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Archive for Wednesday, January 4, 2012

2,100 jobs lost as Boeing announces plan to shut down operations in Wichita by 2013

January 4, 2012, 10:50 a.m. Updated January 4, 2012, 11:24 a.m.

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— Faced with defense budget reductions, the Boeing Co. announced Wednesday it will close its defense plant in Wichita by the end of 2013.

The closure will cost more than 2,160 workers their jobs and end the firm's presence in a city where it has been a major employer for generations.

The decision was not entirely unexpected. The company said in November it was studying whether to close the Wichita facility, which specializes in modifying commercial aircraft for military or government operations, to address Defense Department budget cuts. The first layoffs are expected to begin in the third quarter of 2012.

The company said it was moving future aircraft maintenance, modification and support to its plant in San Antonio, Texas, and engineering work to Oklahoma City. Work on the Air Force refueling tanker will be performed in Puget Sound, Wash. The company said the 24 Kansas suppliers on that program will continue to provide parts as originally planned.

"In this time of defense budget reductions, as well as shifting customer priorities, Boeing has decided to close its operations in Wichita to reduce costs, increase efficiencies, and drive competitiveness," said Mark Bass, vice president and general manager for the Boeing Defense, Space & Security facility in Wichita.

The study came even as the Pentagon had been working to prevent $500 billion in automatic, across-the-board defense budget cuts over 10 years in the wake of the failure by a bipartisan congressional supercommittee to agree on $1.2 trillion or more in deficit reductions.

Wichita had hoped the number of jobs at the facility would grow after Boeing won a contract worth at least $35 billion to build 179 Air Force refueling tankers. The modification work on the planes had been expected to be done at Boeing's Wichita plant — bringing with it 7,500 direct and indirect jobs with an overall economic impact of nearly $390 million.

Wichita Mayor Carl Brewer said the city, which prides itself as being the air capital of the world, has a long history with Boeing in the community. Brewer noted he worked there for 20 years before the company sold off its commercial operations.

"Many people — generations upon generations — have had an opportunity to be employed there and that could very easily be the end of that ... They are a very important part of us here," Brewer said.

But the mayor said the city would move on and take care of those families and continue working to be the "air capital of the world."

"This is not the first time we have had something of this magnitude. We have had other challenges and we have always managed to work through it and been able to survive," Brewer 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. For decades the company remained the city's largest employer.

Then 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 workforce.

The Wichita facility is facing the end of some programs, such as the international tanker program that supplied refueling tankers to other countries. Over the summer, Boeing announced it would cut 225 jobs at its Wichita defense plant through the end of this year.

Even with the loss of the defense plant, Boeing would continue to have an economic impact in this aircraft manufacturing city. Spirit AeroSystems, which took over Boeing's commercial operations, continues to build parts here for Boeing's commercial airplanes.

"But it would be different to a certain extent because of the fact that, you know, it is kind of like family that you actually have and a member of the family is moving away," Brewer said. "So there is a lot of emotional and economic attachment tied to this."

Comments

Gandalf 2 years, 11 months ago

Evilsam's policies are really fixing the Kansas economy! Hope the people in Wichita remember that come November! It's amazing what just 1 year of rightwing conservative rule can do.

Can't even really blame Boeing either. What hi-teck company would want to do business in a state led by a governor determined to dumb down the population and doesn't believe in science?

1southernjayhawk 2 years, 11 months ago

this has nothing whatsoever to do with brownback or his policies regardless of what your very small, narrow mind believes.

FlawontheKaw 2 years, 11 months ago

You are wrong 1south. This has absolutely everything to do with muscular sam and his "policies" (I use the term loosely). If you recall, scammy is the governor of this state. He must take responsibility for running this state into the ground. If, as you claim, it is not brownie then it is Roberts. Your choice.

And hey Gandalf lookout. Someone is in your head trying to take control of your mind.

Take_a_letter_Maria 2 years, 11 months ago

That's 2100 just at Boeing. You also have to take into account those at Hawker and Raytheon in Wichita that will feel the effect of this closing.

sourpuss 2 years, 11 months ago

All those houses hitting the market when people move to Texas and Washington to follow the jobs will depress housing values. Retail revenue will fall off as jobs leave leaving car dealers with more inventory, stores with more stock. The school district will lose students... across the board effects.

