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Archive for Thursday, January 5, 2012

Goodbye, Boeing

Members of the Kansas congressional delegation were able to help Boeing Co. land a major military contract, but they couldn’t keep the company and its new jobs in Kansas.

January 5, 2012

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Boeing’s decision to move its last operations out of Wichita is an economic blow that will reverberate throughout the state.

Company officials announced Wednesday that reductions in the federal defense budget would force it to close its defense plant in Wichita by the end of 2013, costing the city more than 2,100 jobs. The work being done in Wichita will be spread to other Boeing facilities in Texas, Oklahoma and Washington. Wichita officials said the closure would result in a loss of $1.5 billion in wages over 10 years.

The decision to move work on a new Air Force refueling tanker to Puget Sound, Wash., was especially hard for Kansas government officials to swallow. Sen. Jerry Moran and Sen. Pat Roberts both issued statements only minutes after Boeing’s announcement saying they were “outraged” (Moran) and “hugely disappointed” (Roberts) by Boeing’s announcement. The Kansas congressional delegation and top state officials had worked hard to help Boeing land the tanker project, a move the company had said would bring about 7,500 jobs to Kansas.

To the officials, Boeing’s decision to close the plant represents a broken promise to the state. Moran even called on Boeing to reconsider its decision and promised, “In the days ahead, I will continue to do all I can to encourage Boeing to fulfill their pledge to the Wichita community.”

Those are nice words, but Boeing’s announcement is a sad reminder that business is business and the aircraft company is going to do what is in its own best interests regardless of any nonbinding “pledge” to Wichita or Kansas.

Boeing’s exit will end an 80-year relationship with Wichita that began when the company bought the Stearman Aircraft Co in 1929. During World War II, the company employed more than 40,000 people, including many women, and churned out four bombers a day. Boeing sold its commercial aircraft operation in 2005 but retained 4,500 workers in its defense division. Layoffs have cut that number to the current 2,100.

The general aviation and military aircraft business have been a mainstay of the state’s economy for decades and earned Wichita the designation of “Air Capital of the World.” As Wichita Mayor Carl Brewer noted after Wednesday’s announcement, “… there is a lot of emotional and economic attachment tied to this.”

Brewer noted that the city had faced similar challenges before but would continue to support its other aircraft employers, including Spirit AeroSystems, which took over Boeing’s commercial operations in 2005.

Wichita and the rest of the state have no choice but to make the best of things, but Boeing’s exit will be a significant loss for Kansas.

Comments

Godot 2 years, 11 months ago

Lawmakers should investigate if there was a quid-pro-quo between Boeing and the NLRB that resulted in the NLRB's sudden reversal on blocking Boeing's South Carolina plant, and the closing of the Kansas plant with the transfer of hundres of jobs to the all-union plant in Washington.

This reeks of high crimes and misdemeanors.

just_another_bozo_on_this_bus 2 years, 11 months ago

Until Obama's recess appointments yesterday, for all practical purposes there was no NLRB.

You may need to look elsewhere for a conspiracy theory.

labmonkey 2 years, 11 months ago

I hope Boeing at least gives Kansas a reach-around.

jmadison 2 years, 11 months ago

What to make of the Air Force excluding Beechcraft Hawker from the bidding for the new light attack aircraft and awarding the contract to Brazilian Embraer and Sierra Nevada Corp whose owner has been a leading contributor to Sen. Harry Reid?

Tristan Moody 2 years, 11 months ago

It would seem to me that it would make sense to exclude from competitive government bids any company that funds political campaigns (kickbacks, racketeering, anyone?).

If a municipal official takes money from a company participating in a bid, it's a felony. If a senator or congressman does it (under the guise of a campaign contribution), it's not only legal, everyone is doing it.

Citizens United just made it even easier, as these corporations can funnel money through SuperPACs and evade disclosure.

Reverse Citizens Unitied, get money out of politics.

CreatureComforts 2 years, 11 months ago

I didn't know anyone on LJW was an expert on the political contributions of Sierra Nevada Corporation...I'm sure a ton of research went in to your Google search 2 minutes before posting.

vuduchyld 2 years, 11 months ago

Any estimate on how many NON-Boeing jobs are at risk?

You can't even drive around Wichita without seeing tons of little machine shops, small manufacturers...second-tier suppliers to Boeing. Seems like a lot of those small businesses and the jobs they provide are in some trouble, too.

williegreen 2 years, 11 months ago

Production of aviation fuel is shifting from traditional petroleum resources to economically inferior oil shales and tar sands. As diminishing traditional supplies continue this trend, airline travel will become much less affordable than what we've enjoyed for the last half Century.

If Wichita is to court other industries for it's skilled workforce, I would suggest high-speed passenger rail manufacturing. In many ways, passenger coaches for rail travel are not much different than passenger cabins on airlines. Except for being more spacious and comfortable, of course.

Transportation fuel resources are forcing a paradigm shift in our transportation infrastructure. Passenger rail is a growth market, despite partisan political opposition. To the extent that the manufacturing and design skills are transferable, it would be wise to pursue the passenger rail market.

jayhawkinsf 2 years, 11 months ago

Instead of "we" buying the factories and building turbines and such, why don't "you" do it. Build all the turbines you want, or whatever else you want. Sell them if there are buyers. Become rich in the process. Or not, if there are not enough buyers. Then you would become poor. Or maybe richer for having had the experience.

jayhawkinsf 2 years, 11 months ago

I actually like the idea of wind power. I just think that if "you" could build it for $1, "we" (government) would build it for $5. And now is not the time for an expansion of government, not that I think there is never a time, just not now.

Kendall Simmons 2 years, 11 months ago

Yet another example of the free market at work...which may explain why so many posters of a certain persuasion have been silent on this issue today.

Alexander Smith 2 years, 11 months ago

Actually free market is NOT working fine. The bailouts and down turn of the economy proves that theory. Free market works for the wealthy, people don't understand that free market does not consider the economic stability of a country. Free market looks at ways to boost the net income so the investors will have the greatest return. It promotes compition but it leads to finding more and more ways to increase sales while increaseing profits which leads to the locaton of cheaper ways to produce products. The end state of free market is that our jobs are shipped off to countries that can provide this cheap labor while the free market country has its working class (middle and lower) become even poorer. Free market also stands for business to cut corners to increase profits whic leads to lower quailty and safety and health violations. USA is becoming a service industry which is proven to be unstable. Every country out there that is provides a huge service industry ends up with huge amounts of unemployement poor and social welfare programs...if they can afford it.

USA's GREAT free market that you speak of is failing fast. As of 2008-9 we have fallen to 24th as the most economic stable countries and we will continue to fall unless we slam some regulations and start putting tariffs on imports. If your want the economy to be stable you need to bring production back to the USA.

If you look at the most economic stable countries in the top 10, they are all countries that have social governements and are production countries.

Free market is both good and bad but with out regulations is slowly dies and destorys a countries economy because the only thing the free market is really concerned about is supporting the interests fo those who invest them which is the stock holders. Free Market = short term benefitsfor all+ support for the wealthy.

Boing should be sued by state for breaking a promise. And yes no legal countract was signed but in the legal system for those who know, INTENT is just as powerful as a signed countract to be bound by. The intent in the case is that Boing would stay if they got the contract. Which creates a binding contract based on intent. They broke it and they owe the state.

yourworstnightmare 2 years, 11 months ago

This is what cuts to the federal budget will look like.

Teapublicans should be very pleased at this development.

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