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Archive for Thursday, December 23, 2010

State officials say keeping aircraft manufacturer Hawker Beechcraft in Kansas shows importance of higher education system

December 23, 2010

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— State officials say a deal keeping aircraft manufacturer Hawker Beechcraft in Kansas shows the importance of the state’s higher education system.

State officials gave Wichita-based Hawker Beechcraft a $40 million incentive package to stay in Kansas and retain at least 4,000 jobs over the next 10 years. A quarter of the package — $10 million — was in the form of tuition reimbursement and training for Hawker Beechcraft employees to attend the National Aviation Training Center at Wichita State University and other Kansas Regents institutions.

“We’re pleased that a key component of the incentive package was tuition reimbursement, as it underscores the critical role higher education plays in not only attracting new businesses to the state but also in retaining Kansas businesses,” said Kansas Board of Regents Chairman Gary Sherrer of Overland Park.

“Higher education is an economic engine, which is why a strong higher education system is so critically important to the future of our state,” Sherrer said.

Gov. Mark Parkinson, who announced the agreement, also praised the work-force training part of the package, saying it “will further solidify Wichita as having the best-trained aviation work force in the world.”

Their comments Tuesday came on the same day that Gov.-elect Sam Brownback pushed aside a proposal by the regents to increase higher education funding by $50 million next year. Part of the proposal would be linked to economic development in producing more engineering and health care professionals.

Higher education has been cut $100 million over the past two years as state revenues tanked during the recession.

But facing a projected $500 million budget deficit in the coming fiscal year, Brownback, a Republican, told the Lawrence Journal-World there is not enough money to fulfill the regents’ request.

The deal with Hawker Beechcraft, known mostly for producing business jets, was announced after months of negotiations prompted by news that Louisiana was trying to woo the company.

The remaining $30 million of the $40 million from the state will be in the form of bonds to purchase equipment or other business expenses. Those bonds will be paid off by employer withholding taxes. The city of Wichita and Sedgwick County kicked in a combined $5 million more in incentives, bringing the total deal to $45 million for Hawker Beechcraft.

Brownback, who takes office Jan. 10, issued a statement praising the deal.

“The implementation of this agreement will be a priority for my administration,” he said. He added, “I am committed to defending the Kansas aviation industry from other states and nations which have their sights on it and will fight fire with fire when necessary to ensure its continued success.”

Louisiana officials said they would continue talking with Hawker Beechcraft to locate some portion of the company’s operations to Baton Rouge, according to the Baton Rouge Advocate.

Gov. Bobby Jindal told the newspaper that he met with Hawker Beechcraft chief executive officer Bill Boisture before the Kansas announcement. Jindal said the company still wanted to consider Louisiana in the future. “This is an industry that we are going to continue to target for growth,” Jindal said.

Comments

jmadison 3 years, 12 months ago

What about the taxpayers who foot the $40 million incentive? The political class has an insatiable desire to extract money from the citizens.

dinglesmith 3 years, 12 months ago

Additional information would be really useful. How much revenue does the deal generate in taxes from Hawker? How much will the 4000 jobs generate in taxes for the state? This may be a great deal, but without that information there's no way to tell. If it generates less than it costs, it's foolish by any measure from any political party. If it generates more, it's great for Kansas.

I would also like to know how Brownback can oppose stimulus funding and praise this. The state government is paying Hawker $40M to stay in Kansas when we're staring a $500M deficit in the face. How is this different than running up the national debt to pay Wall Street companies? We're spending money that we simply don't have.

bilythompson 3 years, 11 months ago

You know what You guys should stop complaining because, one the health care we have now isnt as good as it was supposed to be. also the law has just been signed so give it some time. so if u want to say u have the right to choose tell that to ur congress men or state official. If you do not have insurance and need one You can find full medical coverage at the lowest price by searching online for "Wise Health Insurance" If you have health insurance and do not care about cost just be happy it and trust me you are not going to loose anything!

Lawrence_Pilot 3 years, 11 months ago

What are you talking about? There was no discussion of health care until your post.

just_another_bozo_on_this_bus 3 years, 11 months ago

This is a bassackwards arrangement. It should be the industries who rely on an educated workforce who pick up the tab for that education, not the state.

SouthWestKs 3 years, 11 months ago

Hawker/Beachcraft has 6000 employees now & will probably shed 2000 in August when the union contract is up.. So much for state help.. Looks like a win for Hawker/Beachcraft & a loss for the state..

Richard Heckler 3 years, 11 months ago

Beechcraft has been in Wichita for a very long time. This company has generated tons of dollars for this state,Sedgwick county and Wichita . This is the only justification for this help.

Unfortunately Beechcraft appears to have been taken over by tax dollar moochers who will play this card evermore frequently. Wichita should begin looking for other big industries or tons of smaller industries who will not be tax dollar moochers.

Brownback will be looking for tax dollar moochers which is very beltway thinking. Only one problem. If there is no money to support our public education system where is Brownback finding the money? Outstanding public education systems and higher education systems do attract industry.

I say Kansas should give up Bio Science and other corporate tax dollar moochers and make education THE PRIMARY industry of Kansas. This will polish the image of Kansas and it is one industry that keeps on truckin. It would also be good if the state would persuade wealthy university athletic departments to shovel some dollars into some academic funds for the financially challenged academic students.

Jimo 3 years, 11 months ago

Unfortunately making "education the primary industry of Kansas" is just another way of saying making the export of the educated the primary industry of Kansas, which it has been for some time.

Education is a necessary but not sufficient requirement for economic development. If a well-educated workforce, low taxes, and a "no regulation" attitude would attract industry, Kansas would be the center of American economic dynamism.

wheatridge 3 years, 11 months ago

Hawker-Beech like every other areospace company knows that the engineering talent needed is not in Kansas or the US for that matter. Just one American aerospace company could hire every US educated, engineering, graduate to replace the retiring boomers and still be lacking.The only educated work force with suffcient numbers is in India or China. Even the regulatory agencies are pushing the "show compliance" downward to self-regulation and audited processes. Additionally, domestic manufacturing wages are much higher when compared to the other workforce, it makes more sense to build off-shore; all the commercial aircraft manufaturing jobs will move as well. American firms will continue to mentor engineering and manufacturing jobs, domestic regulatory agencies will replace the "undue" travel burden with foreign certification agencies that have been trained with the needed skill sets. All of this money/assistance is just transitional until the infrastucture is in place off-shore. The first Chinese commercial aircraft, designed, manufactured, and certified using American expertise is due in 2012.

ksriver2010 3 years, 11 months ago

This misses the point. The tuition reimbursement is to retrain workers. Not many of them will be retained by Hawker. Only problem is that those workers would also have to leave Wichita to find a job.

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