May 27, 2005 in Business

Onex will stick with Boeing-Wichita

Associated Press
 

WICHITA, Kan. — The proposed buyer of Boeing Co.’s commercial aircraft division in Wichita said Thursday it won’t back out of the deal after losing a key contract vote with the plant’s largest union, reversing an earlier statement that it would walk away.

Onex Corp.’s managing director Nigel Wright said in a statement he expects the company will complete its purchase of Boeing’s operations in Wichita, Tulsa and McAlester, Okla., by mid-June.

Investment firm Onex agreed earlier this year to buy the three plants for $900 million in cash and the assumption of $300 million in debt.

The sale is part of Boeing’s strategy to focus its commercial aircraft business on design and final assembly.

“Onex is firmly committed to this business,” Wright said. “The new company represents the only real option for new investment, new work, new jobs for those who choose to come with us, and greater job security for these communities and the families in them.”

Members of the Machinists union, which represents 5,300 of the plant’s 7,200 workers, voted down a contract proposal from Onex on Tuesday.

Onex had said it would walk away from the purchase if that contract failed.

Union members were critical of the contract, which called for a 10 percent pay cut and higher health insurance costs.

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