A major economic disaster for the employees was narrowly averted last week when Alabama Aircraft Industries sold out of bankruptcy to new owner Kaiser Group Holdings.
"We came to an agreement on Sept. 8," President Ron Aramini said. "We were set to run out of cash on Sept. 9, and it was unlikely the bankruptcy court would have allowed us to tap additional reserves of cash collateral."
That, Aramini said, would have meant padlocking the doors at the offices and hangars at the Birmingham-Shuttlesworth International Airport where legions of workers have repaired and refurbished military planes since the 1950s.
The new owners have retained about 118 of the 325 workers who were left at the end. It has been a rough road for them. Their union is gone and their ranks culled: The United Auto Workers collective bargaining agreement was terminated during the bankruptcy case, and the payroll has plunged from as high as 1,500 people in recent years.
Jobs at Alabama Aircraft -- earlier called Pemco Aeroplex and Hayes Aircraft -- were lifetime gigs for many people, with wages in recent years of almost $20 an hour. Now, only three military planes occupy the vast hangars, tended to by teams of a few dozen people who strip paint, rewire cockpits and replace rivets. In recent years, the bays and tarmacs overflowed with work -- KC-135 aerial refueling tankers, C-130 transport planes, Navy P-3 Orion patrol craft.
It all changed in 2007, when Boeing Co. won -- unfairly won, according to Alabama Aircraft -- a lucrative Air Force contract. The company struggled from then on, as payment for the last planes under the old contract drew to an end.
Hope still remains. The company has a new name, Kaiser Aircraft Industries. The new owner is an asset-rich holding company run by Wall Street veterans. Better still, Aramini said, Kaiser Group has directed him to aggressively pursue new contracts -- both military and civilian.
"Our hope is to again employ up to 1,500 people here again," Aramini said. "We want to be a big part of the community."
The company has concentrated on military aircraft at the Birmingham airport, not commercial planes. Years ago, a since sold-off subsidiary did such commercial work in Dothan. It is a super-tough, competitive business with lots of players looking to impress airline executives with cheaper and faster maintenance.
"We did it at Dothan and we can do it again," said Aramini, whose last job before joining Alabama Aircraft in 2000 was as operations vice president for America West Airlines. "We brought in Northwest, we brought in Delta and we brought in Southwest."
Whatever work comes in -- an Army contract for maintaining combat helicopters is high on the wish list -- it will be done by nonunion labor. The company and predecessors had long been subject to a collective bargaining agreement with the United Autoworkers covering hourly workers.
The union was a key point for the employees. There was an eight-month strike that ended in early 1997, over wages and job security, that included several picket line arrests, temporary workers brought in to cross the line, and allegations of petty sabotage such as slashed tires.
It is all gone now. Alabama Aircraft filed for bankruptcy protection in February, citing financial losses that kept it from contributing to the union pension plan to the tune of $70 million in back payments. The company asked the bankruptcy court to terminate the union contract, citing imminent danger of collapse. The court acceded with the request a few months ago.
"One thing we had to do to get more competitive was to get rid of certain restrictions of the collective bargaining agreement," Aramini said.
It is the sort of talk that union supporters detest. But Aramini said lower health-care and benefit costs and the disappearance of restrictions on using outside contractors for some in-plant work will make all the difference. Wages and medical benefits are about the same as before for hourly workers, Aramini said, while union work rules on who can perform what task are no more.
Attempts to reach officials with the UAW were unsuccessful.
The sale to Kaiser Group -- a holding company whose assets are mostly stakes in other firms and investment funds -- was opposed by both the Birmingham Airport Authority and former joint venture partner Boeing Co., the second-largest defense contractor in the country. The airport, Aramini said, later dropped its opposition.
Litigation with Boeing is ongoing, with the bankruptcy estate saying the Chicago-based company stole trade secrets and withheld joint-venture information and payments to win a $1.1 billion KC-125 contract in 2007.
Proceeds from the litigation, if any, would go to creditors, who include an investment fund run by a director of Kaiser Group, Michael Tennenbaum, a veteran Wall Street investor. One of his funds bought $2.5 million of Alabama Aircraft bonds.
Such concerns are far from the hangars at the airport, Aramini said, and are now for the lawyers to worry about.
"Our intent is to move forward," he said. "There is more than 50 years of history here, and we fully intend to not only build on that, but to develop and improve."