Hawker Beechcraft to Lay Off 170 in Little Rock

Hawker Beechcraft plans to lay off 170 of its 450 workers in Little Rock, according to a letter to employees delivered Thursday.

The Wichita, Kan.-based company, which finishes out its line of private jets at Adams Field, filed for bankruptcy protection in May.

In the letter, available in full below, CEO Steve Miller and Chairman Bill Boisture said cuts will affect employees "across multiple levels and functions, hourly and non-hourly."

"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 resizing our work force," the letter stated.

"This latest round will impact approximately 170 employees across multiple levels and functions, hourly and non-hourly, throughout our Little Rock facilities."

The letter said affected employees are receiving a 60-day Worker Adjustment and Retraining Notification. Hawker Beechcraft would not comment on the layoffs.

Ripple Effect

Gov. Mike Beebe said the news was unfortunate but noted the plant would remain open.

"I'm advised that it's a result of a slowdown in the industry," Beebe said, according to The Associated Press. "As you might imagine, our private aircraft industry suffered significantly throughout the course of the recession as well as high-end industries that tend to suffer even more. The good news is they're not shutting down; they're keeping some workforce."

Jay Chesshir, president and CEO of the Little Rock Regional Chamber of Commerce, said Hawker was "extremely important" to central Arkansas in terms of jobs, economic impact and the region's ability to attract other aviation companies.

He said it's important for local economic leaders to do what they can to help workers who have lost their jobs and find ways to keep them in the area.

"These skills aren't just laying around everywhere, which is why it's important to keep those skills here," he said.

Hawker is an important player in Arkansas' aerospace industry. It is the state's third-largest aerospace firm, according to Arkansas Business' 2012 list (PDF). Products in aerospace are the state's second-largest value-added export, according to the Arkansas Economic Development Commission.

In addition to supporting hundreds of jobs, the company occupies 247,500 SF of hangar and office space at Adams Field. Through an agreement that ends in 2037, the Bill and Hillary Clinton National Airport receives $587,626.05 per year from Hawker for the use of land and buildings at Adams Field.

Dassault Aviation's Dassault Falcon Jet, the state's largest aerospace operation, also runs a completion center at Adams Field. The company employs about 1,700 workers.

A Bankruptcy, A Buyer

Thursday's layoffs are the latest in a series of cutbacks that Hawker began after the 2008 financial crisis put a damper on demand for private jets and made credit hard to come by. Hawker, already carrying significant debt after its owners, Goldman Sachs of New York and Onex Corp. of Toronto, purchased it from Raytheon Co. in 2006, has had to cut hundreds of jobs to stay aloft.

In July, the company announced that it had reached a court-approved $1.79 billion "exclusivity agreement" to negotiate with Superior Aviation Beijing Co. Ltd. for the sale of its business jet and general aviation operations.

Hawker said Superior would make Hawker its flagship investment, maintain its U.S. headquarters, management team and employees and continue product development throughout its lines. Specifically, the company said the deal would save "thousands of American jobs, including in Wichita, Kan. and Little Rock, Ark."

During the 45-day exclusivity period, Superior would pay to support Hawker's ongoing operations. Once a deal is reached, the sale would be subject to a bankruptcy court auction.

Boisture told The Associated Press last week that his company has received the first of two $25 million installments due from Superior under the exclusivity agreement.

Hawker appointed Miller as CEO in February. The company reported 2011 revenue of $2.4 billion, down from $2.8 billion in 2010, and employs about 6,000 workers. 

Hawker's Letter to Little Rock Employees

August 2, 2012
Fellow Hawker Beechcraft Employees:
As we have communicated with you previously, the company continues to evaluate and balance production rates throughout a difficult and rapidly changing environment.
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 resizing our work force.
This latest round will impact approximately 170 employees across multiple levels and functions, hourly and non-hourly, throughout our Little Rock facilities. Affected employees are receiving a 60-day Worker Adjustment and Retraining Notification (WARN).
This continues to be an unprecedented time for our company and our employees. We encourage you to uphold a pattern of respect and care for our impacted colleagues during this time.

Sincerely,

Steve Miller
CEO
Hawker Beechcraft, Inc.

Bill Boisture
Chairman
Hawker Beechcraft Corporation

(Luke Jones of Arkansas Business and The Associated Press contributed to this report.)