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Posted: 10/31/2006 5:01:58 AM EST
Unfortunately I was laid off during this time (I had lower seniority than others, I am back now) so I wont get shit from the company. But, for the ones that were not laid off, they will each receive $56,000 (31,000 in stock, and 25,000 cash). Although I wasn't there during the sell of Boeing to Onex/Spirit and I know I don't deserve the money (I was laid off for over a year), it still sucks knowing that a lot of my co-workers will be getting this big chunk of change come next spring. Oh well life goes on. So congrats to those that are getting the money.

$56K windfall for some at former Boeing plant in Kansas

By Dominic Gates; By Dominic Gates

Seattle Times aerospace reporter; Seattle Times aerospace reporter

When Boeing sold its Wichita, Kan., plant last year, the new owners laid off 1,300 people, cut machinists' wages by 10 percent and reduced their benefits.

But the blue-collar workers who survived the layoffs are in for some big-time compensation: By next spring, they are set to receive a windfall of about $56,000 each.

"That more than makes up for the wage reduction we had to take," said Machinists union national leader Tom Buffenbarger, anticipating the news in an interview last week.

The newly independent company — now called Spirit AeroSystems — said it will pay out an estimated $270 million to 4,851 former Boeing machinists and electricians when it completes an upcoming initial public offering (IPO) of stock.

Eligible workers will each receive about $31,000 in stock and $25,000 in cash if the IPO is completed at $24 per share, according to a filing Monday with the Securities and Exchange Commission.

Three years ago, Buffenbarger initiated a failed out-of-left-field buyout bid for all of Boeing's commercial-airplanes unit, using private venture capital from Texas Pacific Group, seen as a union-friendly investment firm. And last year, he praised the integrity and labor credentials of Onex, the Canadian private equity firm that bought Boeing Wichita.

Buffenbarger sees the Spirit IPO as confirmation of the potential for cooperation between labor and capital in American manufacturing, acting together to preserve jobs and at the same time make money.

"It seems the new-model venture capitalist is much more open to working with labor than old-line Wall Street," said Buffenbarger. "Good things can happen from that."

One Wichita machinist complained Monday of an excessive workload at the plant since the sale, as managers seek to raise productivity.

"Grind, grind, grind, every single day," he said. But nevertheless, he had only praise for Onex, which in his eyes has done exactly what it said it would do.

"They've come through," said the machinist, who asked for anonymity. "They really have."

If the IPO goes off as expected, Onex's new owners will do well.

As outlined in the filing, the current stockholders, chiefly Onex, expect to reap about $1.2 billion, minus offering costs, from selling some of their shares. That will recoup most of the $1.2 billion Onex paid for the plant in June 2005 while leaving the investment firm a 58 percent ownership stake.

In addition, the IPO would raise $229 million in cash for Spirit. About $100 million of that will go to debt repayment; the rest will fund the cash portion of the payout to blue-collar workers, the filing said.

The payout to labor makes good economic sense for Spirit.

In a filing in August, the company said the wage and benefit cuts it achieved would save about $200 million annually, handily recovering the one-time $150 million cash payout to the blue-collar workers.

Spirit's executives and directors also stand to do very well when the company goes public.

According to the filing, Jeff Turner, former head of the Boeing plant and now chief executive of Spirit, received $3.4 million in salary and additional compensation last year, plus $1.3 million of stock that will vest in February and another $14.5 million worth of stock that will vest dependent on performance targets.

Another beneficiary is former congressman and House majority leader Richard Gephardt, who helped Onex negotiate with the Machinists union. Onex paid Gephardt $1.15 million for his union mediation role and made him a director in July 2005, with an allocation of 75,000 shares and an annual salary of $75,000, plus $5,000 per meeting. In December, he was granted 45,000 more shares, the filing said.

Boeing workers laid off at the time of the sale to Onex will get nothing from the equity plan. Neither will Spirit's white-collar workers, represented by the Society of Professional Engineering Employees in Aerospace (SPEEA).

"Our members will naturally be disappointed," said SPEEA spokesman Bill Dugovich. "We at the time pressed for no wage cuts and achieved that and were able to preserve benefits. That's the route our union took.

"But you have to congratulate them on a payout like this. It's good for the machinists and good for the Wichita economy."

SPEEA members in Wichita — about 600 engineers and 2,200 technical staff — will have the right to buy some stock at the offering price, he said.

The union is evaluating how big an opportunity that is, since it will depend on how the stock fares in the market after trading begins.

Spirit lost $90 million in 2005, the year of inception, but earned $52 million in the first six months of 2006.

In the years ahead, the prospects for this former Boeing unit look promising: It makes the cockpit and forward fuselage of the new Boeing 787. In April, it acquired a United Kingdom company that makes wings parts for Airbus.

The workers who were laid off have lost out. As work has picked up, Onex has hired mostly from the Boeing recall list — but except in a few cases not from among those it chose to cut last June, one worker said.

Dominic Gates: 206-464-2963 or dgates@seattletimes.com

Copyright © 2006 The Seattle Times Company

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