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Boeing To Close Wichita Facility By The End Of 2013

Boeing’s decision to close its Wichita, Kansas facility drew widespread coverage. Generally, outlets neutrally noted that the closing is coming ahead of expected Pentagon budget cuts, though most outlets also noted that Kansas politicians reacted negatively to the news, especially since the plant was expected to add 7,500 jobs because the Air Force has awarded new tanker business to the firm.

        The New York Times (1/5, Drew, Subscription Publication, 1.23M) reports, “With the Pentagon pushing to cut costs, Boeing said on Wednesday that it would close its sprawling military airplane plant in Wichita, Kan., over the next two years and lay off many of the 2,160 workers.” The company “said it would shift as many as 1,400 of the jobs to San Antonio, Oklahoma City or the Seattle area, by either transferring workers from Wichita or hiring others.” The remainder of the jobs would be eliminated. Boeing’s move came a day before an expected announcement by Defense Secretary Leon Panetta, who will likely “discuss how the Pentagon plans to adjust its war strategies and weapons programs to save at least $450 billion over the next 10 years.”

        The Los Angeles Times (1/5, Hennigan, 630K) adds Boeing “has built and modified military aircraft” in Wichita “since the 1920s.” In yesterday’s announcement, Boeing “said its decision to close its Wichita facility was directly linked to tighter Pentagon budgets.” Boeing vice president Mark Bass, in a statement, said, “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.”

        Bloomberg News (1/5, Ray, Tiron) reports, “Work on the aerial-refueling tankers the Pentagon ordered in February will be done at the planemaker’s wide-body jet factory in Washington state instead, and some existing work will be moved to Texas and Oklahoma.” In a statement, Boeing explained, “Over the past five years, contracts in Wichita have matured, programs have come to a close or are winding down, and the site does not have enough sustainable business on the horizon to create an affordable cost structure to maintain and win new business.” The decision to close the plant angered Kansan politicians, who noted that they “lobbied to help Boeing beat European Aeronautic, Defence & Space Co. (EADS) in February for a contract to supply the US Air Force with new tankers.”

        The AP (1/5, Hegeman) observes that Boeing’s move is “not a surprise because Boeing said in November it was looking at closing the Wichita plant.” However, “it still drew an angry response from Kansas lawmakers who helped Boeing land a lucrative Air Force refueling tanker project in February and had expected thousands of jobs to come to Wichita with it.” The tanker project slated for Wichita will now be build at Boeing’s Everett, Washington facility instead.

        AFP (1/5, Beatty) reports that Boeing’s Wichita plant “is the hub of operations for the B-52 and 767 Tanker programs.” The director of Wichita State University’s Center for Economic Development and Business Research, Jeremy Hill, “said Boeing’s decision would cost Wichita’s economy $1.5 billion in lost wages over the next decade.” However, he noted that “Boeing’s decision to keep using most of its Kansas suppliers was a silver lining to otherwise bad news.”

        The Kansas City Star (1/5, Davis, 214K) reports that due to the closing of the Wichita facility, more than two dozen Kansas City-area suppliers and vendors could see decreased business. “Wichita and the state probably will seek a new employer for the sprawling site.”

        Also covering this are CNN Money (1/5, O’Toole), Aviation Week (1/5, Mecham), the Seattle Times (1/5, Gates, 253K), the Puget Sound Business Journal (1/5, Wilhelm, Subscription Publication), the Houston Chronicle(1/5, Pack, 444K), the Wall Street Journal (1/5, Kesmodel, Subscription Publication, 2.08M), Reuters (1/5, Peterson), the Financial Times (1/5, Lemer, Subscription Publication, 448K), MarketWatch (1/5, Hinton), and FOX News Business (1/5, Egan).

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January 11, 2012 - Posted by | Uncategorized

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