ST. LOUIS - Textron Inc.’s chief executive said Friday that his aviation company’s $1.4 billion purchase of Beechcraft Corp. will require “restructuring and optimization of costs.” But whether that includes job cuts at Beechcraft’s home base in Kansas, or elsewhere, hasn’t been decided.
Textron, Cessna Aircraft’s parent company, announced late Thursday that it was purchasing Wichita, Kan.-based Beechcraft Corp. in a merger of big players in aviation. Textron’s shares rose 41 cents, or 1.1 percent, to close Friday at $36.61.
The move caps a turbulent year for Beechcraft, which has roughly 5,400 employees worldwide, including about 3,300 at its Wichita headquarters. The company emerged from bankruptcy 10 months ago largely freed from debt and its unprofitable Hawker business jet operations.
Textron’s purchase is expected to close by the second half of 2014, probably around midyear.
Scott C. Donnelly, Textron chairman and chief executive officer, acknowledged during an investors teleconference Friday that Beechcraft employees have been through a lot over the past few years.
“From an employee’s perspective, obviously we are going to need to go through restructuring and optimization of costs, but it’s going to strengthen those King Air and T-6 and Baron and Bonanza products going forward,” said Donnelly, referring to Beechcraft’s lines of airplanes.
Textron, which is based in Providence, R.I., hasn’t made a decision on whether layoffs will be necessary, company spokesman Dave Sylvestre said. He said a transition team was being formed, but until it begins its work, “it would be too early for us to speculate on what it means in terms of workforce size or plant consolidations or anything like that.”
But he said that overall, the merger is good news for Wichita.
“Beechcraft now has a strong parent company, which means greater stability and investor capacity for Beechcraft,” Sylvestre said.
Messages seeking comment from officials at the International Association of Machinists & Aerospace Workers in Wichita were not immediately returned.
Beechcraft was founded in Kansas in the 1930s, then purchased by the Canadian investment firm Onex Partners and Goldman Sachs Group Inc.
’sprivate equity arm in 2007.
It has more than 36,000 aircraft in service, but struggles in the sluggish business jet market during the economic downturn forced the company to file for bankruptcy reorganization in May 2012.
The company, which emerged from bankruptcy on Feb. 19, has stopped making its unprofitable Hawker business jets to focus on turboprop and piston aircraft as well as trainers and light attack planes for the military.
When Hawker vacated Bill and Hillary Clinton National Airport/Adams Field this year it left behind seven buildings on almost 46 acres.
The hangars, a facility to paint aircraft and other specialized space cover about 400,000 square feet. Airport officials are still trying to line up a new tenant for the space.
Cessna also has strong ties to Wichita, founded there in 1927.It has built and delivered nearly 200,000 airplanes worldwide since then, including 6,500 Citation business jets, according to Textron.
It also makes Caravan single engine utility turboprops and single-engine piston aircraft, and it provides aftermarket services including parts, maintenance, inspection and repairs.
Donnelly lauded Beechcraft’s line of King Air turboprop planes as complements to Cessna’s Caravan and Citation jet lineup.
Beechcraft Chief Executive Officer Bill Boisture had said in recent months that he expected the company would sell at least its idled business-jet assets by the end of 2013.
“Textron’s experience in the industry and its willingness to invest in and maintain the iconic Beechcraft brand make it an ideal parent company, one that will help us continue to satisfy our customers and meet ourbusiness objectives at a faster pace,” Boisture said in a statement Thursday.
Business, Pages 31 on 12/28/2013