Spirit AeroSystems will ask the Wichita City Council today to approve $15 million in taxable industrial revenue bonds, according to the City Council's meeting agenda.
Proceeds will be used to finance the ongoing modernization and expansion of Spirit's facilities, the agenda said.
The bonds will allow Spirit to continue existing programs and services, take advantage of new technology and compete for new business, it said.
The proceeds will be spread across several programs, said Spirit spokeswoman Debbie Gann.
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"It's for things like air-handling equipment, cranes, a clean room for the (Boeing 787 Dreamliner) expansion, doors, machine shop modifications — all the infrastructure we need to continue to build airplanes out here," Gann said.
Spirit is ramping up for rate increases on Boeing's 737 single-aisle aircraft.
"As a result, we're having to make more investment," she said.
Spirit builds parts on all Boeing airliners in Wichita. It employs 10,700 people in Wichita.
Property financed with the bond proceeds will be eligible for sales tax and property tax exemptions for 10 years, beginning the year after the bonds' issuance, the city's agenda said. The bonds will mature on Jan. 1, 2022, and bear 6.76 percent interest per year.
Spirit plans to purchase the bonds itself. They will not be reoffered for sale to the public.
The Society of Professional Engineering Employees in Aerospace, which is in labor negotiations with Spirit, criticized the request.
SPEEA's technical and professional workers rejected the company's 9 1/2-year contract offer in July. The offer included pay and benefit cuts, the union said.
"Spirit is seeking a double subsidy from their own employees," Ray Goforth, executive director at SPEEA, said in a statement. " First, they seek to slash pay and benefits for employees. Next, Spirit demands that these same employees then subsidize the company through their tax dollars."
Gann called SPEEA's comments "posturing and nothing else."
Over the course of Spirit's history, industrial revenue bonds have been key in helping the company grow and maintain the site, she said.
"It's through partnerships like industrial revenue bonds that help us get to where we are today," Gann said.