Boeing To Shut Down Wichita Plant
WICHITA, Kan. (AP/CBS Seattle) – The Boeing Co., for decades the brand that helped support Wichita’s claim as the aviation capital of the world, announced Wednesday it will shut down facilities in the city by the end of 2013 and send work to plants in three other states as it deals with defense spending cutbacks.
The Associated Press reports that the closure will cost 2,160 workers their jobs and end the firm’s presence in an area where it has been a major employer for generations, but Boeing tells CBS Seattle that the number is incorrect.
“We don’t know how many layoffs we will have right now,” Boeing spokesman Forrest Gossett told CBS Seattle, adding that employees at the Wichita plant will be offered jobs to the relocated sites at Oklahoma City or San Antonio.
The decision was not a surprise because Boeing said in November it was looking at closing the Wichita plant. But it still drew an angry response from Kansas lawmakers who helped Boeing land a lucrative Air Force refueling tanker project in February and had expected thousands of jobs to come to Wichita with it. Instead, the tanker work will go to Boeing’s facilities near Seattle.
“Boeing’s announcement is that things have changed,” U.S. Sen. Jerry Moran said. “Well, the only thing that really has changed in my mind in the last year is Boeing now has the contract. When they made the commitments, they didn’t.”
Mark Bass, a Boeing vice president, said the market for defense work has changed dramatically in the past 18 months and the Wichita facility wasn’t competitive because of its size and high labor costs. The site includes 97 buildings with 2 million square feet.
Bass declined to say how much the company expected to save by moving the work elsewhere.
Wichita had hoped the number of jobs at the facility would grow after Boeing won the contract worth at least $35 billion to build 179 Air Force refueling tankers. Modification work on the planes was expected to generate 7,500 direct and indirect jobs with an overall economic impact of nearly $390 million.
Boeing said 24 Kansas-based suppliers for the refueling tanker project will still provide parts as planned.
The first layoffs in Wichita are expected in the second half of 2012. While the Seattle area will build the tankers and handle their modifications, engineering work will move to Oklahoma City and future aircraft maintenance, modification and support will go to San Antonio, Texas.
The three states combined could pick up as many as 1,400 jobs, with Oklahoma City gaining 800 and San Antonio getting 300 to 400. The Seattle area will add 200 tanker construction jobs but about 100 support positions from there will move to Oklahoma City in the shuffle, Bass said. Wichita workers will be allowed to apply for jobs in the other locations.
Boeing said it will continue to have a significant impact on the Kansas economy and its aerospace industry. The Chicago-based company spent more than $3.2 billion with 475 Kansas suppliers last year. Kansas is the fourth largest state in its supplier network.
But that wasn’t enough for lawmakers like U.S. Sen. Pat Roberts of Kansas, who said Boeing had promised as recently as February to remain in Wichita if it received the tanker contract. Roberts and others urged the company to reconsider.
Moran called Boeing’s move “a blow to our mental health as well as our pocketbooks.” Kansas officials are still willing to do what it takes to keep the Boeing plant open, but “it’s difficult to negotiate with someone who hasn’t kept their word,” he said.
Republican Gov. Sam Brownback promised Kansas will pursue opportunities in commercial aircraft manufacturing. Aircraft makers like Cessna Aircraft Co., Hawker Beechcraft and Bombardier still have plants in Wichita, which Brownback said remains “the best place in the world to build airplanes.”
Kansas Democratic Party chair Joan Wagnon said the decision shows that throwing money at wealthy corporations doesn’t guarantee loyalty or longevity.
“Despite all the economic incentives and tax breaks, of which there were many, and despite the loyalty of Boeing’s workers and its long history in Kansas, Boeing turned its back on a community and a state that supported the corporation generously through tough times,” Wagnon said.
But the news was welcomed elsewhere.
“The decision of the Boeing Company to move tanker work to Washington is bitter-sweet,” said Everett Mayor Ray Stephenson, noting Wichita Mayor Carl Brewer’s support for an American-made tanker. “I was grateful for his support and am saddened for the workers and families in Wichita. That said, Everett stands ready to support additional aerospace work in the Puget Sound region.”
Brewer, who once worked for Boeing, said the disappointment in Boeing’s decision to abandon its 80-year relationship with Wichita and Kansas “will not diminish anytime soon.” The city, county and state have invested too many taxpayer dollars in Boeing to take the announcement lightly, he said.
Boeing has had a facility in Wichita since it bought the Stearman Aircraft Co. in 1929.
Employment at the plant peaked during World War II, when its 40,000 workers included President Barack Obama’s grandmother Madelyn Dunham, who worked the night shift as a supervisor on the B-29 bomber assembly line.
The company remained Wichita’s largest employer for decades after the war.
It still had about 15,000 workers in the city in 2005, when it spun off its commercial aircraft operations in Kansas and Oklahoma. After the divestiture, Boeing kept 4,500 workers for its defense work in Wichita but layoffs have since slashed that number.
Spirit AeroSystems, which took over Boeing’s commercial aircraft operations, still makes parts for Boeing in Wichita.
Jeremy Hill, director of Wichita State University’s Center for Economic Development and Business Research, said most Boeing workers are likely to stay in the area and find other jobs. But the company’s departure is a psychological blow.
“It was something that was very important to people here, something they recognized, something they would tell other people when they came and visited,” Hill said. “Boeing has that name that’s household and recognized, and it had a value to people when they promote the area.”
(TM and © Copyright 2012 CBS Radio Inc. and its relevant subsidiaries. CBS RADIO and EYE Logo TM and Copyright 2012 CBS Broadcasting Inc. Used under license. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. The Associated Press contributed to this report.)