Topeka Kansas political leaders Wednesday expressed outrage and disappointment over Boeing Co.’s announcement that it was closing its Wichita defense plant, sending more than 2,160 jobs to three other states.
“No one has worked harder for the success of Boeing than Team Kansas,” Gov. Sam Brownback said.
Boeing plans to shut down the Wichita plant by the end of 2013 to cut costs. “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.
But less than a year ago, Kansas officials were applauding after helping Boeing secure a $35 billion contract from the U.S. Air Force to replace its refueling tankers. The contract had originally been awarded to Boeing arch rival EADS but Boeing protested the decision and under pressure from Kansas officials the Pentagon reopened the bidding process. Boeing had promised Kansas 7,500 jobs with an overall economic impact of $390 million.
On Wednesday, U.S. Sen. Pat Roberts, R-Kan., remembered that fight.
“Boeing’s chairman sat in my office 22 months ago during that battle and promised me, then-Senator Brownback and Congressman (Todd) Tiahrt that if we won the fight to get the tanker contract back, Boeing would stay in Wichita,” Roberts said.
“The chairman again promised the entire delegation the work would remain in Wichita just last February, when the tanker contract was settled in Boeing’s favor,” he said.
In addition to fighting for Boeing in the halls of Washington, D.C., Kansas political leaders have helped the company in Topeka and Wichita, providing Boeing and other aircraft manufacturers with numerous incentives in the form of tax breaks, research dollars, workforce training and lobbying might.
Boeing’s departure should teach state officials a lesson, said Kansas Democratic Chairwoman Joan Wagnon.
“We should all learn that throwing money at wealthy corporations to attract or retain jobs doesn’t guarantee loyalty or longevity,” Wagnon said.
“We need a new approach to economic development that invests first in our schools, our people, our roads and communities,” she said.
State Rep. Jim Ward, D-Wichita, described Boeing as the “poster child of corporate tax incentives” getting tax breaks at every level of government.
“It is outrageous we will not be getting the 7,500 jobs promised by Boeing when they got the Tanker contract,” he said. He said Kansas will be less trusting of corporate promises in the future.
Boeing 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.
But Charles Krider, business professor at Kansas University, said it will be difficult for suppliers and related companies to stay in Kansas, far away from the tanker work.
Krider called the loss of Boeing a “big blow, particularly since the state worked so hard to work with Boeing to get the tanker contract.”
He said that the federal defense budget is under a great deal of pressure, and that defense-related plant closures will probably happen in other parts of the country too.
He disagreed with the notion of ending economic incentives for businesses to come to Kansas. “It’s hard to have one state or one city disarm in that battle as long as surrounding states are doing it,” he said.
Kansas has long been fighting other states to maintain its aircraft manufacturing sector.
Last year, Texas Gov. Rick Perry, whom Brownback supports for president, signed into law a bill that gave Boeing a big tax break on aircraft temporarily located in Texas for manufacturing or assembly.
At that time, Perry said, “HB 3727 makes it easier for companies like Boeing to have cost certainty when it comes to their tax bill, helping them commit to doing more business in this community and our state.”
Boeing Defense, Space and Security President and Chief Executive Officer Dennis Mullenberg said, “Our partnership with the state of Texas enables us to offer enhanced capabilities to our military and commercial customers, and supports Boeing’s goals to grow and become more competitive.”
Brownback and other Kansas officials on Wednesday said they would continue to work to expand aircraft manufacturing in the state, focusing on commercial aircraft production. Kansas Department of Commerce Secretary Pat George said Kansas was well-positioned to grow in this area.
House Minority Leader Paul Davis, D-Lawrence, said the decision by Boeing was “beyond disappointing.”
Davis added, “This is why I call upon Governor Brownback and legislators from both political parties to commit to make the creation of jobs our first priority this legislative session, invest heavily in job training so Boeing workers can receive the training they need to find new jobs and to promise these workers and the other Kansans without jobs that we will not reduce unemployment benefits by one penny.”