Boeing(@BoeingDefense) today announced the closure of Boeing Defense, Space & Security (BDS) facility in Wichita resulting in over 2100 jobs being last by the end of 2013. Blaming the market environment and defense budget cuts, the company announced the cuts would occur toward the end of 2013 despite repeated telling Kansas officials and the Kansas Congressional delegation that they company planned to add 7500 to the Wichita area if they were awarded the refueling tanker contract. Kansas and City officials lobbied hard on behalf of Boeing on the awarding of the contract. Less than a year ago, Boeing officials were still touting that number after they were awarded the contract in February 2011.
Times have changed! The company no longer needs the help of government officials. They have the contract and apparently do not feel a need to honor the commitments that they made to get the support of the Kansas congressional delegation. This should send chills down that back of politicians everywhere. They depend on being able to steer contracts and bills through Congress to award (or payback) local companies. This a big plant with a very skilled work force in a city with deep aviation roots. It a plant this size can be moved to another state, it should be relatively easy for others to do the same.
Boeing has spent over $3.2B with more than 475 local suppliers in 2011. Many of these suppliers will continue to supply parts and services to other Boeing facilities. But chances are good that many of these suppliers will also relocate in an effort to remain competitive with other potential suppliers. When building a product as large as Boeing does, a lean and efficient supplier network is crucial. Location will make the difference in the awarding of future supplier contracts. Kansas stands to lose 2 – 3 times of indirect jobs as a result of this decision by Boeing.