--

Oct. 13--BY MOLLY McMILLIN The Wichita Eagle

LAS VEGAS -- The reinvention of Hawker Beechcraft hasn't gone entirely smoothly, but that's expected given the scope of the project, chairman and CEO Bill Boisture said this week in Las Vegas at the National Business Aviation Association's annual convention.

Still, it remains the right strategy, Boisture said in an interview at the company's static display at Henderson Executive Airport, where its line of aircraft are on display this week.

"We're working our way through our problems," Boisture said.

The company has embarked on a transformation to cut costs, reduce manufacturing time and adjust to what Boisture says may be a "new reality."

Forecasters predict it will take years before business jet demand returns to levels reached before the economic downturn. Boisture agrees the climb out of the aviation recession will be slow.

"It's an inconsistent market," Boisture said. "So far, there's not a lot of firmness in it."

Until buyer confidence returns in the world and in the stock markets, the aviation market will be soft.

"It takes money and it takes courage to buy an airplane," Boisture said. "The courage comes in the face of whatever business you're in is expanding and things are kind of calm."

Boisture joined Hawker Beechcraft in 2009 as the industry was reeling from the recession and business jet deliveries dropped 40 percent.

Two years ago, the company embarked on its reinvention in a plan called Project Challenge. Its aim was to cut costs and time out of building an airplane and become more competitive.

By the end of this year, the company will have closed more than 1 million square feet of space in Wichita and shipped more than 20,000 detailed parts to its supply chain or to Mexico. It will employ about 1,000 in its Mexico facility by year-end.

Shipping jobs outside the U.S. is a move forced by an unlevel playing field for business, Boisture said.

Some problems in the reinvention have stemmed from new teams of workers interpreting the drawings and new teams following processes they may or may not be familiar with. He expects to have those issues smoothed out by year-end as well.

"And you have a learning curve," Boisture said. "That gets better by having focused training, good quality control and by putting quality over schedule."

Some tooling that was transferred to a third-party supplier in Mexico didn't get up to speed as soon as expected, he said.

"In order to keep a continuous flow to our line, we moved some of the tooling back (to Wichita)," Boisture said. It's an interim solution until "we get it sorted out."

At the same time, he said, the company's workforce is dedicated to improving its competitiveness.

One way is to manufacture the "perfect" airplane, an airplane that has no problems, or "squawks," when the customer comes to fly it away. This year, the company has delivered more than 45 perfect planes, Boisture said.

"Because the workforce has decided that's what it takes to be successful," he said.

The company's workforce is also improving its skills and gaining new ones through training funded by a grant from the state of Kansas.

More than 2,000 employees have gone through technical training programs, and about 250 are going to college because of the funding.

"We promised to be good stewards of that money, and we are being good stewards of that money," Boisture said.

The training is important, he said, because it will result in more efficiency and in improved performance.

At the same time, Hawker Beechcraft is investing in the company on improvements to its business aircraft lines, in developing products to retrofit existing aircraft in service and on military products.

It's working on developing the AT-6 military aircraft, a derivative of its T-6 primary trainer, as a way to diversify business.

Recently it successfully dropped every NATO weapon weighing 500 pounds or less, including laser-guided bombs, conventional weapons and others.

Hawker Beechcraft put its AT-6 light support and surveillance aircraft up against Embraer's Super Tucano military aircraft in its bid to win the U.S. Air Force Light Support contract.

The initial contract is to supply 20 aircraft to two air bases in Afghanistan and another 15 to use in "building partner capacity," the Air Force said. But that number could grow to 55 aircraft worth up to $950 million.

The Air Force has said deliveries will begin in April 2013.

The date for the award, expected a few months ago, has now slid to Oct. 31.

When asked whether he was worried the program would get funded, given recent cuts in Defense Department spending, Boisture said he had no way of knowing.

"People making decisions in our country are not making them in a predictable way," Boisture said. "Your guess is as good as mine."

A Hawker Beechcraft win would keep 1,600 jobs in America, he said.

"We've done everything we know to do," Boisture said.

Reach Molly McMillin at 316-269-6708 or [email protected].

Copyright 2011 The Wichita Eagle. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.