Sun, May 08, 2005
Deal Still In Work
Boeing told its Wichita
employees Friday that their 60-day layoff notices were extended for
an indefinite time. Onex executives still expect the deal to close
in June, but there are numerous issues to address.
One of the major challenges for Onex is to establish new labor
contracts with the labor unions. Thomas Buffenbarger, International
President of the International Association of Machinists &
Aerospace Workers, met with former Congressman Richard Gephardt,
acting as a consultant hired by Onex to help reach agreement with
the unions.
"Hopefully, these talks have laid the groundwork to resolve some
of the major issues that have kept the parties apart throughout
this negotiating process," said a memo signed by Machinists Union
District 70 President Steve Rooney according to the Wichita
Eagle.
Even after they reach agreement with the unions, Onex will face
multiple restrictions in this deal. The 113-page Asset Purchase
Agreement filed with the Securities and Exchange Commission spells
out a variety of conditions for the purchase of Boeing's commercial
operations in Wichita, Tulsa and McAlester, Oklahoma.
Onex must keep the bulk of manufacturing work and the
headquarters in Wichita for ten years, although if they give up
control of the company, the timeframe is reduced to five years.
Onex will pay $900
million in cash and undertake some liabilities bringing the deal
total to around $1.2 billion, depending on conditions at the time
of closing.
Onex will put at least $375 million down at closing, and will
finance the rest of the purchase. Boeing agrees to keep work
currently done at Wichita with Onex providing production and cost
saving obligations can be met. Also, Boeing has agreed that Onex
will be given the chance to bid on new work for the first eight
years. Boeing must send at least $50 million of work annually to
Onex or pay a penalty.
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