Hawker Beechcraft offer seeks pay cut to keep jobs

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Associated Press

Posted on October 13, 2010 at 6:02 PM

Updated Wednesday, Oct 13 at 6:02 PM

WICHITA, Kan. (AP) — It was only two years ago that striking machinists at Hawker Beechcraft accepted a hard-fought, three-year labor contract after nearly a month on the picket lines.

But that was before a global economic downturn that devastated the aircraft manufacturing industry. And before Louisiana reportedly offered the debt-ridden aircraft maker millions in incentives to lure its 6,000 jobs to Baton Rouge.

On Saturday, machinists will vote on a new seven-year contract offer that includes a 10 percent pay cut and other labor concessions. The contract requires a simple majority for approval and there is no strike vote.

"This is do or die, if it is turned down the company says they are going to move it," said union spokesman Bob Wood.

People in this city, which calls itself the 'Air Capital of the World," were stunned this summer at the possibility of losing to Louisiana the company founded here by early aviation pioneer Walter Beech. The "New Louisiana Purchase" screamed one headline on a union flyer. Other invectives from frightened workers were equally shrill: the jobs were alternately styled as being poached or stolen. Some held a prayer vigil for their jobs.

Talks between the company and the union on a new contract began in August, a year before the current contract was set to expire.

"We have worked hard to get the best possible outcome for our membership in a very bad situation," union negotiators said in a statement. "We believe we negotiated the very best deal we could, saved every job that it was possible to save, and secured them for the duration."

Five major production lines will remain in Wichita.

"This contract vote is another defining moment in Hawker Beechcraft's history," CEO Bill Boisture said in a statement. "It is critical that the union membership give careful consideration to the role they will play in the company's long-term success."

Some 350 salaried layoffs announced earlier will be cut by Nov. 1. In addition, the union has estimated about 820 hourly jobs in its bargaining unit will be eliminated under the contract proposal.

Last week, Kansas Governor Mark Parkinson put together a Kansas incentive package and brokered a deal to keep the majority of the company's jobs in Kansas. But there was a caveat: Hawker Beechcraft had to reach a long-term contract with the International Association of Machinists and Aerospace Workers.

The union has said Kansas is guaranteeing the remaining jobs and providing tuition assistance for those workers who lose their jobs.

Boisture cited the "decisive action" taken by the state of Kansas, saying if the company can combine the state investment with its own changes and a new, long-term union agreement it would be in a much more stable position.

"Our presence here in Wichita will be smaller, but the remaining people will be better trained and equipped for the realities of global competition. We will work together to form a solid foundation to build on when our markets grow once again," he said.

In addition to the 10 percent cut in base pay, the offer to the machinists includes a provision to reopen the contract in 2014 for the limited purpose of evaluating wage increases, pension and other benefits. The average pay at the company is now $27 an hour.

Pension benefits remain unchanged, but employees will be progressively shouldering a greater share of their health care insurance costs.

"We have worked toward a commitment to keep jobs in Wichita, while competing against other states who wished to poach our jobs, with a company fighting for survival, too," the negotiating team said in a statement. "Although there are concessions, we made huge improvements in job security."

A union analysis of job security released later Wednesday shows about 1,718 workers on final assembly lines, or 66 percent of the bargaining unit, will be covered by job security language for work. The company plans to eliminate 821 jobs and has no current plans for about 86 workers, the union said. The lost machining jobs are mostly in the company's fabrication work, small parts, electrical and upholstery operations along with some back shop work.

The mood going into the early negotiations this year sharply contrasted talks in August 2008, when striking machinists accepted a contract that covered about 4,700 hourly workers at the Wichita plant and 500 in Salina.

Since then, Hawker Beechcraft has said it was closing its Salina plant and has issued several rounds of layoff notices at its Wichita facility that have left the machinists union now representing about 2,600 workers.

"Last week, the reality is that the plant teetered close to being gone forever. Our brothers and sisters in Salina can tell us how real it is. The governor gave us a second chance to save the jobs," the union said.

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