Not to bring a dark cloud to our generally cheerful and enlightened conversation, but I read some troubling news regarding potential developments at one of the largest General Aviation manufacturers this past week. The Machinist union leadership had discussions with HawkerBeech, and afterwards issued a rather alarming press release, to the effect that,"Union officials said Wednesday that HawkerBeechcraft is considering moving work out of Wichita that could shrink its hourly work force 50 to 75 percent over the next two years.".
Ouch. One wonders how that would affect overall production from HawkerBeechcraft. And perhaps on a slightly less dark note, one might also wonder how much of that might be posturing as a prelude to contract negotiations. Donno.
Molly McMillin had an article covering that announcement in the July 15, 2010 Wichita Eagle; Union: Hawker may make massive cuts.
I suppose HawkerBeechcraft was in the awkward position of having to decide who to give the bad news to first, the media or the employees. They did the right thing by discussing it with the union- I suppose the union was obligated to inform the public after it told it's members, and the company issued a public statement following that.
"The company issued a statement in response to Rooney's letter to union members:
"Last September the company initiated a series of meetings to update the union leadership about serious challenges it faces during these unprecedented economic times," the statement said. "These conversations have included a spectrum of possibilities for the company's future footprint and the likely impact on its workforce in all its locations..
(Hmm, a too-common example, Salina, Ks).
"The company values this partnership and believes that there is a great opportunity available to us to work together to influence a positive outcome".
(Ugh- that last line is a press release* reminiscent of the original Eclipse P.R.'s with Vernian subterfuge and spectacular disconsonance).
Alas, sadly "us" will shortly be 130 smaller.
(*S-a-y, didn't Andrew Broom leave Eclipse to go to HawkerBeech? Yup, but he's since continued to move on- and nicely up; Andrew Broom, AOPA vice president of communications).
The rather discouraging news from HawkerBeechcraft was preceded by a couple of weeks by some odd news from Spirit AeroSystems. (Perhaps a new name for some- it's basically what was the commercial side of Boeing-Wichita, plus what was NorthAmerican/Rockwell/McDonnell/Douglas/Boeing-Tulsa. (Maybe somebody can clarify the Tulsa operation; the Wichita operation for Spirit is about 80% of what used to be Boeing Wichita- Boeing still has a couple thousand employees doing Military work in Wichita- including potentially significant KC-X tanker work).
At the end of June, the IAM voted to ratify**- sort of- a 10-year contract with Spirit Aerosystems- Jennifer Michels' June 28 story in Aviation Week:
Spirit AeroSystems Machinists Ratify Pact.
(**Actually, the majority- 57% -voted to reject the contract, but it seems it was set up as a strike vote rather than a ratification vote, and two-thirds majority were needed to authorize a strike. Seems weird that it wasn't set up that way- I can think of numerous instances in other industries where work continued with the expired contract terms in place during continuing negotiations).
Not to be outdone in the cheery press release competition, afterwards the IAM declared:
"On June 24, the IAM referred to the new contract, which covers about 6,000 workers, as a historic accord, providing “unprecedented levels of job security” as well as pay increases linked to company performance and pension improvements. The new contract “stems the tide of outsourcing and job offshoring,” according to the Local 839 Bargaining Committee".
(Buzz is there was a 150 share signing bonus, currently $20/share).
More details from Molly McMillin's June 24 piece in the Wichita Eagle
Spirit offers Machinists 10-year contract.
Spirit Aerosystems management is surely pleased with the stability and price=planning possible with the long-term labor contract, and so was Wall Street.
Interestingly, the Canadian firm Onex owns HawkerBeechcraft (in partnership with Goldman-Sachs), and owns58% of Spirit Aerosystems , and " through its portfolio of companies, is the second largest employer in Canada, after the Federal Government, with 238,000 employees".
I keep thinking things have bottomed out, but it seems every couple months have to lower the elevation on the valley floor. Perhaps there is a bit of encouraging news though, the 2010Q1 GAMA statistics show that although units delivered are down compared to 2009Q1 (390 vs 459), billings are up over 2010 by 7 percent. Hopefully that is translating into jobs somewhere.
