Bombardier IRB contract lacked layoff safeguard

Bombardier Learjet (KSN File Photo)

WICHITA, Kansas – KSN continues to investigate how and why Bombardier Learjet can layoff 170 workers exactly one week after the Wichita City Council unanimously voted to provide the company with $52.7 million in Industrial Revenue Bonds, or IRBs.

KSN is questioning the city of Wichita about the safeguards it put in place with Bombardier, in the same contract that promised 450 jobs by 2018.

In light of this week’s layoffs, KSN wants to know why the Bombardier agreement does not have similar safeguards to the Hawker-Beechcraft agreement finalized in 2011. Mayor Carl Brewer explained the system of checks and balances that were in place.

“The rule was is if they dropped below, then we would prorate and we would pull dollars back if they fell below that particular number,” explained Mayor Brewer. “In this particular case, we’re talking primarily of just one program, a new program,” he continued.

KSN requested the 2011 contract. It clearly states: “If at the end of any year during the five-year pay-out period, HBC employs fewer than 4,000 workers, the subsequent incentive payment will be reduced proportionally.”

KSN also analyzed the agreement established in the council agenda last week between Wichita and Bombardier. In that agreement, the company has to bring in a set number of jobs, however, it does not specify how many employees the company has to have to keep the taxpayer money.

Mayor Brewer told KSN Wednesday that the agreement regarding Bombardier jobs specifically was made with the state of Kansas, not the city of Wichita. From there, we reached out to the Kansas Department of Commerce and asked to receive a copy of the contract.

On Thursday, we received an email response from KDOC that states that representatives will do their best to provide the documentation to KSN sometime on Friday, June 13.

The latest round of aviation layoffs were announced Tuesday. They will reportedly impact 100 permanent employees, as well as 70 contracted employees at Wichita’s Bombardier Learjet.

Bombardier confirmed that the layoffs are a result of delays in the new Lear 85 program.

Attitudes, regardless of the situation, remain optimistic.

“Production will happen and it’s not uncommon,” Brewer said. “We’re going to be delayed and we’re just making a readjustment in our business model… The jobs are not permanently gone.”

Richard Aboulafia, the Vice President of Analysis for Teal Group Aviation Corporation talked with KSN concerning the layoffs.

“It could very well be that in a few years, you do have a ramp up on jobs, it’s just that in the short run, they have to find every possible place to save money because of the company’s position,” said Aboulafia.

Bombardier insists the layoffs are due to delays in launching the Learjet 85.

Representatives tell KSN that production continues as scheduled, some of those jobs will return to Wichita.

Related Links:

KSN investigates Bombardier IRB agreement
Bombardier laying off 170 workers in Wichita
City Council approves Bombardier Learjet IRBs
Bombardier laying off 1,700

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