Wichita closure to bring 100 Boeing jobs here
Boeing confirmed Wednesday that it will close its defense plant in Wichita, Kan., by the end of 2013 and will do final work on the Air Force tankers at its Puget Sound factories.
Seattle Times aerospace reporter
Kansas employees and politicians fumed Wednesday at Boeing's decision to close its defense plant in Wichita. And the move didn't meet expectations here, delivering fewer jobs in the Puget Sound region than anticipated when rumors of the closure first surfaced in November.
Boeing's factories here will have a net gain of just 100 jobs from the planned closure by the end of 2013.
Most of the job gains will go elsewhere, Boeing said Wednesday.
Oklahoma City will add about 800 jobs, cementing that already expanding site's role as a key defense-side engineering support center for Boeing. Oklahoma's gain includes not only the Wichita work but also some work previously done in Seattle.
And San Antonio, Texas, will add 300 to 400 jobs, strengthening its role as an airplane-modification and maintenance center.
The body blow to aviation manufacturing in Kansas was delivered at an all-hands meeting, after which employees were allowed to go home for the rest of the day.
The U.S. Air Force refueling-tanker work Boeing promised to Wichita during the intense competition for that contract will instead be done in Puget Sound-area factories, adding about 200 jobs here.
Under Boeing's recent contract agreement with the Machinists union here, the work of completing the tankers must go to Puget Sound-area factories if it isn't done in Kansas.
However, Boeing will move about 100 jobs on military and government VIP jets out of Seattle to Oklahoma City, so the net gain here is just 100 jobs.
In Wichita, about 2,100 employees will lose their jobs, beginning in the second half of this year, with complete closure by the end of 2013, the company said.
Winning the tanker contract a year ago was seen in Kansas as preserving Boeing Wichita's future. In 2010, Boeing said a tanker win would add 7,500 direct and indirect jobs in Kansas.
But the company has decided to install the military systems on the tankers near the Everett assembly line where the airframes will be built.
Boeing hasn't said where that work will be done in this region. It will most likely be in Everett or Seattle.
Boeing blamed the closure on the winding down of maintenance and support contracts on government defense programs.
"The site does not have enough sustainable business on the horizon to create an affordable cost structure to maintain and win new business," its statement said.
Specifically, there are no additional government executive-jet contracts pending, and new contracts for upgrades to the B-52 bomber fleet have not materialized as anticipated, Boeing said.
In addition, the international tanker program, supporting 767 tankers delivered to Japan and Italy, is due to end this year.
"Boeing has decided to close its operations in Wichita to reduce costs, increase efficiencies, and drive competitiveness," said Mark Bass, vice president of the Boeing defense unit's Maintenance, Modifications & Upgrades division.
He said the defense plant consists of 97 buildings dispersed around a 2-million-square-foot site, an inefficient space to perform a shrinking workload. Boeing competes against small companies with low overhead costs — typically "two hangars and an office building," said Bass — for the work of maintaining and supporting government jets.
He said the decision to close Wichita was made in the final days of December after a study begun last summer. Boeing did not know at the time of the tanker award last February that it would take this course, he said.
None of that mollified Kansas political leaders.
"Today's announcement by Boeing's leadership is hugely disappointing to me, but more importantly to the thousands of workers whose livelihoods are affected by this decision," said U.S. Sen. Pat Roberts, who added that Boeing had promised as recently as February to stay in Wichita if it landed the tanker contract.
Wichita maintains and modifies a fleet of government jets, including Air Force One and smaller jets used by the top military brass. It also maintains and constantly upgrades the country's aging fleet of B-52 bombers.
Future aircraft maintenance, modification and support work will be at the Boeing facility in San Antonio. Engineering work will go to the Boeing facility in Oklahoma City.
Last year, Boeing began transferring 550 jobs from Long Beach, Calif., to a new engineering design center in Oklahoma that will produce upgrades for the C-130 Hercules and the B-1 Lancer aircraft.
The work going from Kansas to Oklahoma also includes tasks currently done in the Developmental Center next to Boeing Field, supporting the modifications, maintenance and repair of military and government executive-transport jets. Those planes are mainly customized 737s.
Bass said about 100 jobs in engineering, supply-chain support and logistics will transfer from Seattle to Oklahoma.
About 5,500 people in the Puget Sound area work on Boeing's defense side, mostly in Kent and Seattle.
As the Pentagon budget threatens to tighten dramatically, this region seems better placed than most defense sites, having secured production of Boeing's key new military planes: the Air Force KC-46 tanker and the Navy's P-8 Poseidon anti-submarine jet.
And hundreds of Boeing engineers are working on other projects, including the work to upgrade the U.S. fleet of AWACs (airborne warning and control system aircraft) with new sensors and systems.
Yet Tom McCarty, president of the white-collar union at Boeing, the Society of Professional Engineering Employees in Aerospace (SPEEA), and himself a defense-side engineer, said the Puget Sound-area workforce is worried about maintaining military work here.
"There is some apprehension. We've got to stay competitive," McCarty said. "We're competing for very limited Defense Department dollars right now."
Seven years ago, Boeing sold off its major commercial-airplanes parts plant in Wichita. The closure of the defense plant will end its operations in the city, where Boeing has been present since it bought Stearman Aircraft in 1929.
Wichita remains a center of manufacturing for business jets and small private airplanes, built by Bombardier, Hawker Beechcraft and Cessna.
The business-jet market has been depressed by a prolonged downturn after the financial crisis, but the smaller, less expensive business jets built in Wichita have been hit much harder than the high end of that market.
Richard Aboulafia, an industry analyst with the Teal Group, said the recession decimated Wichita's small-airplane business, and the city's business-jet sector is down 60 percent. "Wichita has been hit by the downturn far more than any other aerospace cluster in the world, much worse than anywhere else," he said.
The only remaining bright spot for the city is Boeing's former commercial-airplanes parts plant, now owned by Spirit AeroSystems.
Spirit makes the fuselages for the 737, the nose-and-cockpit sections of all Boeing's jets including the 787 Dreamliner, and the engine casings and struts for all the jets except the Dreamliner.
So Wichita will still be important to Boeing. And about 24 Kansas companies will still be suppliers on the Air Force tanker program.
Yet Boeing's statement Wednesday that it "values its long-term partnership with Kansas, and we will continue to work ... in support of a robust aerospace industry in the state" will be no comfort to its employees as the company prepares to exit the city that still calls itself the "Air Capital of the World."
Information from The Associated Press is included in this report.
Dominic Gates: 206-464-2963 or email@example.com
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