Shawn Vick and Hawker Beechcraft come out fighting
Shawn Vick, Hawker Beechcraft’s executive vice president for customers, is a fighter. And he came into EBACE ready to fight back.
Whilst Cessna and Bombardier launched new aircraft, Vick (pictured above) and Hawker Beechcraft announced more sales than any other manufacturer.
With the president and chairman of Hawker tied up with restructuring (and rumoured to be meeting potential buyers), Vick had the tough job of selling the benefits of his company’s Chapter 11 filing to Europeans that associate bankruptcy protection with liquidation.
His overall message is that by eliminating $2.5 billion in debt the company has been strengthened for the future.
Vick is right saying this. As a professional he also refused to criticise Onex and Goldman Sachs for overleveraging the company pointing out that in 2007 the company had $4.6 billion in assets and a $6 billion background.
“No organisation chooses to go down the Chapter 11 route without significant consideration,” says Vick. “However it was the right thing to do to address the debt that was impairing the business.”
He says that in December 2011 it became clear that the debt was becoming unsustainable – particularly the balloon payments due in 2013 – and the company began to look at Chapter 11 seriously. Five months later, Vick now says the company hopes to leave bankruptcy protection by December 2012.
One criticism of Hawker Beechcraft is that the management team has tried to make too many significant changes too quickly – partly driven by the debt overhanging them. Changes included implementing a new SAP operating system; redesigning the manufacturing process, outsourcing – where he says – cost and quality objectives could be met, cutting supply chain costs, investing in new service facilities and parts logistics infrastructure and changing customer services.
Problems with SAP implementation delayed billing for the services business and the publication of Hawker Beechcraft’s annual results.
“I have been associated with other SAP implementations and business transformation is always hard work,” says Vick. “But it was necessary. Under Bill Boisture’s visionary leadership we have done everything we could to improve the business and we had to make these changes.”
Splitting Hawker and Beechcraft
Vick dismisses the business plan options included in the bankruptcy filing as an exercise. He believes that Hawker and Beechcraft can be successful by staying together.
“Too much has been made of those options in the filing. It was a modelling exercise outlining potential alternatives. It was just to provide a view of the variety of options that could be available and should not be taken out of context,” says Vick.
He was unable to answer detailed questions about it without the document.
“A lot of speculation – nearly all wrong – has taken place,” says Vick. “The Hawker 4000 is a spectacular flying machine. We have announced more operators and more orders at this show.”
He is clearly worried about how the press is reporting on Hawker Beechcraft. “It does not impact me, but I do worry about the 6,000 exceptional people we employ who are building world class products,” he says.
Building a great company
Vick joined Hawker Beechcraft in 2009. Having held senior roles at British Aerospace, Gulfstream, Bombardier Aerospace and Landmark Aviation, as well as advising private equity firms, he understood challenges the company faced during the downcycle. He says he has no regrets about joining and is optimistic for the future.
“No one enjoys Chapter 11 but I love my job immensely,” says Vick. “We are very simply taking the steps that are necessary for us to emerge out of bankruptcy protection and as a strong, profitable company.”
Despite all of the noise surrounding Chapter 11, Vick is keen to stress that business is going on and customers are still his main focus.
He says: “Everything you do to build a great company is everything you do to build a company’s value.”
And with that he heads off to keep Hawker Beechcraft running and keep fighting on.