Fallout from Boeing’s Wichita move continues

Wichita (KS) politicians continue to grouse about the decision by Boeing to close the defense operations there and move jobs to Oklahoma City, San Antonio and Puget Sound (Seattle).

The Seattle Times has this article, quoting the Wichita mayor and other officials. The portion of the article that caught our eye is this:

“We thought we had a marriage,” said Wichita Mayor Carl Brewer, who until his 2007 election was a business manager at Spirit AeroSystems, the airplane-manufacturing operation sold off by Boeing two years earlier.

“It’s taken a lot of work for us to control our outrage,” he said. “So don’t ask me… are you outraged, because the answer will be yes, with probably another four-letter word attached to it.”

Kansas politicians feel particularly “angry and disappointed and dismayed,” as one county commissioner put it, because they led the Republican flank of the decadelong congressional push to secure the $35 billion Air Force tanker contract for Boeing.

In return they were told the company and its suppliers would generate 7,500 direct and indirect jobs after Boeing clinched the contract last February.

“We as a community demonstrated our loyalty to the Boeing Company when they asked us to stand behind them and to go fight for them,” Brewer said.

Now he’s singing a different tune. “Don’t think for one second that we are not exploring our opportunities to go out and recruit Airbus… We are making those phone calls.”

Well, that’s going to be a tough sell. During the tanker competition, Kansas politicians, notably then-Sen. Sam Brownback (now governor) and ex-Congressman Todd Tiahrt (a former Boeing employee as well) couldn’t say enough bad things about Airbus is their campaign for Boeing’s tanker. Tiahrt was particularly vitriolic, though Brownback was no shrinking violet, either.

Their comments so offended Airbus and EADS that when Airbus was considering whether to expand its engineering center there, some at EADS not only suggested Airbus do so elsewhere, they suggested closing the center entirely and relocating it somewhere more friendly–like Mobile (AL).

Now that Boeing has made a financial decision to close its defense operations in Wichita, suddenly Airbus is the flavor of the week?

We don’t think Airbus is going to be so quick to forget. Kansas politicians will have a lot of fence-mending to do.

Now-Gov. Brownback wants to recruit Airbus. Good luck. Nothing like insulting someone for years then turning around and asking for favors.

Speaking of tankers, France plans to order the Airbus KC-30, a foregone conclusion. But for all the whining from France about the US decision to buy Boeing, we’ll note that no competition was run in France for this tanker contract, although the Wall Street Journal reports the KC-767 was looked at.

18 Comments on “Fallout from Boeing’s Wichita move continues

  1. “Don’t think for one second that we are not exploring our opportunities to go out and recruit Airbus… We are making those phone calls.”

    Too funny, sorry guy you’ve been screwed by big B and A isn’t going to ride to your rescue. You can wave bye bye to the money you have given Boeing in tax breaks as well. This is the way of modern American corporate life, no one wins apart from the company executives.

  2. Pingback: Odds and Ends: Air India’s cost of 787s « Leeham News and Comment

  3. I thought Boeing only had about 2000 employees in KS, and most of those people have been offered to relocate to other Boeing facilities. Is that not true?

  4. Wasn’t France crying about the US tanker selection process (during the KC-X) and the then foregone conclusion that the KC-46 would be selected over the KC-45? Didn’t President Sarkosi appeal to President Obama to make the selection process ‘fair’?

    The shoe was always on the other foot for the A-400M ‘selection’ (the C-17A and C-130J were never considered, well except as leased airlift since the A-400M is 5 years late) and now it is true for the new French ‘tanker compitition’.

    I also thought France would use some of the British A-330MRTTs.

    Maybe France will order the first true tanker transport version of the A-330 by ordering it as an A-330F before the conversion?

    BTW, somehow I doubt that if the USAF had selected the KC-45 that the French tankers would also be built in Mobil.

    Closing the Wichita Boeing Defense plant will save taxpayer money on the KC-46A costs. After all, that would be the real ‘bottom line’. So, flapjack, it looks like the taxpayers will ‘win’, not Boeing executives.

  5. What about the decision to build the MAX? That must have a been a bigger gain for Wichita than the loss of tanker completion work.

    • The B-737 fuselarge for the MAX is not changed a lot, Sprite will still build the fuselarge there in Wichita. The KS Governor is looking to BBD to build the Lear-85 there, and I think he is hoping to have BBD move some C-Series production there, too.

  6. More details wrt French tanker purchase plans at http://www.xe.com/news/2012/01/09/2388037.htm?utm_source=RSS&utm_medium=TL&utm_content=NOGEO&utm_campaign=News_RSS_Art2
    “Asked at a news briefing about previous suggestions that France’s own tanker requirements may be opened to competition, Longuet, who became defence minister last year, commented, ‘that was no doubt before the U.S. decision’.

    He also said the purchase of European tankers made sense to French forces for operational reasons.

    Industry sources say France has considered leasing tankers from Britain for budgetary reasons and as part of an Anglo-French defence pact, but that operations in Libya convinced its planners that an independent capability would be more efficient.

