COULD WICHITA BE THE DETROIT OF AIRCRAFT?

-- Feb. 14--Wichita's business jetmakers sometimes think about Detroit. Not that many years ago, U.S. automakers weren't too concerned about emerging foreign competitors. Productivity was poor, costs were out of control, and they...


"Everybody wants everything to stay here," he said. "That's an understandable emotion, until you look at your shareholders or your board and say, 'Yes, I can be here, but here's my margin.' "

Suddenly, "you become an enterprise that can't attract and allocate capital because you're not efficient enough with (it).

"Be careful what we ask for when we want everything to stay in one place, because that may not give our enterprises the economic answer that we all want in the long run."

Competition no longer 'guys across the street'

The move to put work in lower-cost countries is a direct response to high labor costs and finding less-expensive places to build parts of planes, Boisture said.

"It's no more complicated than that," Boisture said.

The price of an airplane can't rise fast enough to cover cost increases, Boisture said.

"This is a company whose costs are constantly increasing, and the market is not paying us back at the rate they're increasing," Boisture said.

In the past, Wichita business jetmakers Cessna, Bombardier Learjet and Hawker Beechcraft primarily competed with one another, so costs were similar.

In the future, literally "it's not going to be the guys across the street," said Textron's Donnelly.

There's every reason to believe new competitors will have lower cost structures, he said.

In addition, the majority of the orders for business jets are coming from global customers. And that's expected to grow.

"That means we're building stuff in the wrong place, because we're going to be selling it, servicing it and delivering it on the other side of the word," Boisture said.

That will take some flexibility to figure out what that means for the companies in the future, he said.

Outsourcing is not a "zero-sum game," Spirit's Turner said, although it can feel that way in the current down cycle.

Spirit has been a big recipient of outsourcing.

It's facilities do work for Boeing, Airbus, Sikorsky, Gulfstream, Hawker Beechcraft and others.

Airbus turned to Spirit because the Wichita company was on its list of low-cost locations, Turner said.

On the other hand, Spirit is outsourcing work as well.

"You're going to see an ebb and flow as time goes on with those supply networks," as the value of the dollar improves and productivity of sites improve, Turner said. Some things will be done in-house, some not.

With all the projects Spirit has in the works with customers around the world, the Wichita facility can't do everything, Turner said.

"We'd have a terrible time trying to design, build and ship everything out of Wichita," Turner said.

Expectations, needs

Long-term, the market will return and grow. Historically, each up cycle has been more robust than the previous one.

"We ultimately have a growth industry," Turner said.

Eventually, the companies will need a trained work force. They're expecting a labor shortage when the economy turns around.

Long-term, Cessna expects Sedgwick County will face a shortage of enough labor to support all its work, Pelton said.

Cessna has an aging work force, and the number of employees eligible for retirement over the next 10 years is high, Pelton said.

A work force shortage might sound bizarre considering thousands of Wichita workers were laid off in the past year.

But a shortage followed the downturn in the early part of the last decade, Turner said.

"It's going to happen."

Training is vital.

Laid-off workers should be receiving stipends so they can get technical training today, Turner said.

"It's the knowledge of our workers that make the difference," Turner said.

There's no time to train and retrain when the market is booming. The city and state must work to protect aviation jobs in other ways.

In a speech at last week's Wichita Aero Club luncheon, Gov. Mark Parkinson implored members of Wichita's aircraft industry to keep jobs in Wichita if they can.

Parkinson said he recognizes that some states and areas are working hard to woo jobs by offering lucrative incentive packages.

But if the incentives from Kansas are even close, he urged them to keep the work here.

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