Says IAM Strike To Blame For Most Of Those Losses
Hawker Beechcraft Acquisition
Company, LLC (HBAC) reported lower sales and operating income
during the three months ending September 28, 2008, as compared to
the same period in 2007 primarily resulting from a four-week strike
in August by the International Association of Machinists (IAM).
Net sales for the three months ending September 28, 2008, were
$783.3 million, a decrease of $87.7 million compared to the third
quarter of 2007. Aircraft deliveries were significantly impacted by
the strike. During the quarter, HBC delivered 86 business and
general aviation aircraft consisting of 34 jet, 33 turboprop and 19
piston aircraft, as compared to the 106 aircraft during the same
period in 2007.
During the three months ending September 28, Hawker Beech
recorded operating income of $15.3 million, compared to an
operating income of $62.1 million during the third quarter of 2007.
The strike resulted in lower business and general aviation aircraft
deliveries and reduced production in the Company’s trainer
segment, impacting overall operating income. Also included in the
third quarter 2008 results was a $25.3 million charge associated
with increased costs to conform specific early-production Hawker
4000 units to the final type design and to establish standard
production processes.
Operating cash flow consumed during the nine months ending Sept.
28, 2008, was $159.7 million. This is primarily due to an increase
in material receipts to support an increase in production rates
coupled with reduced aircraft deliveries during the period as a
result of the strike.
Net bookings for the three months ending September 28, 2008,
totaled $1.2 billion, resulting in a record backlog of $7.9 billion
at the end of the third quarter of 2008.
"This was a difficult quarter as the reduced aircraft deliveries
impacted our financial results significantly," said Jim Schuster,
chairman and CEO of Hawker Beechcraft Corporation. "We are also
closely monitoring global economic conditions to assess the impact
on our industry. Going forward, we will be proactive in responding
to the evolving economic realities while continuing to provide the
industry’s best products, services and support."
As ANN reported, in response to the weakness
in the global economy and overall economic outlook, HBC informed
employees that reductions in workforce would be required as
adjustments are made to aircraft production rates. The change in
aircraft production reflects anticipation of reduced demand for new
aircraft, spares and maintenance services.
Despite the job losses, the financial impact resulting from the
planned reductions is "not anticipated to be significant,"
according to the planemaker.