Aviation News

August 4, 2012

Hawker Beechcraft to Layoff 170 Arkansas Workers

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By: BNO News
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Hawker Aircraft Services at Little Rock Airport. (Photo by Hawker Beechcraft)
Hawker Aircraft Services at Little Rock Airport. (Photo by Hawker Beechcraft)
Aircraft manufacturer Hawker Beechcraft on Thursday said it plans to cut 170 jobs at its completion center in Arkansas, coming just weeks after the company entered into negotiations to sell its business jet and general aviation operations to a Chinese firm.

CEO Steve Miller and Chairman Bill Boisture announced the layoffs in a letter sent to employees on Thursday, calling it an “unprecedented time” for the aircraft manufacturer. They said the layoffs will impact approximately 170 employees across multiple levels and functions, both hourly and salaried workers, throughout its facilities in Little Rock.

“As we have communicated with you previously, the company continues to evaluate and balance production rates throughout a difficult and changing environment,” the letter said. “Over the last several months, we have worked to appropriately size our business, primarily in Wichita. Today, we are faced with additional challenging decisions that involve further re-sizing our work force.”

The completion center in Little Rock, which performs repairs and maintenance but also puts the final touch on planes before they are delivered to customers, currently employs about 450 people. Thursday’s letter said the 170 affected workers have been given a 60-day Worker Adjustment and Retraining Notification (WARN), as is required by federal law.

Hawker Beechcraft, which has suffered from a decline in the demand for business jets due to the global financial crisis, voluntary filed for Chapter 11 bankruptcy in early May. Its senior secured lenders and bondholders also agreed to a financial restructuring plan which aims to eliminate approximately $2.5 billion in debt and approximately $125 million of annual cash interest expense.

The aircraft manufacturer also entered talks last month to sell its business jet and general aviation operations to Chinese firm Superior Aviation Beijing for approximately $1.8 billion. Such a sale would give Hawker Beechcraft greater access to the Chinese aviation marketplace, which is expected to grow considerably during the next few decades.

Hawker Beechcraft Defense Company (HBDC) would be excluded from any deal with the Chinese firm and remain a separate entity. But any definitive agreement reached during the exclusive negotiations, which are expected to last until the end of this month, would have to be approved by the Committee on Foreign Investment in the United States (CFIUS) and other regulatory agencies.