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Archive for Saturday, January 7, 2012

Kansas leaders pursuing 2 paths in next step after Boeing announces plant closure

The first production model of the new Boeing 787 Dreamliner airplane is unveiled to an audience of several thousand employees, airline executives, and dignitaries during a ceremony at Boeing's assembly plant in Everett, Wash., in this 2007 file photos. Kansas leaders are insisting that Wichita still will be able to define itself as the aircraft manufacturing capital of the world even without the Boeing plant, which announced it will close this month. Gov. Sam Brownback is promising aggressive attempts to attract new commercial aviation work — even mentioning Boeing rival Airbus.

The first production model of the new Boeing 787 Dreamliner airplane is unveiled to an audience of several thousand employees, airline executives, and dignitaries during a ceremony at Boeing's assembly plant in Everett, Wash., in this 2007 file photos. Kansas leaders are insisting that Wichita still will be able to define itself as the aircraft manufacturing capital of the world even without the Boeing plant, which announced it will close this month. Gov. Sam Brownback is promising aggressive attempts to attract new commercial aviation work — even mentioning Boeing rival Airbus.

January 7, 2012

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— Some Kansas officials felt betrayed when they learned Boeing Co. was contemplating closing its defense plant in Wichita, and the area’s congressman says he’s researching whether the company can be held to promises to bring thousands of jobs to the Sunflower State.

But the state’s leaders are pursuing another path, too, insisting that Wichita still will be able to define itself as the aircraft manufacturing capital of the world even without the Boeing plant. Gov. Sam Brownback is promising aggressive attempts to attract new commercial aviation work — even mentioning Boeing rival Airbus.

Boeing’s longtime presence in the Wichita area was a big part of the city’s claim to its title, and state officials were aggressive Boeing boosters over the past decade. As the company announced last week that its Wichita plant, with 2,160 workers, will close by the end of 2013, Brownback attempted to soften the psychological blow by predicting that the state’s aviation industry will emerge larger and more vibrant.

“For people in Kansas, this is tough,” said Carter Copeland, an aerospace analyst for Barclays Capital. “This is an aerospace center of excellence. There is a very skilled work force there that knows how to work in this industry.”

Broken promises?

Boeing’s announcement that it will move work from the Wichita plant to Oklahoma, Texas and Washington wasn’t a surprise to Kansas officials because the company had disclosed in November that it was looking at closing the Wichita plant. But Kansas officials were upset because of the efforts they’d put into promoting Boeing’s bid for a contract worth at least $35 billion to build 179 refueling tankers for the Air Force.

The Air Force had awarded the contract to a rival consortium in 2008 but came under pressure from Kansas’ congressional delegation and other critics to reopen the bidding process. Boeing won the contract in February, and Kansas officials contend the company promised them that work would be done in Kansas — creating as many as 7,500 jobs with an economic impact of nearly $390 million.

Nor was it the first time Kansas officials helped the company. In 2003, with Boeing preparing to launch work on what became its 787 commercial jetliner, legislators and then-Gov. Kathleen Sebelius authorized up to $500 million in bonds to help bring work to Kansas. According to the state Department of Commerce, the incentives eventually were tapped by Spirit Aerosystems, which took over Boeing’s commercial operations in Wichita.

U.S. Rep. Mike Pompeo, a Republican whose 4th Congressional District in south-central Kansas includes the Boeing plant, said he and his staff plan to examine the bidding process for the Air Force contract more closely. He said the company made “a very public commitment to the workers in Kansas.”

“We’re going to go try to gather the data set so that we can understand whether the federal government got what it bargained for when it chose the Boeing Company,” Pompeo said. “We’re trying to go back and dig up precisely who was told what and when.”

A changed market

Boeing has said the market for defense work changed dramatically in the past 18 months and its Wichita site, with 97 buildings and 2 million square feet, wasn’t competitive. After Boeing spun off its commercial operations in the area in 2005, it kept 4,500 defense workers, but layoffs caused that number to dwindle.

“Boeing was not utilizing that facility to its full capacity,” said Jeremy Hill, director of Wichita State University’s Center for Economic Development and Business Research. “When someone holds onto a facility and they only use it marginally, it can be the worst thing for a community.”

Copeland said with ongoing debates in Washington over the federal debt and budget deficit and the prospects for large spending cuts, even in defense, it has become clear that there’s too much manufacturing capacity among aviation’s defense contractors.

And even before Boeing formally announced that it would close the Wichita defense plant, Brownback had suggested the Kansas aviation industry’s future was in its commercial side. In a December interview with The Associated Press, he predicted “a substantial decline in the defense sector.”

During a Statehouse news conference responding to Boeing’s announcement, the governor brushed aside a question about the potential embarrassment of the company leaving Kansas after state officials’ efforts on its behalf. Brownback said he expects positive announcements about commercial aviation in the near future.

