SAN ANTONIO — At Boeing’s San Antonio facilities located on the redeveloped Kelly Air Force Base, a massive high-bay hangar takes center stage.
Inside, multiple C-17 military transports, KC-135 refuelers and Boeing’s huge 747-800 freighter were visible from a lookout point of the sprawling hangar.
It is the largest free-standing, high-bay hangar in the world, Boeing says. And it sits among Boeing’s 1.4 million square feet of building space and 3.5 million square feet of ramps, run-up areas and parking pads.
From the site, Boeing operates one of the largest aircraft maintenance, repair and overhaul facilities in the world. That will grow as Boeing moves hands-on maintenance and modification work from Wichita to San Antonio as it closes facilities on South Oliver by the end of 2013.
The move will mean roughly 400 more jobs in San Antonio, where Boeing employs about 2,700 today. The first airplane is expected to arrive in November or December.
In January, Boeing announced plans to close the Wichita facility and move work to San Antonio and Oklahoma City. Meanwhile, work on Boeing’s tanker for the Air Force that was to come to Wichita will now go to Puget Sound in Washington.
The decision was due to high overhead costs, the winding down and completion of programs and, with military budget cuts, little hope for new work, Mark Bass, a Boeing vice president, said in January. Overhead costs at Boeing’s San Antonio facility are about 70 percent less than in Wichita, Bass said at the time.
One reason is the Wichita facilities have a lot of empty or little-used space, said Kevin Devine, Boeing’s site leader in San Antonio, who has worked in Wichita.
“We were working really hard on overhead costs,” Devine said. “But the biggest single cost that we had was the structure. You look at the people; you look at the rates; it really wasn’t that.
“The cost of the facility itself was the cost that we couldn’t … get around.”
Boeing started operations at the San Antonio site in 1998 after the government decided to close Kelly Air Force Base as part of a base realignment and closure plan.
City leaders began to transform the site into an industrial and business park, now called Port San Antonio. Boeing is an anchor tenant.
The key reason for the lower costs in San Antonio is that Boeing leases its space. It signed a 20-year lease with two five-year options at “very favorable terms,” Devine said.
Recently, Port San Antonio – which owns the buildings that Boeing leases – wanted to renegotiate the lease at higher terms.
“Frankly, I said, ‘No, thank you. We’re happy with what we have,’ ” Devine said.
The San Antonio and Oklahoma City sites are non-union, but that wasn’t a key factor, Boeing said.
“Labor costs figure into your overhead rates, but it’s not the driving force,” Devine said.
Boeing receives help with workforce training expenses but does not receive state incentives.
For example, when work on Boeing’s 787 Dreamliner came to San Antonio last year, the board of directors of Port San Antonio awarded St. Philip’s College $200,000 for customized training of Boeing workers who would do rework and modifications, according to a Port San Antonio newsletter. The work meant 400 jobs.
San Antonio’s work
The Wichita and San Antonio Boeing plants perform different tasks.
San Antonio’s work is with repairs and upgrades involving volumes of airplanes and repetitive work, Devine said. Wichita, meanwhile, is heavily involved in “one-off” type developmental platforms.
San Antonio has physical space for more airplanes than Wichita. And it has the capacity for more work, he said.
There are five positions to put airplanes in Wichita, Devine said. San Antonio can handle up to 22 wide-body jets or up to 33 narrow-body jets. On a recent visit, 37 airplanes were inside three hangars on the site.
The facility also includes a paint and “depaint” shop for non-destructive inspections, drop-in maintenance, logistics support, corrosion control, and back shops and office space.
This year, the site expects to work on 11 KC-135s, down from 21 last year, and 45 C-17s. It also performs work on C-130s under an avionics modernization program, does refurbishment on Boeing’s new 747-800 freighter, and is incorporating changes to and refurbishing some of Boeing’s commercial 787 Dreamliners.
Wichita and San Antonio both have “great workforces,” said Jerry Paquette, operations manager for Boeing’s KC-135 program in San Antonio, who has worked in both places.
Boeing has made job offers to several hundred Wichita employees, most of them for jobs in Oklahoma City. But some are for San Antonio and Puget Sound, and a handful are for St. Louis.
It’s also working to help employees find employment with Boeing suppliers and others. Officials declined to say how many have accepted positions.