(WICHITA, Kan.) — Kansas Governor Mark Parkinson says stop worrying about Louisiana, Hawker Beechcraft is staying where it belongs in Wichita. The governor made the announcement Tuesday morning. He, the City of Wichita and Sedgwick County worked out a $45 million incentive package to keep the plane maker in town.
"I think this is an early Christmas for the people of Hawker Beechcraft. "We will go forward with some renewed lift under our wings," said CEO Bill Boisture.
Hawker is staying with the help of $40 million from the state. The money will come from Hawker employee income tax with holdings. Parkinson says they'll take the money Hawker employees are paying the state and reinvest it in the company. $30 million will go to research and development and $10 million to educating employees at places like the National Center for Aviation Training. Wichita and Sedgwick County will each chip in another $2.5 million, rounding out the $45 million package.
"We have a ten year commitment. This commitment is enforced over a gradual payout of the money," said Governor Mark Parkinson. The state will pay out $10 million next year and after that $5 million a year for four years. Parkinson says another part of the deal is Hawker making a good faith effort to outsource some of its work to local machine shops. He says they believe there's $25 million a year that could go to area businesses.
In return for the money, Hawker's agreed to keep all of its product lines in Wichita through 2020. That includes headquarters, engineering, supply chain management, composite manufacturing, aircraft final assembly, flight test and global customer service. Hawker must also employ at least 4,000 people. If employment falls below 4,000, the company would be required to pay back parts of the incentive.
During the announcement, Boisture was asked how different this offer is compared to the one from Louisiana. Boisture says he couldn't comment because of a nondisclosure agreement. The governor says he suspects it was more than $45 million, but Hawker realized money isn't all that matters. "There is a reservoir of knowledge in this community that cannot be replicated by some rouge state that decides they know how to build airplanes," Parkinson said.
Hawker Beechcraft agrees to deal to stay in Wichita
Press Release from Hawker Beechcraft:
Hawker Beechcraft Reaches Agreement with State of Kansas
WICHITA, Kan. (Dec. 21, 2010) – Hawker Beechcraft Corporation (HBC) today announced that it has reached a formal agreement with the State of Kansas that significantly incentivizes the company to maintain its presence in Wichita over the next 10 years.
Chairman and CEO Bill Boisture and Kansas Governor Mark Parkinson announced the agreement today alongside Wichita Mayor Carl Brewer and Sedgwick County Commissioner Karl Peterjohn at an event at the National Center for Aviation Training. The State’s incentive package requires Hawker Beechcraft to maintain its current product lines in Wichita and retain at least 4,000 jobs over the next 10 years.
“Today’s announcement marks a key point in the future of Hawker Beechcraft,” Boisture said.
“With the acceptance of this agreement, we are committing to be successful as a Wichita, Kansas, and U.S. based private company and preserving a valued American industry in tomorrow’s aviation markets. With the strong level of commitment to our people and their skills enhancement, we intend to have the best trained work force in the industry to power the development, manufacturing and projection of our diversified product line of business turbine aircraft, trainers and special mission offerings to emerging global markets from here in Kansas.” “As the general aviation industry continues to recover from the economic recession, this agreement is a great victory for our state as it stabilizes Hawker Beechcraft’s long-term presence in Wichita and provides some security to thousands of employees in uncertain times,” said Parkinson. “I am pleased with the workforce training assistance in this package which will further solidify Wichita as having the best trained aviation workforce in the world. With this responsible agreement, Wichita and the entire state will benefit as this critical sector of our economy prepares for a stronger future.”