Godot 2 years, 11 months ago

One more win for the Obama administration.. Another manufacturer leaves a right-to-work state.

asixbury 2 years, 11 months ago

???? What are talking about? This has nothing to do with the Obama administration.

jafs 2 years, 11 months ago

Actually, it does.

The reason Boeing is shutting down plants is because of reductions in defense spending at the national level.

jafs 2 years, 11 months ago

Then they're just lying when they say it was done to address department of defense cuts, I guess.

kochmoney 2 years, 11 months ago

Who took the debt ceiling hostage to enact that legislation?

jafs 2 years, 11 months ago

Many people agree that defense spending should be cut, especially Democrats.

Just like any other cuts in spending, that will affect people, and likely result in the loss of jobs.

It's a real problem, and I have no easy solution.

But, according to Gandalf, they aren't even losing any government money at all - I don't know what the truth is there.

optimist 2 years, 11 months ago

It has everything to do with the Obama administration. It is directly related to his lack of leadership and the inability of his party to pass a budget even when they held a filibuster-proof majority in both houses. We have an absolute lack of leadership in both political parties, especially at the federal level. Stop being a Kool-Aid drinker. The federal government is inept, bloated and ultimately destroying this country. Both parties are at fault for this decline but Obama is the President and the buck stops with him. That's what leadership means, whether he accepts the responsibility or not.

asixbury 2 years, 11 months ago

They're not shutting down completely, they're relocating. This has way more to do with Corporate GREED then Obama. The republicans' childish behavior is why nothing can be passed. They go against anything Obama's administration suggests, just to cause problems. Looks like that plan backfired with the tax-cut deadline, huh? By the way, I'm neither democrat nor republican. I go with whichever party has, in my view, the best plan for our country.

kochmoney 2 years, 11 months ago

Gosh, and here I thought the union-busting tactic of being right-to-work would make the jobs just come flooding in.

BigDog 2 years, 11 months ago

Gandalf .... Can you name the policies of the governor that you believe caused this decision?

Cant_have_it_both_ways 2 years, 11 months ago

It is much cheaper to stay than to retool a new factory or augment one already in operation. I would guess that the laws and/or taxes in this state are less favorable than those in Texas and in Oklahoma. Survival is the top priority for both families and businesses. There is something they need that they can't get by staying in Kansas.

Now, if only half the population pays taxes and the other half mooches, then I would guess there is no money to cut corporate taxes to allow these corporations to compete with corporations like Airbus. We are a victim of our own laws and laziness.

gudpoynt 2 years, 11 months ago

Yep. Boeing just made a bunch of Kansans lazy, while making a bunch more in Texas, Oklahoma, and puget sound un-lazy.

Weird how a huge corporation taking tens of billions of taxpayer dollars through government contracts, and then tens of millions more in tax break goodies (with the rest of us picking up the slack) has the power to make, or unmake, laziness within individuals.

I imagine that the cognitive dissonance among right wing Boeing employees in Wichita, being paid indirectly by government contract, was ameliorated somewhat by the fact that their government contract was with the DOD -- the conservative's favorite gov't dept.

But now that cuts in gov't spending have lead to a private sector job creator to fire them and thousands of others, in a right to work state... I worry for their sanity.

Ockhams_Razor 2 years, 11 months ago

Perry stays in the race, so while the state loses one of its largest employers, Sammy can continue to help his Texas buddy by campaigning in New Hampshire, making his phone calls, raising the money.

asixbury 2 years, 11 months ago

Corporate greed strikes again. Why am I not surprised? Big corporations don't give a damn about the people whose lives they affect, only their pocket books. Wichita will now start dying off as its population moves elsewhere to find jobs.

yourworstnightmare 2 years, 11 months ago

Not to worry. The Government does not and cannot create jobs, so everything will be fine.

yourworstnightmare 2 years, 11 months ago

Is anyone surprised that a corporation would make promises and then break them only weeks later?

Boeing is in the business of making money. It is not in the business of supplying jobs to Kansas.

The sooner we all realize that the only goal of business and corporations is to make money, the better off we will be in the future.

