Boeing is studying the future of its Wichita site, including whether to close the facility, company officials confirmed Monday.
But the Kansas Congressional delegation and Gov. Sam Brownback said the company promised jobs to the state when it won an aerial refueling tanker contract, and “we expect the company to honor that commitment.”
The Wichita facility, near 47th Street South and Oliver, faces a number of issues, including cuts to the defense budget, product and service contracts that have matured and expired, and limited prospects for future work, the company said in a statement.
“Among the options being reviewed is the potential closure of the Wichita site,” Boeing said in the statement. “Because of defense budget pressures, we are conducting a number of market studies to determine how to best preserve and grow our business, and continue to provide quality and cost-efficient services for our customers.”
Boeing said its study will be completed by the end of the year or in early 2012. Company officials declined to comment beyond the statement.
When Boeing was competing for an Air Force contract for up to 179 air refueling tankers, it told state leaders that winning the contract would mean 7,500 jobs for Kansas, including several hundred at Boeing Wichita, which would become a tanker finishing center. The contract would mean $388 million in economic impact to the state a year, the company said.
Boeing won the contract over Airbus’ parent company, EADS, earlier this year.
“No one fought harder for Boeing’s win of the U.S. Air Force tanker competition during the last decade than the Kansas delegation,” Brownback and the state’s Congressional leaders said in a statement. “And our teamwork paid off.”
Boeing has said for 10 years that Wichita would be the finishing center for the tanker, said Rep. Mike Pompeo, R-Wichita.
“Boeing has reiterated this to me during my time in Congress,” Pompeo said Monday. “It’s my expectation that Boeing will honor that commitment.”
He said the Kansas delegation and the governor will work to hold the company accountable to those commitments.
Boeing Wichita primarily performs maintenance and modification of military and government aircraft. The site performs special mission work on presidential airlift programs – commonly known as Air Force One – and the E-4B Flying Pentagon. It also performs work on the B-52, C32A and C40 fleets.
Boeing currently employs 2,100 in Wichita, down from 2,800 in 2008 and 3,600 in 2006.
In June, the company said it would cut 225 positions in Wichita through the end of the year, through layoffs, job transfers and retirements as it completes some modification programs, including work on the international air refueling tanker. There also has been a lag in maintenance work on other projects and work on the Air Force tanker isn’t expected to begin in Wichita until around 2014, the company said earlier this year.
In the meantime, some Wichita mechanics have temporarily transferred to Everett, Wash. and San Antonio.
Boeing often performs feasibility studies on its sites, said former Rep. Todd Tiahrt, who worked at Boeing before running for Congress. One of those studies led to Boeing’s decision to sell its Wichita commercial business in 2005, which became Spirit AeroSystems, the state’s largest private employer.
“I think they have to have a good understanding of where they are,” Tiahrt said of Boeing.
One of Boeing Wichita’s challenges is its limited customer base, Tiahrt said, and how to get more work into the Wichita area. At the same time, work on Air Force One will slow or go away next year, an election year, as the planes will be used for campaigning.
The Wichita facility also faces uncertainty next year as labor negotiations with its Machinists union open. Rates at the Wichita site are high when compared to other places, such as Boeing’s modification center in San Antonio, Tiahrt said. The area is successfully working to attract aerospace business.
“Kansas has some real challenges in hanging onto the facility,” Tiahrt said. “I think there is a path forward, but everybody is going to have to chip in.”