While Oklahoma is still basking in the afterglow of Boeing’s announcement that it will be bringing 800 new jobs to its Oklahoma operation, Kansas is, well….spitting mad at what officials there claim is a betrayal of a commitment to grow its Kansas presence, not eliminate it.
That’s on top of 550 jobs it announced were headed here late last year.
Kansas lawmakers are steaming because Boeing pledged that if they’d help land a multi-billion dollar, Air Force refueling tanker project last February, it would create 1,500-plus new jobs in Wichita.
Instead, the work will go to Boeing’s facilities near Seattle, in San Antonio and Oklahoma City. The aerospace giant is shuttering the Wichita facility and the 2,160 jobs there. Kansas says an estimated that $1.5 billion in payroll will vanish in the next 10 years.
Perhaps proving the limits of government-financed business incentives, Kansas had over time handed the aerospace giant more than $4 billion in municipal bonds and tax breaks.
In recent days, cries of betrayal, lies, and corporate greed have dominated Kansas headlines, lawmaker reactions, blogs, editorials and the public response.
“If it is true that Boeing has wanted to leave Wichita for a very long time, that makes its request for Kansas’ help in securing the tanker contract even more duplicitous and despicable than most of us initially believed. Boeing’s decision was not made until Dec. 30? In a pig’s eye,” wrote one author in a Kansas letter to the editor.
A Kansas City Star editorial a week ago went much further.
The editorial said, “Donna Ginther, director of Kansas University’s Center for Economic and Business Analysis, noted that while morally scummy and politically questionable, Boeing’s decision is straightforward business thinking: ‘Boeing answers to its shareholders. Using business and ethics in the same sentence is almost an oxymoron.’ ”
Oklahoma officials have been empathetic and it’s no wonder; it has been left at the altar numerous times in the last 20-plus years. The lessons have been painful, but have effected changes.
“Well, you know, Boeing’s been [in Kansas] a long time and anytime you have a situation like that, emotions run high,” said the Oklahoma Department of Commerce media relations manager Dustin Pyeatt.
Gov. Mary Fallin said, “My heart goes out to those (Kansas Boeing employees). However, as with the recent relocation of Boeing staff from California to the Boeing Oklahoma City facility, our state stands ready to welcome all employees and their families who will now call Oklahoma home. Oklahoma City is a wonderful community and a wonderful place to live, work and raise a family. I know Boeing employees will agree.”
But in news reports Boeing has not stressed the concept of relocating Kansans. Rather, it has said it will do all it can to help counsel and transition the 2,160 employees as they head for unemployment and search for work.
Boeing traces its roots in Kansas to the late 1920’s. Wichita once billed itself as the aviation capitol of the world largely due to the aerospace giant’s presence.
Oklahoma City officials and its $7.3 billion aviation industry may beg to differ with that, but that’s not really the point.
Boeing’s Wichita operations had grown into a sprawling, 400-acre complex of 97 buildings that had become expensive to maintain.
Boeing’s general logic for the move was contraction in the Pentagon’s budget.
Indeed, U.S. Defense Secretary Leon Panetta has been quoted saying the nation’s defense budget will shrink by $450 billion in the coming decade.
Defense contracts notwithstanding, the aircraft giant scored some major coups last year in addition to the billions in tanker work:
– Last year in Dubai, it inked an $18 billion deal with Emirates Airline, the largest contract in Boeing history. It includes delivery of 50 extended-range 777-300 jets. Delivery is scheduled in March,
– The company held onto a $3.5 billion contract for the U.S. Ground-Based Midcourse Defense (GMD) missile shield. It had to beat back challenges from LMT and Raytheon to secure the award, according to a news report by Susan J. Aluise, executive editor of National News Syndicate, a Washington, D.C.-based news organization focused on global business, national security, information technology, transportation and financial services.
Boeing is obviously bent on looking at long-term economies. Its behavior of late has been clearly about cutting costs, capturing incentives and hot pursuit of deadly serious, pro-business climates.
That means lasting benefits: lower labor costs, cheaper operating expenses, right-to-work protection and generous incentives for new jobs for rank-and-file and high-paying professional jobs.
Oklahoma was dressed up and ready to go to the party.
Sooner economic developers have learned a lot in the past decade and more – some of it quite painfully.
And, if the push to eliminate personal income taxes comes to fruition, that may be an even greater affirmation of the state’s decision to put on that party dress.