Chronicles of Casino Capitalism: Bankruptcy Bonuses

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It is impossible to know what to notice or be upset about any more. So I'll just follow a little thread I happen to be familiar with.

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- As mentioned two days ago, the Hawker Beechcraft company, based in Wichita, has filed for bankruptcy and is loaded up with debt after its takeover by Goldman Sachs / Onex. Thematic picture: Hawker Beechcraft jet that I saw for sale in Hong Kong last year, just before a group of eager Chinese customers stepped on board.

- A Chinese firm, Superior Aircraft of Beijing, is applying to spend $1.79 billion to buy the company -- maker of Hawker jets and the familiar Beech Bonanza, Baron, and King Air airplanes.

- Former Beechcraft employees say that part of the deal may be shedding pension obligations to workers in Wichita and elsewhere, or fobbing them onto the government's Pension Benefits Guaranty Corporation.

- BUT FORTUNATELY the deal will apparently include $5.3 million in bonuses for nine Hawker Beechcraft executives. At least according to LeveragedLoan.com. Great.

As I have argued at full book length, China's ambitions in this field offer a revealing look into the nature, strengths, and weaknesses of its system. The same is unfortunately true of ours. Does this remind you of anything else you're hearing about in the news?

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James Fallows is a national correspondent for The Atlantic and has written for the magazine since the late 1970s. He has reported extensively from outside the United States and once worked as President Carter's chief speechwriter. His latest book is China Airborne. More

James Fallows is based in Washington as a national correspondent for The Atlantic. He has worked for the magazine for nearly 30 years and in that time has also lived in Seattle, Berkeley, Austin, Tokyo, Kuala Lumpur, Shanghai, and Beijing. He was raised in Redlands, California, received his undergraduate degree in American history and literature from Harvard, and received a graduate degree in economics from Oxford as a Rhodes scholar. In addition to working for The Atlantic, he has spent two years as chief White House speechwriter for Jimmy Carter, two years as the editor of US News & World Report, and six months as a program designer at Microsoft. He is an instrument-rated private pilot. He is also now the chair in U.S. media at the U.S. Studies Centre at the University of Sydney, in Australia.

Fallows has been a finalist for the National Magazine Award five times and has won once; he has also won the American Book Award for nonfiction and a N.Y. Emmy award for the documentary series Doing Business in China. He was the founding chairman of the New America Foundation. His recent books Blind Into Baghdad (2006) and Postcards From Tomorrow Square (2009) are based on his writings for The Atlantic. His latest book is China Airborne. He is married to Deborah Fallows, author of the recent book Dreaming in Chinese. They have two married sons.

Fallows welcomes and frequently quotes from reader mail sent via the "Email" button below. Unless you specify otherwise, we consider any incoming mail available for possible quotation -- but not with the sender's real name unless you explicitly state that it may be used. If you are wondering why Fallows does not use a "Comments" field below his posts, please see previous explanations here and here.
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