As Textron prepares to lay off hundreds, Kansas Democrats blame tariffs and trade wars

As a Wichita-based aircraft manufacturer prepares to lay off hundreds of workers, Democrats have ignited a fight over whether the trade policy of President Donald Trump and Republicans is to blame.

Textron Aviation’s parent company Textron Inc. signaled last week that it plans to eliminate up to 875 positions as part of a restructuring plan intended to “improve overall operating efficiency.” The layoffs mark a moment of upheaval for one of Wichita’s largest companies, which employs more than 9,000.

The Kansas Democratic Party on Monday blamed Republicans for the looming reductions. Republican lawmakers pushed back, faulting Democrats for delays in approving a sweeping new North American trade agreement.

A Wichita-based economist cast doubt on the idea that trade disputes led to the layoffs.

The argument played out as Trump and congressional Democrats reached a deal that could clear the way for Congress to approve the agreement, which could hold consequences for several aspects of the Kansas economy – including aviation.

“875 Kansans are about to lose their aviation jobs in Wichita – the Air Capital of The World – all because of the GOP’s reckless tariff fights and trade war. Kansas Republicans’ inaction is having devastating consequences. Enough is enough!” the state Democratic party tweeted.

Republican Rep. Ron Estes, who represents Wichita and south-central Kansas, in an interview flatly rejected the idea trade tensions are responsible for the company’s troubles. He linked the layoffs to Textron’s certification of the Cessna Longitude and the suspension of its Hemisphere business jet project.

“I don’t know how you would have created that other than you’re just trying to make something blatantly political out of a business issue,” Estes said.

Rep. Roger Marshall, a Republican who is also running for U.S. Senate in Kansas, said he couldn’t “connect the dots” between the layoffs and trade policy.

A Securities and Exchange Commission filing from Textron Inc. said the reductions are primarily related to engineering positions following the completion of the Longitude certification and “reduced requirements for ongoing development programs.” Textron Aviation didn’t respond to a request for comment on how the trade war may have impacted layoffs.

A company spokesperson also declined to disclose the number of people impacted in Wichita. She said the 875 positions cited in the SEC filing is for the parent company and not specific to Textron Aviation. The company manufactures Beechcraft and Cessna planes.

The Worker Adjustment and Retraining Notification Act requires businesses to give a 60-day notice before closing a plant or mass layoffs, defined as affecting more than 50 people at a single site. However, the law has exemptions, such as “unforeseeable business circumstances.” A company spokesperson said a WARN notice was not required, but did not answer why not.

Unlike other Kansas Republicans, Sen. Pat Roberts appeared open to the possibility that trade fights are contributing to the layoffs. He said that he doesn’t know about Textron’s “direct situation” but said “everybody gets affected by tariffs and more especially our aircraft industry.”

“We’ll be in touch with Textron, figure out just exactly what’s involved here and maybe we can get some relief,” Roberts said.

Jeremy Hill, director of the Center for Economic Development and Business Research at Wichita State University, doubted that international trade disputes directly caused the layoffs. However, he said, they have hurt the industry as a whole.

“I don’t think there’s anyone in aerospace who would disagree with the second half of that statement,” Hill said.

Tariffs can increase costs and eat into the profit margin at various points in a global supply chain. Which suppliers hurt the most depends in part on long-term contracts with set prices and available inventory. Short-term, Hill said, companies may have to bear some of the costs. In the long run, however, they will increase prices and push costs onto the consumer.

The United States would likely be better off than China in that situation, Hill said, because China and Asia in general is the largest growth market. Consumers in China can expect to share a larger portion of the financial costs of tariffs as they purchase the final products from U.S. companies, but U.S. manufacturers will still feel the pain.

“Biggest picture: Everyone hurts when you move away from a free market,” he said.

One caveat is if the trade war is resolved with an outcome favorable to American companies, including a solution to intellectual property rights issues.

“If we fix that soon, Wichita would come out great, Textron would be better than our existing environment we’re in right now,” Hill said, adding that he sees a quick, favorable outcome as unlikely.

The Center’s Aerospace Current Conditions Index, which is based on several indicators of the aerospace manufacturing industry, shows the industry continues to improve.

The fight over the layoffs came as House Speaker Nancy Pelosi announced a deal on Tuesday over the U.S.-Mexico-Canada Agreement, the successor to the North American Free Trade Agreement, or NAFTA. The trade pact holds the potential to affect the aviation industry, given that plane manufacturers regularly rely on international components.

Timothy McClees, vice president of legislative affairs for the Aerospace Industries Association, said in September that USMCA will limit surprises when companies need to import parts. Overall, the agreement supports the free flow of goods, he said.

Kansas lawmakers quickly hailed the agreement. Rep. Steve Watkins, who sits on Republican leadership’s whip team for the agreement, called the agreement a win for “Kansas farmers, workers, and families.”