    France is expected to buy from five to seven tankers, which refuel fighters and other aircraft to extend their range and time in the air.

    The new tankers would replace elderly Boeing C-135 tankers ordered in the 1960s by General de Gaulle”

    • Well, if the USAF had bought the KC-45, then there would be no KC-46 program to compete with it for the French tanker.

      EADS has sold 28 A-330MRTTs today, the French order next year will push the total up to about 35. Todate Boeing has sold 18 KC-46As, and 8 KC-767A/Js, with a potential order of another 161 new tankers for the USAF. That will be a total worldwide fleet of 187 KC-46/-767s to a worldwide fleet of 35 KC-30/A-330MRTT/TTs. So which allied tanker makes the most operational sense?

      Isn’t India considering buying up to 12 KC-46/-767s?

      • I don’t think Boeing even bid on India tankers. The contest is and was between A330 and IL-76.

        IMO, the IL-76 makes more sense for India. Given that the tanker will never leave Indian air space, they don’t need a big tanker for force projection. These tankers are used to top up the deep strike nuclear bombers just before going into China or Pakistan. They don’t really need a fancy A330 with huge capacity. Plus they already operate IL-76s and can get them very cheap.

  7. The USA never runs competition with european companies, it was not the case for the C130 neither the C17 or anything else except the tankers. But in such a manner that the american competitor can’t loose.
    Why would the french state open competition when it needs a few (5 to 7) multirole tankers and when its closest allies like UK and UAE already chose the A330MRTT ?

  8. Why not, they are already buying the Boeing C-17A and P-8I, and possibly the F/A-18E/F. India also has the AH-64D on order and is considering ording the CH-47F. India canceled the A-330MRTT order partly because of its expense of $215M USD each, and that is the price before any maintenance, spares, training, or support package offered by EADS.

    They couyld order one of three versions of the B-767-200 tanker. The Italian version the KC-767A, the Japanese version KC-767J, or the US version, the KC-46A.

    The IL-78 tanker is eliminated because it does not have a Boom, which they now need to refuel their C-17s and P-8s.

  9. Tiahrt made clear the tanker had to be American & forget the rest. He made sure the message came out.

    http://www.youtube.com/watch?v=36PbvMpjsmw
    http://www.youtube.com/watch?v=lUXzLkz783Q

    The USAF was told to make sure any capability on top of what a KC767 can do would not count in any way & the cheapest must win. A change of purchasing startegy making sideliningh the more capable KC330.

    In an earlier tanker bribery event Boeing had to pay $600 mill to avoid an embarrassing law suit. Boeings CEO, CFO got fired/jailed in the process.

    The rest of the world thinks the last competition was a total political fix. EADS/NG won first but then Xenophobia & flagwaving still works. Competition is good, but throwing mud gives dirty hands.

    Maybe the french AF will order MRTTs with better engines.

  10. In the long run what real fallout will there be? This situation is about to be repeated throughout the US defense industrial base and this episode will be remembered mostly as the beginning of a consolidation trend. Under the cost plus contracts the Pentagon has lived by since WWII contractors were all but encouraged to spread the contract as far and wide as they could, since the government picked up the extra cost and the contractor gained political support for the program by spreading it out to as many congressional districts as possible. Many programs managed to have suppliers located in all 50 states. Now with the Pentagon going to fixed price contracts you see a move to rationalize the assembly process since the Pentagon is signaling it will no longer pick up the bill for running unnecessary operations.

    I was honestly suprised that Boeing did not publically revise their original 2,500 direct jobs promise from the first contest. Since, everyone involved knew they didn’t need much in the way of support from Wichita by going with a P-8A type solution were most of the militarization work was done on the assembly line in Washington and all Wichita had to do was attach the boom, installing the military electronics and painting the thing (as opposed to doing a complete tear down and rebuild for the original KC-767AT). This work could and it is being done for much cheaper by simply completing the planes in Washington. If EADS had actually under-bid to beat Boeing on the contract they would now be facing a similar choice, give up the superfluous Alabama assembly site or make a profit on the program. Once the Pentagon said they wouldn’t renegotiate the fixed price cost on the contract Wichita was out, and Alabama would have been out if EADS had won.

    • Defense is about the last “upper crust” industrial base the US has.
      This has significant impact on the trade balance.

      Depending on the dollars future position there is a Big Black Hole ahead.

    • Interesting analyses. Not sure though Alabama would have been out. Alabama was more then the tanker. A330F would have been converted there and probably A330 / A340 cargo conversions later on + other future opportunities (A400M). IMO there was/is a more strategic drive to go there.

  11. I can’t see Airbus being so upset about what some Mickey Mouse politicians did spout off in a time that in corporate history is equivalent to stone age (i.e. day before yesterday) that they would forego working with a highly qualified, and probably very grateful and therefore loyal workforce, given the dearth of skills in the current engineering world. If Kansas provides the right sort of incentives, I am sure Airbus/EADS would take a very close look. Dogs bark, the caravan moves on.

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