County approves its share of Hawker loan

-- May 26--Sedgwick County agreed Wednesday to give Hawker Beechcraft $500,000 each year for the next five years. But Commissioner Richard Ranzau voted against the forgivable loan, saying the money would have had more impact on the...


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May 26--Sedgwick County agreed Wednesday to give Hawker Beechcraft $500,000 each year for the next five years.

But Commissioner Richard Ranzau voted against the forgivable loan, saying the money would have had more impact on the county's coffers than Hawker's.

Commissioners voted 3-1 -- board member Karl Peterjohn was absent -- to follow through with an agreement to provide $5 million to the company over the next five years with the city of Wichita. The money is part of a $45 million package the state, county and city negotiated with the company to keep it in Kansas.

Hawker had considered moving to Louisiana. As part of the deal, it agreed to keep at least 3,600 jobs in Wichita.

Ranzau said he didn't believe Hawker planned to leave.

"I understand that Hawker has spoken with other locations," Ranzau said. But he said the company wouldn't disclose those negotiations.

"I don't believe the notion that we're going to save any jobs" because he said he doubted whether Hawker would have relocated to Louisiana.

Ranzau also questioned the company's financial standing, saying it has a negative bond rating. Ranzau said if he wanted to give $2.5 million to a company with such a rating, he would be laughed out of the room.

"Some of their bonds are . . . one level above bankruptcy," Ranzau said. "I know Hawker is hurting, but so is this county."

The county is trying to cut $9 million in spending next year and $8 million in 2013. County Manager William Buchanan has asked departments to trim 6.6 percent from their budgets, except for those involved in public safety, which he asked to trim by 3.3 percent. The county has offered some employees a voluntary retirement plan and likely will have layoffs among its 3,000 employees.

Commissioners Tim Norton and Dave Unruh spoke in favor of the loan. Norton said he didn't think the company was bluffing about considering a move.

Unruh said he also believed in the free market system. But saving 4,000 jobs -- 4,000 is the target number of jobs; the company must keep at least 3,600 to avoid penalties -- means keeping "4,000 flesh and blood people" employed in Wichita, he said.

They also talked about the multiplier effect of each Hawker job, which keeps others in the supply chain employed and benefits the retail sector.

But Ranzau persisted that the county's own economic development policy is in effect to create jobs, not retain jobs.

The loan, he said, didn't meet the county's requirements under its policy. That policy, he said, calls for considering incentives to "broaden and diversify the tax base and create new jobs," Ranzau said.

"We're giving economic development dollars to retain jobs," he said. "If we're going to do that, we should have a retention policy, not a job creation policy."

Ranzau stressed that "I absolutely want them to survive," but he said "the solution to Hawker's problems won't come from government. It will come from the company."

He also criticized union workers for not making concessions to "save their own jobs."

The city of Wichita last week approved giving Hawker the same deal. That vote was 6-1.

Under the deal, the company will keep its headquarters, engineering, supply chain management, composite fuselage manufacturing, aircraft final assembly, flight testing and global customer service and support in Wichita.

Reach Deb Gruver at 316-268-6400 or dgruver@wichitaeagle.com.

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