Saturday, October 16, 2010

Union Stupidity at Hawker Beechcraft

I've got to hand it to union workers.  No one does stupidity like they do:

Machinists at Hawker Beechcraft voted Saturday against a new seven-year contract that would have included a 10 percent pay cut and other concessions aimed at keeping the company from moving all its operations out of Kansas.

Way to go unions!  You've just driven your employer to Baton Rouge, Louisiana.  If you're not willing to relocate then you're out of a job.  Even though Hawker Beechcraft is privately held, their 10-Q filings and other financial statements provide enough confirmation of the company's challenges.  Quarterly gross sales of $603.7mm at the end of June 2010 are over $170mm less than what they were a year prior.  Year-over-year quarterly revenue for the same period plummeted from $172mm to a loss of almost $57mm. 

Numbers like that are a disaster heading into the next leg of a recession.  Hawker Beechcraft would be well-served to take Louisiana's offer.  Kansas' incentives mean nothing now that unions have rejected a deal. 

Full disclosure:  No positions in Hawker Beechcraft's joint owners, Goldman Sachs (GS) or Onex Corporation (OCX.TO).