Even beginning investors know the phrase, “Don’t put all your eggs in one basket.” Of course, the thinking behind this metaphor being that one shouldn’t risk everything on a single venture. Rather, the far smarter play is to spread your risk over several ventures.
Well, everywhere except Wichita, Kansas apparently. For whatever reason, Wichita seems absolutely married economically to the aircraft manufacturing business in this town. Other industries of any size in town exist to support the lives and lifestyles of that labor market. Because of this narrow focus on the aircraft market, we live and die by the economy’s affects on it. To twist another metaphor, when the aircraft business catches a cold, Wichita gets pneumonia. Over the years, Wichita’s made feeble attempts to diversify, but our heart’s not really been in it.
It’s time for that to change and a far more diverse economy become our #1 priority, if you ask me.
Today, Boeing Military Airplane Company announced it’s leaving a community – Wichita – it’s been a part of for 80 years.* When announcing Boeing was awarded the new 767 Tanker contract, “[Boeing] spokesman Bill Barksdale said [in 2010] that 7,500 of those jobs would be in Kansas. That includes existing and new jobs at Boeing and its suppliers, and other jobs created in the community. Boeing Wichita will be the finishing center to convert the jets into tankers.”** Many promises were made to area politicians resulting in statements from their offices that 7,500 Kansas jobs.***
Despite those promises to put 7,500 jobs in the Wichita area, “Boeing said it will move all remaining work from its Wichita facility to other sites, officials told employees this morning. The move will affect 2,100 workers in Wichita, and provide a huge economic blow to the city, surrounding communities and the state.” “The Wichita closure will mean a loss of $1.5 billion in wages over 10 years, Jeremy Hill, director of Wichita State University’s Center for Economic Development and Business Research, has said.”****
Despite those promises to put 7,500 jobs in the Wichita area, “Boeing said it will move all remaining work from its Wichita facility to other sites, officials told employees this morning. The move will affect 2,100 workers in Wichita, and provide a huge economic blow to the city, surrounding communities and the state.” “The Wichita closure will mean a loss of $1.5 billion in wages over 10 years, Jeremy Hill, director of Wichita State University’s Center for Economic Development and Business Research, has said.”****
How sad and how unethical to renege on these promises after so many people went to the mat for Boeing.*** But, as I’ve always said, corporate ethics programs are symbolic of a prostitute getting married in a white wedding gown. Actions define, not mere words.
As if it’s not sad enough Boeing’s going, it’s the why behind their departure that escapes me most. They’re going to consolidate the Wichita operation into their facility at Tinker AFB in Oklahoma City. Where’s the benefit? Both the Wichita and the OKC facility are housed on a secure Air Force Base. The labor markets in both cities function in a right-to-work state environment, so union pressures won’t be anymore or any less. And the costs of living are about the same in both cities. These last two points making the hourly wages of the labor force about the same in both cities. So…where’s the gain in moving?
What this most recent development should demonstrate to Wichita is that it desperately needs more baskets to keep its eggs in. We need to diversify off our dependency on the aviation business. We don't need to run off the aviation industry, mind you, but we need to lure in health care, technology or whatever else firms and workers as much as humanly possible. In other words, we don’t need to run off the aircraft businesses, but we certainly need to spread the risk over several other different industries.
Time will tell whether or not we learn this long overdue lesson or not. If not, then will the last person leaving Wichita please turn out the lights?
*McMillin, M., January 4, 2012, The Wichita Eagle, Boeing to close Wichita plant by end of 2013, Retrieved from http://www.kansas.com/2012/01/04/2162092/boeing-to-close-wichita-plant.html, January 4, 2012.
**KWCH 12 Eyewitness News, January 4, 2012, Boeing to close its Wichita facility by 2013, Retrieved from http://www.kwch.com/news/kwch-news-kah-boeing-tells-employees-its-closing-wichita-facility-20120104,0,4196078.story, January 4, 2012.
**McMillin , M., Feb. 25, 2011, The Wichita Eagle, Air Force Awards Boeing Tanker Contract ,
Retrieved from http://www.kansas.com/2011/02/25/1734764/boeing-wins-air-force-tanker-contract.html#storylink=cpy, January 4, 2012.
Retrieved from http://www.kansas.com/2011/02/25/1734764/boeing-wins-air-force-tanker-contract.html#storylink=cpy, January 4, 2012.
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