Boeing going away?

[drjones96]

Originally Posted by Sco

Lots of people, even in this thread continue to deny this simple truth. In a relatively short period of time, Wichita has lost most of their major employers and anyone that has been paying attention can see the signs of a city that has been in rapid decline since the late 90s. You can add Boeing to the list of other employers that have left for greener pastures (Rent-A-Center, Pizza Hut, Coleman, etc.) People say the same thing every time something like this happens - another business will expand, the city will attract a new employer - but it never happens.

The loss of Boeing takes $1.2 billion out of the Wichita economy over the next ten years. Using conservative, standard economic development multipliers means that the real loss will be closer to $2.5 or $3 billion in lost wages, sales, etc. I challenge anyone to tell me who they think is going to expand or setup shop in Wichita to replace those dollars.

The symbolic impact is also huge. Boeing even though smaller than they used to be, is a major brand name. Having them in Wichita did a lot to dispel the common belief that Wichita is nothing more than a bland backwater cowtown. It will be even harder to lure new employers now to a city with few amenities and employment opportunities. Employers have to look at what is good for their business and their employees. How is an employer supposed to convince their employees to move to Wichita after they discover that job prospects for their spouses are limited to call centers and fast food?

Boeing leaving doesn't really have a psychological impact on me personally. It probably should given that it's where I had my first paying engineering job 10 years ago. But it doesn't.

When they lost the Tanker contract the first time in (2008?) I figured they would shut the operation down here....simply because there is very little business for them here without the tanker. They've got AF1 and a few other things. There is no major manufacturing facility. That went to Spirit in 2005.

If you want to talk about major impacts, imagine if Boeing decided that they would rather have someone other than Spirit make the fuselages for the 737 MAX. Or if they decided to ship their workshare on the 787 to Charleston or Japan.

You lose Boeing...eh...not the worst news...they were a small operation in the grand scheme of things. You lose Spirit...and that is painful. Combine the loss of those two with Cessna or HBC and then you can say that this town is officially on the mat.

Even more worriesome IMO is the potential near term loss of the AFB. If Boeing is providing service and support of the KC-135 fleet at Tinker what role does Mac have in this deal then? Anybody?

[Sco]

Originally Posted by drjones96

Boeing leaving doesn't really have a psychological impact on me personally. It probably should given that it's where I had my first paying engineering job 10 years ago. But it doesn't.

When they lost the Tanker contract the first time in (2008?) I figured they would shut the operation down here....simply because there is very little business for them here without the tanker. They've got AF1 and a few other things. There is no major manufacturing facility. That went to Spirit in 2005.

If you want to talk about major impacts, imagine if Boeing decided that they would rather have someone other than Spirit make the fuselages for the 737 MAX. Or if they decided to ship their workshare on the 787 to Charleston or Japan.

You lose Boeing...eh...not the worst news...they were a small operation in the grand scheme of things. You lose Spirit...and that is painful. Combine the loss of those two with Cessna or HBC and then you can say that this town is officially on the mat.

Even more worriesome IMO is the potential near term loss of the AFB. If Boeing is providing service and support of the KC-135 fleet at Tinker what role does Mac have in this deal then? Anybody?

Isn't it an open secret that Hakwer is on their way out of town?

I think McConnell will be gone in the next round of base closings.

[Defiant6]

Wichita is no Detroit....for the time being. Unlike Detroit, Wichita is still growing at slow but decent pace and has been throughout the 90s even with the loss of Pizza Hut, Rent A Center, etc. Why would Cabela's and all these other stores and places traditionally in larger cities open up in Wichita if it is was a dying city? Let's face it, we all knew Boeing was headed out when they sold off their commercial division in Wichita leaving them with only a miniscule presence with their military complex that's left and lets face it, Wichita is not a city for military work so I'm not surprised that Boeing is leaving. Wichita's focus is the commercial side of avaiation which is now finally rebounding. Spirit is growing, Hawker isn't going anywhere for the time being, and Bombardier/Learjet is getting ready to start a HUGE expansion in Wichita with a final assembly plant for their new business plane. And let's not forget that there's a wind energy company with a new plant in Hutchinson that recently said they are going to build a large distribution and assembly facility in the northeast part of Wichita and the city has a growing medical/healthcare field.

Now don't get me wrong I'm not saying that Wichita will be peaches and roses as this should be a major wake up call to the city and state. The city needs to ween itself off of the avaiation industry and focus on less cyclical industries and quickly. The state needs to really rework its taxes if it is serious about attracting new businesses to the state especially corporate headquarters or larger more sustaining industries. The taxes in general are higher in Kansas for businesses than in surrounding states with the exception of Colorado. With Boeing leaving and Hawker threatining to do so last year it's time for the city to get into high gear into attracting other industries to the city.