Corporations are not "job creators". They are "revenue creators".

Providing jobs is a necessary evil to the corporation, an expense, that takes away from their bottom line but that are sometimes necessary in order to turn a profit.

gatekeeper 2 years, 11 months ago

This attitude is what is wrong with this country. Greed on any level is not good. Yes, a corporations goal is to make money, but it shouldn't be at the expense of loyal employees. Greed and abuse of labor is what led to the fomation of unions. What do the repubs try to do? They try to take down the unions.

I remember years ago when companies valued employees, provided them with good pay and benefits and appreciated them for their service. I am lucky that I work for a company that has this philosophy. This company grew 28% last year and is on track to top that this year. We aren't talking small change here - $50 million + in sales. Hmmmm, a company that takes care of it's employees, treats them as a valuable part of the company and shares revenues. We have very little turn over here. All these greedy corporations need to return to the old work values and treat their employees well. In the long run, these companies end up being more sound because happy employees are harder working employees.

just_another_bozo_on_this_bus 2 years, 11 months ago

This is a good sign. I hope we see even greater cuts in military spending over the next few years-- an 80% cut would be about right.

This will free up both the money and the skilled work force to do something that's actually useful.

just_another_bozo_on_this_bus 2 years, 11 months ago

Yes, I know it's little more than a shell-game. It's a shot across the bow to warn porkbarrel-loving politicians that if they don't continue to supply companies like Boeing with endless corporate welfare, it'll be a plant in their home district that gets shut down next.

Take_a_letter_Maria 2 years, 11 months ago

except for those two weeks when the state fair is being held in Hutch.

hyperinflate 2 years, 11 months ago

It has been the undisputed Trans-Camaro capital of the world for a good long time.

beatrice 2 years, 11 months ago

The company said it was moving future aircraft maintenance, modification and support to its plant in San Antonio, Texas"

Now Brownback can tell people on the campaign trail about all of the jobs Governor Perry keeps adding to Texas.

"oops."

blindrabbit 2 years, 11 months ago

What happened to all of our influence, have our Reich-wing Repubs. lost all of their clout. As the group "Kansas" sang years ago it's all "Dust in the Wind". Sammy, Mikie, Jerry and Pat cannot deliver, even with the help of the Koch's.

Bob Forer 2 years, 11 months ago

This is a lot worse than losing 2,100 jobs. We just lost 2,100 well-paying jobs. Once again, Brownback and his Talibanesque band of socially right wing nut jobs have failed the people of Kansas.

This one is really gonna hurt the Kansas economy. Big time.

Ockhams_Razor 2 years, 11 months ago

Sammy's job charts at his press conferences will count a temporary job created at McDonalds as the same as one of these well-paying jobs that supports entire families.

He is skilled in smoke-and-mirrors presentations.

tolawdjk 2 years, 11 months ago

I was just thinking that maybe Perry could give Sammy something like 4200 Carl's Jr. jobs for Wichita to help offset the losses.

Running a fry machine really isn't that much different than running a riveter, right?

William Weissbeck 2 years, 11 months ago

I'd love to know the back story on this. Part of me says Wichita was the trade off to keep the non-union plant in SC, but expand in the state of Washington. Part of me says that this is just corporations doing what they do by consolidating to more attractive, larger metro areas like San Antonio. Not sure where Oklahoma City falls in this picture, but they do have an NBA team. Even if taxes are lower elsewhere, the labor, commercial and residential property costs are likely higher. If your plan is to flyover "flyover country," you don't need to build the planes there.

ccp 2 years, 11 months ago

Oklahoma City has done an excellent job at reinventing itself. Pro basketball, pro hockey, Bricktown...It's becoming downright San Antonio-like. Ten years ago, I dreaded going there to visit my family. Now there's so much to do, we look forward to the trips.

