Hawker Beechcraft to Cut Workforce At 'All Levels' of Company


Hawker Beechcraft of Wichita, Kan., is once again cutting staff at its locations, which could include its completion center at the Little Rock National Airport.

Sarah Estes, a media spokeswoman for airplane maker, told Arkansas Business that the company does not yet know how many Little Rock employees will be affected because the company is "still assessing our company-wide needs.

"We do know it will touch all levels of our company," she said.

In March, Hawker told Arkansas Business that it employs about 500 people at its Little Rock site.

On Friday, Chairman and CEO Bill Boisture sent a letter to the company's employees outlining the reasons for the reduction. (See the full letter at the end of this story.)

Boisture cited the European debt crisis, slowing growth in China, unrest in the Middle East and a "recessionary climate" in the U.S. He also said spending on defense is under pressure in the U.S. and other countries.

"This combination of events is continuing to erode buyer confidence and hence demand for our products. It is my view that this condition, or some combination of it, will exist for quite some time in our Business and General Aviation sector," he wrote.

Boisture said employees effected by the staff reduction will be given a 60-day Worker Adjustment and Retraining Notice, or WARN, on Nov. 11.

"Each employee will be notified of whether he/she will be required to work during all or some portion of the 60-day WARN period based on business needs," he wrote.

Last year, the company announced plans to cut 350 employees companywide.

The announcement comes as the Arkansas aerospace industry recovers from a lackluster year in 2010. In terms of export dollars, the industry had grown at a rapid clip throughout the last decade. But it took a nosedive last year, with export values tumbling nearly 70 percent from the 2009 record of more than $1.67 billion.

Hawker Beechcraft saw a drop in revenue for 2010, but Ron Gunnarson, vice president of marketing, told Arkansas Business in April that business appeared to be improving. But Gunnarson said that rising oil prices, unrest in the Middle East and European economic uncertainty might threaten that improvement.

Boisture's Full Letter to Employees:

November 4, 2011

Fellow Hawker Beechcraft Employees:

In 2009, we sized our company to a Business and General Aviation market we anticipated to begin growing in 2012. At present, the airplane markets in which we compete are showing little sign of growth, and the key indicators that could trigger such growth are stubbornly low.

We know there is pent up demand for our products, but major world regional economies are troubled: Europe's debt crisis continues, China's growth is slowing, and the Arab Spring is running into a Fall of unrest in the Middle East. The U.S. is experiencing a continuing recessionary climate while our elected leaders are adversely targeting our products and customers in their attempts to cope with budget shortfalls. This combination of events is continuing to erode buyer confidence and hence demand for our products. It is my view that this condition, or some combination of it, will exist for quite some time in our Business and General Aviation sector.

Our Defense and Special Mission businesses face real challenges as spending on defense is under pressure in our government and in governments around the world. While we have stability in these sectors of our business, we must make smart changes to enhance our competitiveness in new markets worldwide.

We have solid plans and good potential for growth in international markets and in new, innovative retrofit products in our Global Customer Support business. We will align this team to be better supported by other market facing groups in our company.

The combination of these factors brings us to a decision to continue to resize and align our company to a market that is projected, for the next two years, to remain small relative to past markets and which projects modest growth rates beyond that time. The necessary reductions in force will affect all levels of our company. Affected employees will be given a 60-day Worker Adjustment and Retraining Notice (WARN) on November 11. Each employee will be notified of whether he/she will be required to work during all or some portion of the 60-day WARN period based on business needs.

We will continue to work hard to transform our business through major shifts in work, changes in process and focus on first-time quality. We are making good progress, as we must, to be efficiently competitive in a smaller future market. I am very proud of our team's effort to transform this business under difficult economic conditions.

This is a rough time for our company, community and employees. It is very important that we continue our pattern of respect and care for our impacted colleagues and that we put this next phase of our transformation to a smaller company behind us quickly and focus on shaping our future as a more agile and stronger team.

Sincerely,

Bill Boisture

Chairman and CEO