The Next AT-6 “Hail Mary”: The Saga Continues


02/09/2012 by Ed Timperlake

In an excellent piece of reporting Joseph C. Anselmo in Aviation Daily, on Wednesday February 8th 2012 reported an important breaking news story about another huge management shake-up at Hawker Beechcraft.

“Robert S. “Steve” Miller was appointed CEO on Feb. 7, replacing longtime chief executive Bill Boisture, who will remain as chairman of the company’s operating subsidiary, Hawker Beechcraft Corp. Miller, the chairman of AIG, has more than three decades of experience as a senior executive at Chrysler, Ford, Delphi, Bethlehem Steel and Waste Management.”

The story also points out that Steve Miller is an “aviation buff who earned his pilots license at 16.” There is no mention of his military service, but Steve Miller is extremely well educated and has extensive industry and financial experience; he calls himself “The Turnaround Kid.”

This Kansas earthquake comes right after Hawker Beechcraft Defense just removed their President. Jim Maslowski, President of Hawker Beechcraft Defense Company retired from the company. President Maslowski is also a retired Rear Admiral USN and former Blue Angel.

Bill Boisture is now being replaced as Chief Executive Officer by Robert “Steve” Miller. Bill Boisture is a graduate of the US Air Force Academy, USAF Fighter Weapons School and USN “Top Gun” school.  He is a seasoned defense industry veteran.

Hawker Beechcraft is in a fight for survival and has been have pursued winning the LAS competition even after normal channels have been exhausted after losing, rather than bowing out gracefully and let the USAF support US troops in combat.  HBC seemed to game the USAF solicitation for a Light Attack (LAS) aircraft for the Afghan Army Air Force by submitting a developmental non-production ready AT-6, in spite of clear RFP requirements for a NON-development PRODUCTION ready LAS aircraft.

In being thrown out of the competition, HBC then initiated a lawsuit to reverse the USAF selection of the SuperTucano. The GAO validated the USAF decision, but even this was not enough for Hawker Beechcraft.

Not only have the leadership of HBC challenged the integrity of the Air Force and GAO and are now carrying their fight to Congress with significant tones of anti-foreign Brazil bashing.  Something hardly helpful to the President’s export agenda, as Brazil has just surpassed the United Kingdom as the 6th largest global economy.

Trying to get Congressman to involve themselves on one side of a Federal court case is a very silly and rookie Hill maneuver. Even more amazing the owners of HBC, which are Goldman Sachs and Onyx, a Canadian firm, apparently want to do international financial deals. Insulting Brazil in the midst of a fighter down select, while the Boeing  F/A-18 is fighting for its life in the global market, seems a bit miscalculated as well.

Continuing with the AvWeek report—“He (‘the turnaround kid’-ed) said that Hawker Beechcraft “absolutely” could survive as a stand-alone company and dismissed speculation that its private owners–Canadian investment firm Onex Corp. and Goldman Sachs, which paid a top-of the- market price of $3.3 billion five years ago–might sell off the civil side of the company to a Chinese entity.

The biggest red flag is when “the turnaround kid” is quoted as saying— “There is no plan in my kit bag here to sell this company or any of its pieces,” Miller said. “You can never say never, but China is principally of interest to me because it’s a great and growing market.”

Watch out!

America has been here before.

The history of this type of activity with the Peoples Republic of China has not been kind to the American worker and our Defense Industrial Base. Joint Ventures with allies and fellow democracies have tremendous potential, but with the PRC absolutely not.

American workers are always caught in the middle between Investment Banking “deal making ” and PRC scamming and have over time learned some very hard lessons.

One egregious and famous example is the loss of an entire factory.

On August 24th 1993, Chinese Officials walked into a McDonnell Douglas managed defense plant in Columbus Ohio. The plant had giant computer-controlled strategic machine tools. It built parts for the Minuteman missile, F-15 Fighter and C-17 airlifter. Needless to say the workers tried to block the PLA visitors with overturned tables and filing cabinets. All future PLA site surveys were scheduled for Sunday when the plant was shut down. But the deal went through and the tools were shipped to China.

Ultimately, everyone lost McD and the workers are both gone except of course the PRC who won because the machine tools wound up in PLA military factories.

Consequently, when the PRC makes overtures for joint ventures American national security can be put at risk, industrial base jobs will be lost and dual use technology compromised.

Let me put forward a hypothesis.The danger to American national security, and sadly perhaps the true reason that HBC is so desperate to get the AT-6 ownership in the hands of the Afghan Army AF is that the AT-6 product line will then have huge value to China.

This is because most if not all ITAR (International Traffic in Arms Regulations) restrictions will have been overcome and perhaps any Military List (ML) and any even remotely possible Commerce Control List (CCL) objections will also be satisfactorily addressed.  The entire AT-6 product line, from design, manufacturing to finished product could all go up for sale.

It is pure speculation but a premium price sale to the PRC would allow Goldman and Onyx to get out from under their  $3.3 Billion investment.

And the saga continues.