FlawontheKaw 2 years, 11 months ago

No way! OKC is the sphincter of the midwest. Of course most sphincters do have much to do these days.

lucky_guy 2 years, 11 months ago

Wichita knew this would happen. Hawker-Beech is out too. Wichita will only have Spirit, Cessna, and whatever is left of LearJet. They can plow up the runways and try to sell the land wheat and soybeans, since land prices are up. But there will be alot of people looking for work coming up here so hold on to your real estate, it could be more valuable if the refugees can find any work.

woodscolt 2 years, 11 months ago

"The company said it was moving future aircraft maintenance, modification and support to its plant in San Antonio, Texas, and engineering work to Oklahoma City. Work on the Air Force refueling tanker will be performed in Puget Sound, Wash. The company said the 24 Kansas suppliers on that program will continue to provide parts as originally planned."

You might try reading the article ,peeman. of coarse, that would debunk your fairytale but Nice try anyway.

woodscolt 2 years, 11 months ago

Hey, the private sector made a decision to consolidate and save some money. Capitalism at work.

blindrabbit 2 years, 11 months ago

Oklahoma City re-invented itself with mucho dinero from the Feds. to compensate with the bombing at the Murrah Building. But, do agree, it's a fun place to visit now! Maybe getting ready to become the major city as the Big 12 moves away from it's Kansas City roots, thanks to Missouri re-connecting with it's Confederate roots.

woodscolt 2 years, 11 months ago

Can you name one regulation that obama is responsible for that caused this private company to make internal decisions to consolidate and save their stockholders some money. Nope, didn't think so. Just more mindless thoughtless chatter from rock.

gatekeeper 2 years, 11 months ago

Funny, considering Bush spent more time golfing and clearing brush than being President.

Steve Jacob 2 years, 11 months ago

Lots of pointing fingers here. People want government spending cuts, you don't think that will hurt local economies?

guess_again 2 years, 11 months ago

A list of recent tax give-aways to Boeing from the state legislature. This included allowing Boeing to keep the state taxes paid by all of its employees:

http://t.co/Q4rSoRzh

jniebaum 2 years, 11 months ago

Net profit for Boeing for 2010 exceeded $3.3 billion. Executive compensation for the Boeing CEO exceeds $20 million annually. They have had net profit of more than $1 billion annually in all but one of the last 10 years. Perhaps they just need more tax breaks, and then the job creation would be astounding.

John Spencer 2 years, 11 months ago

I wonder if we can reverse the tax incentives, and get sometihng out of it?

Liberty275 2 years, 11 months ago

LOL If the obama housing bust ever eases up, we will be off to the coast. You people can have this boring hick state.

I don't blame Boeing for getting out.

gatekeeper 2 years, 11 months ago

Unless you're rich, have fun trying to afford a house on the coast. That $150K house in KS is $800K out west and about $500K out east. My sister just moved from LA to Denver. Sold her house for almost $900K (a 3 bedroom, 2 bath ranch house) and is buying a huge house with tons of land outside of Denver. Unless you already have the funds saved, it's very hard to afford moving to the coasts. It seems like more people are now leaving the coasts and moving to more affordable areas.

jafs 2 years, 11 months ago

He's said a few times that he was waiting for a hurricane, so he could pick up some cheap real estate in Florida.

But we had that, and he's still here.

My guess is that he'll still be here for a while, and by the time prices have gone up enough here to satisfy him, he won't be able to find that cheap stuff on the coast anymore.

Liberty275 2 years, 11 months ago

"My guess is that he'll still be here for a while"

Jafs is right on both accounts. We can't leave because the clown in cheif can't fix the economy so house prices are depressed. When the next boom hits, we will sell because I want a good $100,000 to swoop in after a hurricane and buy from someone traumatized and willing to do anything to get away from any other storms. I know I can't afford a beach house, but we should be able to score a house a mile or two from the beach... and a mile or two from real fishing and not this fishing for bait-sized fish in Kansas.

We can wait. Life at home is good, but it would be nice to live somewhere you don't have to drive 100 miles to do something interesting.

jafs 2 years, 11 months ago

Hi.

Glad I got it right :-)

I'd suggest you re-think your plan - waiting for the next real estate boom will be a long wait. And, there's no guarantee that nature will oblige with a hurricane for you at the right time.

In previous posts, you've seemed to be extremely unhappy here as well - if that's the case, then you should leave sooner rather than later. If, on the other hand, this post is more accurate, then by all means stick around for a while.

Also, I wonder about the wisdom of living hear the coast in a hurricane prone area.

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