlog was $7.6 billion.
Just weeks after warning that pending job cuts “could very well touch all areas and levels of the company,” Hawker Beechcraft CEO Jim Schuster today put a number to how many of his 9,300 employees will be let go–about 2,300, or nearly 25 percent of the company’s workforce. Most of the affected employees will be given their 60-day notices on Friday, just 91 days since 490 people were let go by Hawker Beechcraft.
Among other measures, manufacturers are increasingly looking to layoffs for
cost-cutting as demand dwindles and aircraft production rates drop. Analysts and industry observers look for things to get worse before they get better.
NBAA is fighting to eliminate from a bill to reform the Troubled Assets Relief Program (TARP) wording that would “require divestment of private aircraft or leases.” TARP was passed by Congress in October to acquire banks’ troubled assets in an effort to unfreeze the credit market. The proposal regarding business airplanes was introduced on Friday by Rep. Barney Frank (D-Mass.), the chairman of the House Financial Services Committee.
Six months ago, business aircraft manufacturers were publicly confident that their backlog of new aircraft orders stretching well into the next decade would provide a buffer to ease the industry through what was already flagged as an economic crisis. Today, cancellations and delivery deferrals are eating
into those backlogs, and the OEMs are making adjustments that were only being hinted at two months ago.