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Posted on 11/13/2011 2:37:04 PM PST by Evil Slayer
Hawker Beechcraft issued 60-day layoff notices Friday to 300 workers, the company said in a statement.
A source said the notices included 210 salaried and 90 hourly workers. The same source said there could be more layoffs sometime around February.
The company issued a statement saying that many of the employees were notified Friday of the cuts.
Hawker Beechcraft employs about 6,000 people, including about 4,700 in Wichita and 200 in Salina.
Some employees laid off were walked out the door Friday, although the company has said they would be paid for the next two months. The practice has been common in previous rounds of layoffs.
Hawker Beechcraft CEO Bill Boisture warned employees in a letter last week of the looming job reductions, which he said were necessary because the business jet market hasn’t returned as soon as expected. The company must adjust to the new realities, he wrote.
The cuts mean that the city will have to work aggressively with several hundred families to meet their needs, Mayor Carl Brewer said after the layoffs were announced.
“We’re always disappointed any time we lose any type of jobs,” he said. While the number of cuts “isn’t bad,” any time jobs are lost is a concern, he said.
Sedgwick County Commission chairman Dave Unruh said he’s disappointed about the layoffs in light of the trials facing the economy, but he respects the company’s right to make the decision.
“It’s a tough deal, but they’ve got to do what it takes to keep their boat afloat,” Unruh said.
Hawker Beechcraft, in its statement Friday, said it can confirm that its Kansas employment level after the workforce reduction will stay well above what its partnership with the state of Kansas requires. The company said it notified city, county and state officials before Friday’s announcement.
Last year, the state agreed to give the company $40 million in tax-exempt bonds to upgrade the company’s products, reconfigure operations and train workers. The city of Wichita and Sedgwick County together added $5 million. The agreement came as the company was considering moving work to Louisiana.
In exchange for the bonds, Hawker Beechcraft agreed to keep its headquarters and most of its operations in Wichita at least until Dec. 31, 2020. It also agreed to employ at least 4,000 in the state. Penalties don’t kick in, however, until employment drops below 3,600. Should that occur, payments would be reduced according to a formula based on the job numbers.
The city and state worked hard to keep Hawker in Wichita, Brewer said. City staff and attorneys will evaluate the employment numbers and check agreements in place, he said.
“In my mind, they’re still above the 4,000 … but we will aggressively check all agreements still in place,” Brewer said.
Hawker Beechcraft has been reducing its Wichita footprint as it works to close Plants I and II and move work to outside suppliers and to its facility in Chihuahua, Mexico, in an effort to cut costs. The company has said it’s cutting about 800 jobs related to that effort. Friday’s cuts appear unrelated to that plan.
On Oct. 31, Hawker Beechcraft issued 60-day layoff warnings to 100 Wichita workers and one Salina employee, according to the Kansas Department of Labor. Including the notices issued Friday, the company has issued 759 layoff notices this year.
Remember the "luxury tax" back in the late 80's and early 90's? It was a 10% charge assessed on new boats costing more than $100,000 and airplanes over $250,000. I believe it was also assessed on new cars over a certain threshold, but I don't think any American cars exceeded it.
The luxury tax was finally repealed during the (first) Bush administration, but not before it put most of the custom boat builders in the US out of business. It literally destroyed that industry, which was mostly small businesses and family-run operations. It also put 1000's of craftsmen out of work.
Airplane builders had other problems: liability insurance was making it impossible for them to build small planes (under the $250,000 threshold). That was finally addressed in 1994 with a statue of repose that barred most liability claims after 18 years from date of manufacture.
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