Boeing [BA] said yesterday it was shuttering its facility in Wichita, Kan., and shifting work on the KC-46A to Washington, a move swiftly criticized by Kansas lawmakers who accused the aircraft manufacturer of breaking a promise to keep work on the Air Force’s next aerial refueler in their home state.
Boeing said its Defense, Space & Security facility in Wichita will close by the end of 2013 after it concluded there wouldn’t be sufficient business there in the future to justify keeping it open. The location employs more than 2,160 people.
“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,” Boeing said.
Boeing also cited defense budget reductions and changing customer priorities as reasons for closing the plant, and the need to reduce costs, increase efficiencies, and drive competitiveness.
Members of the Kansas delegation on Capitol Hill said they supported Boeing in the tanker competition because the firm pledged to perform the finishing work on the KC-46A tankers in their state.
“The fact that Boeing is now refusing to honor its commitment to the people of Kansas is greatly troubling to me and to thousands of Kansans who trusted that Boeing’s promise would be kept,” Sen. Jerry Moran (R-Kan.) said in a statement.
The Air Force awarded Boeing the tanker contract potentially worth $35-billion contract to build the next 179 tankers intended to replace the aging fleet of KC-135s. That marked the first of a three-phase procurement that could eventually reach a value of $100 billion. Boeing won the bid over European Aeronautic Defense and Space (EADS), but only after successfully protesting in June 2008 a decision to award the contract to what was then an EADS-Northrop Grumman [NOC] team.
Kansas lawmakers said Boeing’s closure of the Wichita facility was in haste since it only began a review in November, and disregarded the efforts that had been made to back Boeing in the tanker competition. Rep. Mike Pompeo (R), whose district includes Wichita, called the decision “terrible news.”
“Regrettably, we have now learned that Boeing will not only walk away from its commitment to the people of Kansas to finish the KC-46A tanker here, but it will also leave the state altogether–a state that helped make Boeing successful for more than 80 years,” Pompeo said.
Sen. Pat Roberts (R-Kan.) and Rep. Lynn Jenkins (R-Kan.) expressed similar criticism.
Boeing said the final work on the KC-46As will now be done in Puget Sound, Washington, where the aircraft are to be manufactured. But the company said the plane will still support jobs in Kansas because it will continue to rely on two dozen suppliers based in the state.
“Kansas will still have an important part in making the KC-46 the Air Force’s next tanker fleet,” said Jarrod Bartlett, a company spokesman.
Mark Bass, vice president and general manager of the maintenance, modifications and upgrades unit at the Wichita facility, said Boeing doled out $3.2 billion to roughly 475 Kansas suppliers across numerous commercial and military programs 2011, and that it expects the amount to grow with anticipated increases in commercial sector sales.
“We will continue to work with all of our stakeholders in Kansas in support of a robust aerospace industry in the state,” Bass said.
The Wichita location has also been the base for Boeing’s Global Transport & Executive Systems business and the B-52, as well as support for flight mission planning and integrated logistics.
Boeing said it will take steps to support employees slated to lose their jobs. Bass said layoffs will begin in the third quarter of this year.
“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,” he said.