Beechcraft exits from bankruptcy

— Planemaker Beechcraft Corp., formerly Hawker Beechcraft Inc., emerged Tuesday from bankruptcy protection, freed from much of its debt and its unprofitable business jet operations.

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

Employment numbers at the Hawker Beechcraft completion center in Little Rock have dwindled to “a small number,” spokesman Nicole Alexander said in an e-mail Tuesday. She confirmed thata separate service center in Little Rock has closed as planned.

Employment at the Little Rock completions center stood at an unconfirmed 450 as of August when the plane-maker announced that it would be cutting 170 jobs over the next two months. The center finished jets to customer specifications.

The company said Tuesday that it is still seeking a buyer for its jet manufacturing business, which it has shed in the reorganization.

Employment at the Wichita plant was about 4,100 in August after trimming about 1,000 workers last year, according to the Wichita Eagle.

The company is now focused on its turboprop andpiston aircraft and its military work - but the country faces possible defense department cutbacks.

The prospect of the government’s defense retrenchment comes at a crucial time for the company, as it competes for a $354 million U.S. government contract to build aircraft for use in Afghani-stan. 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 light-air-support contract is crucial for the company. It hasn’t been put into production yet, but Boisture told The Associated Press on Tuesday that building such a plane is an objective this year. Winning a customer to launch production is one of the company’s 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 headquarters. “If the LAScontract 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.”

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 light-air-support contract, or whether there would be more layoffs if the company did not get it.

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.

Hawker B eechcraft, 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. Hawker Beechcraft creditors swapped debt owed to them for equity stakes in Beechcraft.

Hawker Beechcraft struggled with the sluggish business jet market more than other plane-makers did because it was purchased in 2007 in a debt-heavy deal just before the general aviationmarket tanked. Its bankruptcy involved 18 entities and $2.4 billion in debt.

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

Information for this article was provided by Roxana Hegeman of The Associated Press and Jack Weatherly of the Arkansas Democrat-Gazette.

Business, Pages 26 on 02/20/2013

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