Updated: February 6, 2012 9:26AM
Faced with defense budget reductions, Chicago-based Boeing Co. announced Wednesday it will close its defense plant in Wichita by the end of 2013.
The closure will cost more than 2,160 workers their jobs and end the firm’s presence in a city where it has been a major employer for generations.
The decision was not entirely unexpected. The company said in November it was studying whether to close the Wichita facility, which specializes in modifying commercial aircraft for military or government operations, to address Defense Department budget cuts. The first layoffs are expected to begin in the third quarter of 2012.
Boeing has had a facility in Wichita since it bought the Stearman Aircraft Co. in 1929.
Employment at the plant peaked during World War II as the company churned out four bombers a day. Its 40,000 workers included President Barack Obama’s beloved grandmother Madelyn Dunham, known as “Toot,” who did her part for the war effort by working the night shift as a supervisor on the B-29 bomber assembly line.
The company remained Wichita’s largest employer for decades after the war.
It still had about 15,000 workers in the city in 2005, when it spun off its commercial aircraft operations in Kansas and Oklahoma. After the divestiture, Boeing kept 4,500 workers for its defense work in Wichita but layoffs have since slashed that number.
The company, a major defense contractor, began looking at closing the plant at the same time the Pentagon was trying to prevent $500 billion in automatic, across-the-board defense budget cuts over 10 years in the wake of the failure by a bipartisan congressional supercommittee to agree on $1.2 trillion or more in deficit reductions.
The decision drew an angry response from Kansas lawmakers who helped Boeing land a lucrative Air Force refueling tanker project in February and had expected thousands of jobs to come to Wichita with it. Instead, the work will go to Boeing’s facilities near Seattle and Oklahoma City.
Modification work on the planes was expected to generate 7,500 direct and indirect jobs with an overall economic impact of nearly $390 million.
U.S. Sen. Pat Roberts said Boeing had promised as recently as February to remain in Wichita if it landed the tanker contract.
Boeing said 24 Kansas-based suppliers for the refueling tanker project will still provide parts as planned.
“In this time of defense budget reductions, as well as shifting customer priorities, Boeing has decided to close its operations in Wichita to reduce costs, increase efficiencies and drive competitiveness,” Mark Bass, vice president and general manager for the Boeing Defense, Space & Security facility in Wichita, said in a statement.
While the Seattle area will build the tanker, engineering and modification work on it will move to Oklahoma City and future aircraft maintenance, modification and support will go to San Antonio, Texas.
Oklahoma will get about 800 jobs and San Antonio will gain 300 to 400 jobs, Bass said. The company will move 200 tanker jobs to its plant in Washington, while moving 100 support jobs, primarily engineering, now in Washington to Oklahoma City in the shuffle.
Boeing said it will continue to have a significant impact on the Kansas economy and its aerospace industry. The Chicago-based company spent more than $3.2 billion with 475 Kansas suppliers last year. Kansas is the fourth largest state in its supplier network, it said.