Beechcraft emerges from bankruptcy protection

  • By Roxana Hegeman Associated Press
  • Tuesday, February 19, 2013 4:14pm
  • Business

WICHITA, Kan. — Kansas plane maker Beechcraft, formerly Hawker Beechcraft, emerged Tuesday from bankruptcy protection freed from much of its debt and its unprofitable business jet operations.

It’s now focused on its turboprop and piston aircraft and its military work — but the country faces potentially massive defense cutbacks.

The prospect of the government’s defense retrenchment comes at a crucial time for the Wichita, Kan., company, as it competes for a $354 million U.S. government contract to build aircraft for use in Afghanistan. The high-stakes “light air support” contract could ultimately be worth nearly $1 billion, depending on future orders.

The single-engine turboprop, dubbed the AT-6, that Beechcraft proposes to build under the LAS contract is crucial for the company. It hasn’t been put into production yet, but CEO Bill Boisture told The Associated Press Tuesday that building such a plane is a major objective this year. Winning a customer to launch production is one of the top three goals to get Beechcraft “off on the right foot” in 2013, the company told its employees.

“We have good prospects for that happening,” Boisture, who had been chairman of Hawker Beechcraft, said in an interview at the company’s Wichita headquarters. “If the LAS contract is not awarded, or we don’t win for some reason, we would have to take some small, interim steps until we have achieved a launch customer. But we will go forward with the program.”

Beechcraft is exiting bankruptcy with roughly 5,400 employees worldwide, including about 3,300 at its headquarters. Boisture said he anticipated those employment levels to remain stable.

The company has long said the AT-6 government contract would generate about 700 jobs, but on Tuesday Boisture said it is “not useful” to speculate about whether all those would be additional jobs if the company won the LAS contract, or whether there would be more layoffs if the company did not get it.

In addition to the getting a launch customer for the AT6 program, employees gathered at companywide meetings on Tuesday were told that Beechcraft’s other major objectives included making sure that the world markets know that “Beechcraft is back — that it is well-capitalized, soundly financed and able to develop new products” and re-establishing its sales network for the business and general aviation planes it still builds.

The renamed company’s formal announcement that it is exiting bankruptcy comes two weeks after its reorganization plan was approved by the U.S. Bankruptcy Court in the Southern District of New York. Beechcraft’s debt was cut and creditors agreed to $600 million in exit financing. That could help it to better compete in the special mission, trainer and light attack airplane markets while continuing its turboprop and piston airplane manufacturing.

Beechcraft’s other defense products include the T-6 military trainer, with a worldwide fleet of nearly 800 aircraft.

Beechcraft no longer builds business jets. It has shed their unprofitable manufacturing operations and is in talks with several interested parties in the sale of the rest of the Hawker business jet assets, which include intellectual property, tools, inventory and facilities. Boisture declined to identify any potential buyers.

Hawker Beechcraft, owned by Canadian investment firm Onex Partners and Goldman Sachs Group Inc.’s private equity arm, filed for bankruptcy reorganization in May. Goldman and Onex kept a minor equity stake in the reorganized company.

Slightly more than 90 percent of Beechcraft is now owned by the investment firms that had been owed about $2.5 billion by Hawker Beechcraft, said spokeswoman Nicole Alexander. The four major shareholders are Centerbridge Partners LP; Angelo Gordon &Co.; Bain Capital’s Sankaty Advisors LLC; and Capital Research &Management.

Hawker Beechcraft struggled with the sluggish business jet market more than other plane makers because it was purchased in 2007 in a debt-heavy deal just before the general aviation market tanked. In addition to its Wichita headquarters, the company has factories in Little Rock, Ark.; the United Kingdom; and Mexico, as well as more than 90 service centers worldwide.

Beechcraft traces its Kansas roots to Beech Aircraft Corp., a company founded by Walter and Olive Ann Beech that began making aircraft in the 1930s.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.