Some 500 Jobs May Be Cut Later This Week

Another planemaker announced layoffs this week, as the current economic slump hits production lines and order books hard. Hawker Beechcraft announced Tuesday it will trim five percent of its workforce, or roughly 500 jobs.

Citing "serious challenges" due to an "unprecedented worldwide economic decline," Hawker Beech CEO Jim Schuster told employees the reductions are "painful," but "absolutely necessary."

Hawker Beechcraft spokesman Andrew Broom told The Wichita Eagle the company planned to act quickly on the layoffs, though he declined to give a specific date.

"Prolonging it is difficult for our employees and families," Broom said. Schuster also declined to comment, beyond his comments in the internal memo to Hawker Beech employees.

An unnamed source close to the matter told the Eagle the layoffs would be a mix of hourly and salaried workers, and could start as soon as this week. The company currently employs 9,780 worldwide, including over 7,700 in the Wichita area.

Schuster previously hinted at future layoffs... telling employees last month the company faced an uncertain future, despite a relatively healthy order book.

"We are approaching 2009 with extreme caution, as we expect to see eventual erosion in new aircraft orders and deliveries," he said. "This could have a serious impact on cash flow, which is the lifeblood of any privately held company like HBC."

In a separate memorandum to HBC leadership, Schuster said the company needed to scale back production, and its delivery forecasts, to "reflect the tremendous uncertainty emerging worldwide... We absolutely must not build our plans around unrealistic market expectations."

HBC carries close to $2.4 billion in debt, Schuster told employees, adding the company expects to pay close to half a million per day in interest expenses in 2009.

Despite those difficulties, Schuster attempted to spin the current downturn in a more optimistic direction. "I also see this as the opportunity of a lifetime," Schuster told HBC execs. "Never again are we likely to face circumstances quite like those we face today... never again are we likely to have the platform on which to drive change and build value.

"I have always believed that great companies come to life when times are most challenging -- ladies and gentlemen, you are the team, and this is the time."

FMI: www.hawkerbeechcraft.com