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Archive for Monday, December 19, 2011

Fears about closure of Wichita Boeing plant return

December 19, 2011, 11:01 a.m. Updated December 19, 2011, 7:51 p.m.

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— Fears about the closure of Boeing Co.’s Wichita plant resurfaced Monday after a lawmaker’s comments that he had been told that modification work on Air Force refueling tankers will be done in Washington state, but Boeing says its study of all programs at the Kansas site is still going on.

Boeing won a decade-long fight for Pentagon approval to build 179 refueling tankers worth at least $35 billion, a project long touted as being able to create some 7,500 direct and indirect jobs in Kansas with an overall economic impact of $388 million.

“We now know that Boeing intends to walk away from that promise — which severely jeopardizes the future of over 2,000 aviation jobs right here in our community,” U.S. Rep. Mike Pompeo told reporters Monday.

No explanation was given for the decision, Pompeo said, and he declined to name the senior official at Boeing with whom he spoke.

Boeing had said last month it was studying whether to close the Wichita facility, which specializes in modifying commercial aircraft for military or government operations, in order to address Defense Department budget cuts. The company said Monday that the study was still going on and Boeing won’t make an announcement about any work moving elsewhere until late this year or early next year.

“Everybody is talking about the tanker work — all of the programs at the Wichita facility are part of the ongoing study,” said Jarrod Bartlett, a spokesman for Boeing in Wichita.

The facility has 2,100 employees and handles work on the Air Force executive fleet, bomber engineering and modification support and still has some work it is doing on an Italian refueling tanker, Bartlett said.

Boeing has had a facility in Wichita since it bought the Stearman Aircraft Co. in 1929. During World War II, employment at the plant peaked at more than 40,000 as the company churned out four bombers a day, Bartlett said. For decades the company remained the city’s largest employer.

In 2005, Boeing spun off its commercial aircraft operations in Kansas and Oklahoma. At that time, the company still had roughly 15,000 employees in Wichita. After the divestiture, Boeing retained 4,500 workers for its defense work in Wichita but layoffs since have slashed that remaining work force.

Slower federal military spending is affecting defense companies like Boeing. Several other defense companies have announced layoffs.

“The whole defense sector is going to remain under pressure for at least the next year or two,” said Brian Langenberg, a defense and aerospace analyst for Langenberg & Co.

Kansas lawmakers supported Boeing’s fight for the tanker, and the company seems to be risking alienating them by putting that work somewhere else.

Decisions like that are a trade-off, and Boeing has other members of Congress to think about, too, including a senior group that represents Washington State, Langenberg said.

Pompeo said it was also his understanding that Boeing intends to move maintenance work on Air Force One out of Wichita.

“If the KC-46 tanker is not built in Wichita, Kan., and the presidential aircraft moves to Kelly Air Force Base (in San Antonio) ... it becomes very difficult to imagine how Boeing would continue to keep the facility here,” he said.

Wichita Mayor Carl Brewer said the company made a commitment to the city.

“The discussion about the possibility of them moving someplace else and shutting down the complex that they have here is unacceptable,” Brewer said. “It is unacceptable because there was a commitment for future jobs, future work, the possibility of being able to take care of future families here in this community. We stood beside them and we expect them to stand beside us.”

Steve Rooney, president of the machinists union in Wichita, said Boeing officials told him during contract negotiations that if the facility were to remain open, the tanker work would be done in Wichita.

Wichita, which calls itself the “air capital of the world” is home to manufacturing plants for Spirit AeroSystems, Cessna Aircraft, Bombardier Aerospace and Hawker Beechcraft as well as more than a hundred smaller aircraft parts suppliers that support them. Now not only does the city stand to possibly lose the 7,500 direct and indirect aviation jobs that the refueling tanker work entailed, but the remaining jobs at the Boeing plant.

Union officials also questioned how the company can consider moving the work on presidential plane to Kelly Air Force Base, arguing that only Wichita has the numbers of workers with the necessary security clearances to work on it.

Bob Brewer, Wichita director for Society of Professional Engineering Employees in Aerospace, said he is disappointed Boeing is even considering closing the plant.

“This isn’t about today,” he said. “This is about the future of Wichita, the future of Kansas and the future of Boeing and the jobs that were promised to us.”

Comments

hyperinflate 2 years, 9 months ago

I know Pompeo is a freshman, but exactly how naive does one have to be to understand that when a cheap trick politician has finished the purpose for which he was "acquired", he will be cast away. But unfortunately the lesson is lost here, and somehow, some way this will end up being that Obama fellow's fault.

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1983Hawk 2 years, 9 months ago

Brownback, Roberts, Parkinson, Tiahrt -- virtually everyone who was anyone in either political party bent over to give Boeing every kind of federal, state, and local tax break and government subsidy known to man. And now everyone is up in arms because Boeing lied like a damn rug. Attention policymakers: if you are gonna give away the farm for (perceived) economic development, at least get a binding agreement in writing with clawback provisions. In other words, get a clue when shoveling the public's hard earned tax dollars at your big business buddies so there's at least some vague appearance of accountability for all the corporate welfare.