[zorobabel]

No, Wichita is no Detroit. Wichita's population grew by 13% in the 90s and 11% last decade, while the metro area population grew by more than 20% last decade. The median income in Wichita is higher than in OKC, Tulsa, Topeka, KCK, or KCMO, but lower than in Denver and Omaha, meaning it is perhaps a bit above the regional average. The unemployment rate in the Wichita MSA, though certainly higher than it should be, is lower than in KC and Denver, and significantly below the national average. So it's not a city in rapid decline.

That said, yes, Wichita absolutely needs to go to considerable lengths to diversify its economy. The IT industry seems to be quite weak in the city, and that is one area for growth. There is also massive potential in the wind energy sector since the area around Dodge City has practically the highest potential in the nation for wind energy development. A Texas-based company is building a $2 billion power line to carry electricity from Kansas to Indiana; BP is building a nearly $1 billion wind farm near Mulvane. It'd be better if those were Kansas companies, or at least local companies were more involved. Already 1,000 Kansans are involved in manufacturing turbines or related parts, but none of those are in Wichita.

I'm not a paid expert. Rather I'm just throwing out ideas, but hopefully the city will work to diversify its economy. With Bombardier planning its major expansion and Spirit thriving, I hope the city leaders won't slip into their aerospace comfort zone again.

[GraniteStater]

Originally Posted by zorobabel

No, Wichita is no Detroit. Wichita's population grew by 13% in the 90s and 11% last decade, while the metro area population grew by more than 20% last decade. The median income in Wichita is higher than in OKC, Tulsa, Topeka, KCK, or KCMO, but lower than in Denver and Omaha, meaning it is perhaps a bit above the regional average. The unemployment rate in the Wichita MSA, though certainly higher than it should be, is lower than in KC and Denver, and significantly below the national average. So it's not a city in rapid decline.

That said, yes, Wichita absolutely needs to go to considerable lengths to diversify its economy. The IT industry seems to be quite weak in the city, and that is one area for growth. There is also massive potential in the wind energy sector since the area around Dodge City has practically the highest potential in the nation for wind energy development. A Texas-based company is building a $2 billion power line to carry electricity from Kansas to Indiana; BP is building a nearly $1 billion wind farm near Mulvane. It'd be better if those were Kansas companies, or at least local companies were more involved. Already 1,000 Kansans are involved in manufacturing turbines or related parts, but none of those are in Wichita.

I'm not a paid expert. Rather I'm just throwing out ideas, but hopefully the city will work to diversify its economy. With Bombardier planning its major expansion and Spirit thriving, I hope the city leaders won't slip into their aerospace comfort zone again.

Why would a Texas company be building another power line from Kansas to Indiana? Indiana should not have any issues with electricity supply considering it has filthy coal plants all over the state. One has to wonder when they will convert them to run on natural gas with wind as a back up considering prices are falling off

[zorobabel]

^ Kansas regulators OK power line from wind farms to Missouri, points east - KansasCity.com (http://www.kansascity.com/2011/12/08/3309578/kansas-regulators-ok-power-line.html - broken link)

"Lawlor said energy buyers in Missouri, Illinois and Indiana will have access to the power shipped from Kansas. Customers in several other states also will be using the Kansas electricity because of regional affiliations that jointly develop power grids."

I think it has more to do with allowing electricity from Kansas to be more readily available to customers in the east by expanding its connection with the grid and is not necessarily meant for customers in the state of Indiana.

As an aside, there are $7 billion worth of wind energy projects in the pipeline right now for the state of Kansas.

[Ketabcha]

Gee, I'm sorry to hear this. I lived in Wichita for 5 years in the late 50s early 60s (McConnell, actually) and I was young but I seem to remember that Boeing was the major employer in the area. I've always equated Boeing with Wichita (not Seattle).

Someone mentioned that McConnell may go in the next round of base closings. Has that been a fear for a time now? That would cause a huge drain on the local economy.

Or maybe I am not remembering this correctly. It sure seemed that most of my friends from civilian families had a parent who worked for Boeing.

[drjones96]

Originally Posted by Sco

Isn't it an open secret that Hakwer is on their way out of town?

The play they tried to make going to Baton Rouge was huge bluff. Their executives were playing the union and the local & state government in order to get some concessions, tax breaks, and money for staying. In reality leaving would have hurt them more than staying. Moving production lines for a half dozen different aircraft platforms isn't exactly a trivial excersize. They could also plan on losing at LEAST half of their engineering staff if not more.

Originally Posted by Sco

I think McConnell will be gone in the next round of base closings.

You could very well be right.