Wichita Economic Malaise Grows

 - February 4, 2012, 5:50 AM

In the wake of news that Boeing plans to close its defense, space and security operations in Wichita by the end of 2013, the Greater Wichita Economic Development Coalition (GWEDC) has helped launch an aviation task force to develop strategies that will promote the city’s aviation industries.

Boeing, which has an 83-year history in Wichita, announced in early January it would close its plant with 97 buildings, 2 million square feet of space and more than 2,160 people, by the end of 2013. The facility was expected to play a major role in production of Boeing’s KC-46A aerial refueling tanker.

Nor is that the only bad news in recent months. In December, the U.S. Air Force announced it had excluded Wichita-based OEM Hawker Beechcraft’s AT-6 entrant from bidding for a light support aircraft (LSA) contract with a potential value of nearly $1 billion.

These decisions only add to the economic malaise of the city that describes itself as “The Air Capital of the World,” and which has seen its other aviation industry residents, primarily Cessna, Hawker Beechcraft and Learjet, lay off some 13,000 workers since 2008.

Congressman Mike Pompeo (R-Kan.) expressed frustration with the Boeing departure and the AT-6 decision. He described Boeing’s move as “a confession that it will not honor its commitment to Kansas.

“Do not be fooled by Boeing’s announcement that it will continue to rely on sub-supplier work in Kansas,” he warned. “While economically important…that work in no way substitutes for the decade of promises made by Boeing.”

He referred to the Air Force decision to award the light support aircraft to Sierra Nevada and its Brazilian partner Embraer as disappointing. “Indeed, it’s also troubling that the United States Air Force would rather have these fighter aircraft built in another country, when jobs are needed so badly here at home.”

Pompeo noted that in announcing a U.S. Air Force contract that would have seen major work on its KC-46A tanker done in Wichita, Boeing had represented the contract as adding 7,500 jobs in Wichita.

While loss of the LSA contract is a major blow to Hawker Beechcraft and Wichita, it would give Florida’s aerospace industry a boost, as Embraer plans to build a plant in that state for assembly of its EMB-312 Super Tucano under the Air Force contract. Further, Embraer’s U.S.-owned partner, Sierra Nevada, has announced that the plant will initially employ 50 skilled workers. Seventy-one direct and indirect vendors and suppliers in 21 states in the U.S. will employ another 1,200 people, said Sierra Nevada.

The Air Force has since issued a stop-work order regarding the contract, pending a decision in mid-March by U.S. Claims Court, which is considering an appeal by Hawker Beechcraft.

There is some good news. On January 10, Kansas Governor Sam Brownback and Bombardier Aerospace announced an expansion of the Canadian OEM’s Learjet facilities in Wichita. Bombardier said the growth is expected to create 450 new jobs over the next 10 years. The project has the backing of Kansas State to the tune of $16 million.

An analysis by the Center for Economic Development and Business Research at Wichita State University said that given Bombardier’s investment of dollars locally, the new construction, plus the new payroll (compared to the cost of public services delivered), the project would return $1.26 million to the city and $1.2 million to Sedgwick County for every dollar invested by those two municipal entities.