Spirit breaks ground for $1 billion expansion, new jobs
Spirit AeroSystems' newest building in Wichita will be high-tech, 70 feet high and house 2.3 million aircraft parts.
The aircraft supplier and city's largest employer revealed plans Monday for a 150,000-square-foot building — part of a $1 billion expansion that includes 1,000 new jobs.
The $23 million building, which Spirit calls its Global Digital Logistics Center, will house and distribute parts Spirit uses throughout its Wichita factory on south Oliver. It also will free up space in a building next door to create what company officials call a "center of excellence in material cutting."
The new building replaces 500,000 square feet of space throughout Spirit's campus used to store parts.
It will do so by building up — seven stories up, said Ron Rabe, Spirit senior vice president of fabrication and supply chain.
The new building will use automation to house and retrieve those parts.
"As our production rates increase . . . and we expand work on other programs, the timely logistics and delivery of aircraft components becomes even more critical to ensure our success," he said.
Improvements in technology and automation will allow Spirit to better handle the receipt and delivery of more than 51,000 parts daily in the new building, Spirit CEO Tom Gentile said.
"This new digital logistics center will help us manage that at four times the rate of productivity," Gentile said. "It will reduce our dock-to-stock, it will improve our picking accuracy and production and it will make us a more efficient manufacturer as we serve the 11 million square feet of manufacturing space that we have here in Wichita."
Rabe said some of the 1,000 new jobs Spirit is adding from its expansion between now and 2019 will be assigned to the new building, though he said he didn't know how many.
Nearly half of the new building, located on east Colfax Street just north of Spirit's main plant, will be paid for by the city of Wichita and Sedgwick County — $7 million from the county and $3 million from the city. The remaining $13 million will be paid by Spirit. The city's and county's cash contributions will be held in escrow and paid out incrementally during construction, according to a development agreement.
The city and county also will hold the mortgage on the new building through an entity called Eclipse Investment Association.
Mayor Jeff Longwell said at the ground breaking that the new center and Spirit's expansion is "critically important to Wichita" and the partnership between the company, city and county made it work.
"Even more importantly, when you have someone like Tom Gentile that says, 'Look, we know what we have in Wichita. We want to build our footprint. We want to grow in Wichita. Let's figure out how to make it happen,'" Longwell said. "(It's) probably not the perfect position of strength to negotiate from, but we like your commitment to Wichita, Tom."
The new building is expected to be completed by early summer 2019, and it will probably take the remainder of the year for the company to move in its people and parts, Rabe said.
Gentile said the new building will free up space in Spirit's distribution center that is just south of the new construction.
It's there that Spirit will eventually create a material cutting center of excellence, which Gentile said will also increase Spirit's efficiency and its costs to manufacture parts for Boeing airplanes, including the fuselage of the 737.
The material cutting center will "not only make Spirit more competitive but our entire local supply base, because we'll be able to buy direct from the mills for material at very good rates based on our economies of scale," Gentile said. "We'll be able to cut the material to size and distribute it to our local suppliers so that they can be more competitive."