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Wed, Feb 04, 2009

Schuster: Hawker Beechcraft To Eliminate 2,300 Add'l Jobs

And Even That May Not Be The End Of It

Hawker Beechcraft CEO Jim Schuster told employees Tuesday the Wichita-based planemaker will eliminate 2,300 positions, with many of those cuts coming at the end of this week.

The Wichita Business Journal reports Schuster made the announcement in a company-wide memorandum. So far, the company hasn't disclosed how those layoffs will be distributed throughout the company.

"We at HBC have conducted a sweeping evaluation of our business plans and implemented a wide range of measures to dramatically reduce our costs," Schuster wrote. "As a consequence of these actions, we will be forced to reduce our work force by approximately 2,300 employees before the end of the year."

As ANN reported, initial speculation placed the number of layoffs at close to 2,700. The timing of the layoffs wasn't by accident, as Friday marks the 91st day since Hawker Beech laid off 490 workers. Anyone laid off before that timeframe expires would count towards the maximum of 500 workers that triggers mandatory 60-day notices under the Worker Adjustment and Retraining Notification Act.

By holding the previous layoffs to under 500, Hawker Beechcraft steered clear of the requirement under WARN to pay workers for two extra months. While coming layoffs will exceed that total, presumably Hawker Beech would prefer not to be required to pay those original 490 workers their two months pay as well.

Schuster (right) cited the weak state of the business aircraft market, as well as problems with the federal stimulus package now under consideration before Congress. Schuster said that plan fails to loosen credit markets, impacting the ability of what customers there are to finance high-dollar purchases.

The CEO also had some choice words for media pundits and politicians, who in recent months have scapegoated general aviation as "a wasteful extravagance instead of a critical business tool and the source of millions of American jobs."

Schuster's announcement is but the latest wave in a storm of bad news for the aerospace industry, and for Wichita in particular. Last week, Cessna announced it would lay off an additional 2,000 workers, with 1,500 of those jobs being cut in Wichita. Boeing has also slashed 800 positions from Boeing IDS Wichita, as part of the planemaker's effort to trim 10,000 positions from its workforce.

"The increased challenges that lay before us demand an extraordinary response from our company and the US aviation industry to ensure our short-term stability and long-term success," Schuster said. "This is an extremely painful step for the HBC family and community, but one that is absolutely necessary."

Alas, Schuster couldn't say whether this would be the end of layoff announcements from Hawker Beechcraft. "While I wish I could commit to you that this will be our final action, I cannot do so at this time given the extreme volatility in the marketplace.

"The bottom line is that we must be prepared to do whatever is required to make certain that we successfully emerge from the downturn."

FMI: www.hawkerbeechcraft.com

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