Wichita Mayor Carl Brewer says losing Boeing is like losing a family member. The more than 80 year Wichita tradition is leaving.
Boeing says it can no longer afford to operate its Wichita facility. That's the main reason it gave for choosing to shut down the defense operations in Wichita by the end of 2013. Boeing says it started studying the facilities future in the middle of 2011. The results were finished in November and Boeing made the decision to leave December 30.
Vice president and general manager for BDS' Maintenance, Modifications & Upgrades division Mark Bass said that over the last five years Wichita projects have been winding down. He says Wichita does not have enough business on the horizon to maintain the facility.
"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 Bass. "We will begin program transitions in the coming months, with the complete closure of the site scheduled for the end of 2013. We do not anticipate job reductions as a result of this decision until early in the third quarter of 2012."
Boeing Wichita employs 2,160 people. About 1,200 of those jobs will be moved to Oklahoma City and San Antonio. In San Antonio they will do the maintenance, modification and support work. And in Oklahoma City is where engineering will take place. Bass says it's cheaper to operate those facilities because they are smaller in size and labor costs are lower. The Wichita facility has 97 buildings and Bass says it's just too big.
Bass says both San Antonio and Oklahoma City already provide the company tax incentives, but no they didn't receive anything more to expand. Bass says now that the decision is made, they will ask those communities for assistance.
Wichita Mayor Carl Brewer says until the Boeing sign comes down, they will continue to try and keep the company. He says they received no warning that Boeing was leaving. Brewer says it's frustrating they weren't give an opportunity to try and keep Boeing. He says the city, Sedgwick County and the State of Kansas have done nothing but fight for Boeing. He says they've demonstrated loyalty but Boeing has not. He believes they've known this day was coming.
Brewer and Sedgwick County Chairman Dave Unruh says the focus will now be on finding new businesses to move here. Unruh says we have a trained workforce ready to go and the goal is to find those people new work.
Boeing says it will continue to have an impact on the Kansas economy. "The company spent more than $3.2 billion with approximately 475 Kansas suppliers in 2011, spanning its commercial and defense businesses, making it the fourth largest state in Boeing's supplier network," said Bass.
"Based on Boeing Commercial Airplanes growth projections for the next few years, Boeing anticipates even more growth for suppliers in Kansas. Boeing values its long-term partnership with Kansas, and we will continue to work with all of our stakeholders in Kansas in support of a robust aerospace industry in the state."
Boeing is providing employee assistance including retirement seminars, job search resources, and financial counseling, as well as help finding jobs inside or out of Boeing.
"The decision to close our Wichita facility was difficult but ultimately was based on a thorough study of the current and future market environment and our ability to remain competitive while meeting our customers' needs with the best and most affordable solutions," said Mark Bass, vice president and general manager for BDS' Maintenance, Modifications & Upgrades division.
"We recognize how this will affect the lives of the highly skilled men and women who work here, so we will do everything possible to assist our employees, their families and our community through this difficult transition," the company stated in a release.
Future aircraft maintenance, modification and support work will be placed at the Boeing facility in San Antonio. Engineering work will be placed at the Boeing facility in Oklahoma City. Although work on the KC-46 tanker will now be performed in Puget Sound, Wash., the 24 Kansas suppliers on the program will be providing vital elements of the aircraft as originally planned.
This isn't the first time the company has left Wichita. Back in 2004, Boeing sold its commercial aircraft operation. Spirit AeroSystems bought the company and became one of Boeing's largest suppliers, providing fuselages and other components for several aircraft.
Spirit says Boeing's decision has no impact on its company.
"Our market is commercial aviation, not so much in defense. And on the commercial side, Spirit sees a rate increasing environment that is unprecedented for all our Boeing products: from 737s to 777s and 787s. It may be important to note that Spirit’s work on the tanker is unaffected by today’s announcement. The fact is that Boeing will still be delivering untold value in Wichita for decades to come. That will come in commercial aviation more than defense," Spirit's Spokesman Ken Evans said in a release. When asked if Spirit has any interest in the Boeing facility, Evans said they have no need for the facilities at this time.