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Neomarxist123 2 years, 9 months ago

"shoveling the public's hard earned tax dollars at your big business buddies"

Letting a business keep more of what they earn is not shoveling money at them.

Solyndar, the auto union bailout - THAT is shoveling the public's hard earned tax dollars at your buddies.

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ignatius_j_reilly 2 years, 9 months ago

"Letting a business keep more of what they earn is not shoveling money at them."

Yes, it is, if they get to pay less legally required taxes that another business has to pay. It's government-endorsed favoritism, regardless of how you feel about the strategy or long-term effects.

How is a public bailout any different than a private company getting extra goodies from the government? Both Republicans A-N-D Democrats need to get out of bed with big business and let the free market drive growth.

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jhawkinsf 2 years, 9 months ago

"If they get to pay less legally required taxes..." Isn't that called a deduction or a loophole. It happens all the time. It's what makes it possible for GE to pay zero taxes one year. It's what makes it possible for a low wage earner to actually receive more back on their income tax return that they paid in. I'm just pointing it out. It sounded like you were saying that they were doing something illegal or immoral, when in fact they are doing what everyone else does, behave in their own best interests.

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kochmoney 2 years, 9 months ago

Because GE and a low wage earner are exactly the same, right? What GE is doing IS immoral, but it is not illegal. That's why we need lawmakers that corporations don't buy.

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jhawkinsf 2 years, 9 months ago

Your immoral may or may not be my immoral. However, yes, GE and the low wage earner are exactly the same in that they are behaving in ways that are perfectly legal. BTW - Another poster a while back said GE's tax return was 57,000 pages long. I wouldn't pretend that I've read it or understood it. If you have read it in it's entirety and you understand it completely, I'd be more than a little surprised.

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kochmoney 2 years, 9 months ago

My immoral very clearly isn't your immoral, which is why you're not getting my vote. Don't ask me again, Jhawkinsf.

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jhawkinsf 2 years, 9 months ago

We live in a very litigious society. If a company did the moral thing and paid millions in taxes that they were not legally obligated to pay, they would certainly open themselves up to a shareholder lawsuit. Publicly traded companies have a fiduciary responsibility to maximize profits. So a company like GE can do the moral thing and get sued or the immoral thing and pay no taxes. Remind me which of those two choices is better.

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kochmoney 2 years, 9 months ago

False dichotomy. The moral thing is to make their current tax structure illegal and remove their ability to financially motivate politicians to write tax code to their advantage. The investors couldn't sue for paying the taxes dictated by law. Which is why you're not getting my vote.

You're a foot shooter. Your business is never going to expand to GE levels, yet you repeatedly defend policies that allow it and other mega corps to have an unfair competitive advantage over you.

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ignatius_j_reilly 2 years, 9 months ago

"Isn't that called a deduction or a loophole. It happens all the time. It's what makes it possible for GE to pay zero taxes one year."

Yes, it happens all the time. (So does rape and murder.) I'll refer you to my comment that both Republicans and Democrats need to end this practice.

"It sounded like you were saying that they were doing something illegal or immoral, when in fact they are doing what everyone else does, behave in their own best interests."

My comment was in response to someone saying that cutting a large, out-of-state corporation a tax break was not "shoveling money at them," when it is. I don't think they're doing anything illegal at all -- again, I'll refer you to my comment that both Republicans and Democrats need to end this practice.

I try to limit how often I speak of morality, because I'm certainly no expert.

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1983Hawk 2 years, 9 months ago

Bzzzzt. You lose. But thanks for playing.

“Both tax exemptions and tax-deductibility are a form of subsidy that is administered through the tax system. A tax exemption has much the same effect as a cash grant to the organization of the amount of tax it would have to pay on its income.” Regan v. Taxation With Representation of Washington, 461 U.S. 540 (Written by Former Justice Rehnquist for a Unanimous Court)

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lucky_guy 2 years, 9 months ago

Welcome one and all to how big business is done in the 21st century. Boeing has work for Wichita but not until 2013 or 14. So Boeing wants to have the gullible, and slow witted Kansas congressional delegation as well as the taxpayers of Wichita and Kansas pay all the bills till the new work comes on line. This problem was always there because everyone that worked at Boeing in Wichita new about it. The surprise and anger is all for show, we will pay to keep Boeing around, the only question is how much. I am sure it will be around $40 million like what Wichita gave to Hawker Beechcraft to stay and guess what they are threatening to leave as well. This is what the "job creators" are now, can you spell "e-x-t-o-r-t-i-o-n."?

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kochmoney 2 years, 9 months ago

Exactly. Now the corporations get to host an auction to see which states will pay them the most to stay. Two years from now, they'll do the same thing all over. I say we get off this crazy train and work on ways to develop small businesses that don't have that sort of extortion power.

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sr80 2 years, 9 months ago

Anybody remember Boeing getting a 1st,2nd and third chance to beat Airbus for the tanker deal ? Knowing our fine set of pols in both sen. & house from Kansas,they probably lost to the other states ( i.e )Washington & Texas .

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imastinker 2 years, 9 months ago

I'm betting this is a direct result of the NRLB complaint.

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