“We are going to see more aviation work in the state of Kansas,” he said. “That’s the long term, and so all those investments have been proper, and they are moving us forward.”

Copeland said he sees Spirit “on the cusp” of significant growth and expects an increase in Boeing’s commercial business in the next several years, and Wichita already has a pool of industry talent. Hill said Boeing’s vacant defense plant can be marketed by local officials to other firms.

“There are not a lot of facilities on land available for new industry to come here,” he said. “There’s a value for the community to attract new industry there.”

Comments

yourworstnightmare 2 years, 3 months ago

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

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blindrabbit 2 years, 3 months ago

Sam's efforts at saving Boeing jobs in Kansas bring to mind a few idioms: There are many more that are appropriate here!

"Closing the barn door after the horse has left" "Trying to put toothpaste back in the tube" "How can you keep them down on the farm once they have seen Paree"

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pavlovs_dog 2 years, 3 months ago

Huffing and puffing for PR value, now Sam creates jobs for folks in other states without the inconvenience of them moving to Kansas.

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yourworstnightmare 2 years, 3 months ago

Education and quality of life will attract new companies and jobs.

With brownback in charge, good luck.

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monkfellow 2 years, 3 months ago

While there's likely nothing in writing on this, I'd bet that the decision to close down the Boeing plant in a right-to-work state like Kansas is a message sent by the International Association of Machinists and the NLRB, though Boeing: ALL future work will be done in states with mandatory union membership, like Washington State. The prize: Boeing will be free to continue work on its "non union" plant in South Carolina.

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Sigmund 2 years, 3 months ago

"Some Kansas officials felt betrayed when they learned Boeing Co. was contemplating closing its defense plant in Wichita, and the area’s congressman says he’s researching whether the company can be held to promises to bring thousands of jobs to the Sunflower State."

But it probably isn't just Kansas officials who feel betrayed, but also Mike Hoeflich, LJWorld columnist, former KU law dean and law professor who teaches contracts at KU was willing to overlook Boeing's corrupt practices as long as Kansas gets a cut of the action, which is ironic because he teaches "Professional Responsibility." "State should fight for Boeing", by Mike Hoeflich. LJWorld Online, March 13, 2008. http://www2.ljworld.com/news/2008/mar/13/state_should_fight_boeing/#c546103

What do you expect when you support a company whose business practices include corruption, fraud, crony capitalism, and corporate welfare that is so widespread it is breathtaking, just because they provide local jobs? Let's just ignore the fact that the investigation of the first tanker deal revealed malfeasance, resulting in a $615 million fine for the company. Boeing's CEO, Phil Condit, was forced to resign. The company's CFO was sent to prison. Darleen Druyun, who had served as the second-ranking civilian official for Air Force procurement, also went to prison.

She pled guilty in 2004 to steering the tanker contract and other deals toward Boeing in the hopes of later securing lucrative jobs with the company for herself and her family members. "Boeing CFO and Top Pentagon Air Force Buyer Go to Prison Over $4 Billion Fraud" http://www.youtube.com/watch?v=vAhMer...

Make deals with people who cheat and then act all indignant because you get cheated.

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Richard Heckler 2 years, 3 months ago

Brownback is promising aggressive attempts to attract new commercial aviation work — even mentioning Boeing rival Airbus.

Brownback is incompetent as are all Kansas elected officials. They look at tax cuts as an industry without realizing their kind of tax cuts are tax increases. Dumb and incompetent.

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geekin_topekan 2 years, 3 months ago

All those CHristians out of work! What is blowsalot thinking?

Maybe is Boeing offered itself up to the Lord, the one true and non-brown Lord, they would see the light.

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Mike1949 2 years, 3 months ago

Is it political? No, it isn't. Same thing happened here in Manhattan a few years ago. A company that was a computer call center enjoyed a ten year tax cut, and I am talking about a big tax cut. But as soon as it ran out, they took all the jobs over seas and closed down the building. Talk about deceit! Though what is going on in Wichita isn't quite the same, the state of Kansas has spent a lot of money helping out the company as much as it is legal. Money that were out of tax payers pockets!

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Robert Rauktis 2 years, 3 months ago

"But Kansas officials were upset because of the efforts they’d put into promoting Boeing’s bid for a contract worth at least $35 billion to build 179 refueling tankers for the Air Force."

Amazing how they decry big government and expound the free market until it works against them. Then they're out there with the same pork on their breath.

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blindrabbit 2 years, 3 months ago

What about Roberts, Tiahrt, Pompeo, Moran, Gates and Brownbacks role in letting this get away, Repubs. all! . I'll bet the Koch-a-Kolas had a hand it it; don't want continued competition in Wichita!

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