Union fights Hawker Beechcraft executive bonuses
Published on -7/26/2012, 7:29 AM
WICHITA, Kan. (AP) -- A machinists union urged a bankruptcy judge Wednesday to consider the "complete irony and hypocrisy" of Hawker Beechcraft's request to pay eight top executives more than $5.3 million in bonuses while other jobs are cut and the company seeks to eliminate pension plans.
The International Association of Machinists and Aerospace Workers filed the formal objection in federal bankruptcy court in New York. A hearing is scheduled Thursday for the judge to consider the bonus request from the Kansas-based airplane maker.
Union officials also oppose an additional $1.9 million in bonuses sought for 31 other management-level employees.
The Justice Department's bankruptcy watchdog agency, the U.S. Trustee Program, has also challenged the bonuses.
Hawker Beechcraft contends the bonus plan recognizes the critical role of certain employees in the bankruptcy process. The company says retaining those executives is crucial to its ongoing business and bankruptcy restructuring.
But the machinists union argues in its court filing that the proposed payouts are "unnecessary, excessive and unreasonable." It questioned why company executives should be paid up to 200 percent of their base salaries as a bonus during the bankruptcy while the company pays a $10 million restructuring fee to an investment banking and financial services firm for the work.
Hawker Beechcraft is seeking "to unfairly discriminate in favor of certain high level employees at the expense of their rank-and-file employees," according to the filing. "Providing certain employees with excessive, easy to reach bonuses, while simultaneously seeking (to) eliminate jobs and reduce pension obligations to others, is certainly not fair and reasonable."
Hawker Beechcraft Corp., based in Wichita, is owned by Onex Partners and GS Capital Partners, a Goldman Sachs private equity fund. The company filed for bankruptcy protection in May. The court has approved exclusive talks with a Chinese firm that has offered nearly $1.8 billion to purchase the company's business jet and general aviation operations.