Wichita, Kansas is known as 'the air capital of the world'. In WWII, the B-29 bomber was assembled in Wichita. Private aircraft have been assembled there for years.
Boeing and Wichita have a rich history together. What follows is a sad tale of what a 'job creator' really does when everything, and I mean EVERYTHING, is handed to them, from tax breaks to a congressional delegation that worked for years as Boeing lobbyists.
The story of Boeing and Wichita gives lie to Mitt Romney's fantasy about larding up corporations, believing that they'll do the right thing and create jobs.
The history of Boeing in Wichita goes back 85 years, when a local Wichita bank saved Boeing's bacon.
In 1935, when a Boeing XC-17 experimental bomber crashed, a group of representatives from some of the nation’s top financial institutions and banks met in Seattle to discuss the fate of the Boeing Co. One by one they pulled out, except one.
Arthur Kinkaid, of Wichita’s Fourth National Bank, believed in Boeing. The bank assumed the entire loan to keep the company in business – and in Wichita.
...The Wichita-built Boeing line of trainers and the B-29 Superfortress pushed the Wichita factory into the national forefront of military activity.
The Wichita plant also produced the B-47 Stratojet and the B-52 Stratofortress bombers as well as the Waco CG-4 glider – used in the invasion of Normandy.
As you may remember, Obama's grandmother worked at that Boeing Wichita plant during World War II. She carpooled with other women from Augusta, KS to work there.
After the war, the Wichita plant continued to assemble military aircraft, primarily the B-47.
Plant II was reactivated in March 1948 for modernizing and modifying B-29s and B-50s, and when B-47 production began six months later, 1,400 people were on the payroll. Employment rose through the years until it passed 35,000 in 1957.
In all, 1,390 B-47s were produced at Wichita. Engineering responsibility for the program was transferred to Wichita from Seattle in 1951, and two years later the Kansas facility was named second source for B-52 Stratofortress production. Tooling-up and production of the B-52 were conducted concurrently with manufacture of the B-47 until the latter program ended in 1956.
In recent years, the Wichita plant has been used to customize and configure Air Force One.
Of course, the 'job creator' Boeing has demanded - and gotten - loads of cash from the city and state. Wichita has paid dearly for the privilege of having a Boeing plant in their city.
Since 1979, Wichita has issued more than $3.5 billion of industrial revenue bonds to help Boeing finance plants and facilities, city figures show. The manufacturer has received $650 million in property-tax relief.
“Boeing is a poster child for corporate tax incentives,” state Representative Jim Ward, a Wichita Democrat, said in a statement. Kansas will be “less trusting” in awarding such benefits in the future, Ward said. Boeing got sales- and property-tax breaks and infrastructure investment “at every level of government.”
In addition, this 'job creator' is also one of the biggest tax cheats in the country.
CEO: W. James McNerney (According to Forbes, McNerney is the 101st most highly compensated CEO, pulling in a cool $58 million over the last five years.)
2010 Pre-tax Profit: $4.5 billion
How Boeing avoid paying US taxes: According to MSNBC, “despite a double-digit tax rate, Boeing has managed to escape paying federal taxes for the last three years thanks to a plethora of foreign subsidiaries, which act as a tax haven. According to Citizens for Tax Justice, the airplane maker paid 0.3 percent of its pre-tax income in federal income taxes in 2010.”
Boeing fun-fact: Boeing may be a defense contractor that's flush with cash, but it reportedly uses prison labor to assemble cable assemblies for the F-15 fighter. At least the jobs are in the US!
Recently, Boeing was engaged in heavy competition to build the KC-46A tanker for the US Air Force. Also in the competition was EADS, which is the parent company of Airbus. Boeing told the Kansas congressional delegation that Wichita was targeted to be the finishing center for the tankers, which would have added several hundred jobs to the plant. The Kansas delegation, almost all Republicans, jumped to do Boeing's bidding and lobbied the Pentagon hard for Boeing to be awarded the KC-46A contract. This contract has been open since 2002 and it was a huge fight between Boeing and EADS - and the Kansas delegation helped turn the tide toward Boeing.
Must be nice to have an entire state delegation doing your lobbying for you, isn't it? But they were told that the rewards for their state would be substantial:
Members of the Kansas delegation say Boeing should live up to its commitment to put tanker work in Wichita. The state’s congressional delegation worked for years to help Boeing secure the contract.
When Boeing won the contract, it said that the tanker would support 50,000 jobs at Boeing and its suppliers in the U.S. It said that about 7,500 of those jobs would be in Kansas, with an annual economic impact of $388 million. Several hundred of them were expected to be at the Wichita facility.
In February, Boeing finally won the $3.5 billion dollar order to manufacture the first 18 KC-46A's. Great news for Wichita, wasn't it? They'd get a slice of that pie through increased jobs, offsetting the huge financial incentives the city had given Boeing since 1979. Yay for the 'job creators'!
Not so fast. This is what the 'job creator' Boeing actually did:
Boeing Co. said Wednesday it will close a defense plant in Kansas, sparking criticism from lawmakers who said the company reneged on a pledge to expand the facility after winning a big Pentagon contract.
...The announcement came almost a year after Boeing, according to lawmakers, reiterated a pledge to create 7,500 jobs in Kansas after winning the fiercely contested contract to supply refueling tankers for the Air Force.
Chicago-based Boeing, which beat European Aeronautic Defence & Space Co., or EADS, to secure the contract last February, had promised the tanker deal would support more jobs at the plant and among outside suppliers in Kansas as it converted wide-body 767 jets into tankers.
Don't you just hate it when 'job creators' screw you? Especially when they are your BFF and then suddenly refuse to speak to you! Oh noez!
It’s discouraging, Moran said, that Boeing’s CEO declined invitations to meet with Kansas officials and the congressional delegation, the union and employees to discuss what could be done to change the outcome.
So, Wichita is not only NOT getting the tanker work, but the entire plant is closing. The Kansas delegation, Republicans all, are of course up in arms. Maybe this will buy them a clue.
And what's ahead for Wichita? A grim forecast:
The loss may cost the local economy $1.5 billion in forgone wages over 10 years, said Jeremy Hill, director of Wichita State University’s Center for Economic Development and Business Research. Another 8,200 jobs may be at risk, depending how much Boeing’s suppliers are affected by the move, he said.
Remember this sad, sorry tale when Mitt Romney and other GOPers babble about giving tax breaks, incentives and lowering regulations on these precious 'job creators'.
I'll add that Republican foot soldiers can't see the facts through a haze of right-wing ideology. I was perusing the online story of this sad tale in the Kansas City Star this morning, and one wingnut was babbling about how Boeing was right to take the jobs to lower-cost states (San Antonio is now getting much of this work) and that Boeing isn't required to give 'social welfare' to Wichita. Imagine that! A living wage is now 'social welfare'! No wonder the pillaging of the middle class is going so swimmingly for corporate America. Another bemoaned Boeing's corporate taxes, 'the highest in the world', for them having to close the Wichita plant. Not true, as noted above - but facts don't matter to these Ayn Randians.
*edited to remove a wanton B designation to KC.