To the Stars Through Difficulties!

Wichita calls itself the “Air Capital of the World.” That was certainly true during and after the Second World War, but increasingly, Wichita is in danger of becoming the Detroit of the Aircraft Industry.

Recently, after taking a hard line with the Union, Cessna management announced a layoff of 700 employees days after they approved a new contract, through a technicality. Hawker-Beech is going to layoff another 300, all the while working on plans to move to Louisiana. Boeing/Spirit may choose, in the end, not to even bid on the tanker contract.

Like the auto plants in SE Michigan, aircraft plants may be a distant memory in Wichita in another decade.

This past weekend, my family and I attended the Wichita Air Show, at McConnell Air Force base. While it was an exciting and enjoyable show (despite the hours-long waits for shuttle buses to and from the base) one had to wonder what is happening to the American manufacturing industry in general and aircraft manufacturing specifically.

Some will try to blame it all on the Unions, but that is hardly the reason that so many manufacturing jobs are headed south, literally and figuratively. The union man has been vilified by the Right for more than a quarter century, for his supposed greed and alleged lack of sufficient work ethics.

In Europe, the union and company work together to a mutual benefit. Japan has recovered from their “lost decade” and is working back to where they were years ago. Despite dire warnings to the contrary, American workers can still provide a productive work force for American companies.

In the end, America has become a nation that produces very little. It doesn’t have to be this way. Greedy company CEO’s and Senior Management have been focused on the wrong issues and now are blaming the workers for their failures.

The Air Show was a great spectacle, but it may be a dieing event.

William Stephenson Clark

(Blog header and thread photos by the author – yes, I will change the blog header back.)


Filed under The Economy

20 responses to “To the Stars Through Difficulties!

  1. I like your photos! Good job.

    Did you read the article in today’s morning paper: “Interest in wind picks up“?

    Monkeyhawk has been talking for years about a workforce trained in using composite materials to make long wing-shaped thingies (only he says it better!).

    So, if airplanes aren’t selling, or it’s just that airplane manufacturers think their profits will increase by moving or outsourcing… maybe there is a rainbow behind that dark cloud — one that will be in renewable energy, using our wind.

    • The Europeans have a “leg up” in that area, too. Siemens (putting in a plant in Hutchinson, per memory) is German as I recall.

      The aircraft manufacturers are victims of their own intransigence, I believe; as wicked notes, they might have diversified following 9/11, and chose to not do so. Part of that, I firmly believe, was due to stockholder pressure. Diversification would generally sacrifice short-term profits for greater long-term profitability. Reduced dividends would not have sat well with the funds, pension plans, et al, and could well have resulted in litigation.

    • itolduso

      MonkeyHawk hasn;t a clue about aircraft manufacturing, it’s machines, or buildings and how to make them suitable for Wind Power components. Simply put, they are not.

      Aircraft are not selling. At least in the private jet industry. Deliveries are down almost 50%. In addition, several competitors new to the category, which already builds airplanes, such as Embraer, are now entering the market with lower cost products because of their lower manufacturing costs, including government subsidies, lax environemntal laws, much fewer government regulations, lower wages, and on and on.
      Currently, there are few if any profits at any of the business jet aircraft manufacturers in Wichita.

  2. wicked

    The aircraft companies had the opportunity to diversify shortly after the post-9/11 drop in sales. They chose not to.

    • itolduso

      into what? Do you have any idea what you are talking about?

      • wicked

        No, I don’t have a clue. My dad worked at Boeing for 24 years as a planner in materials, many of those years as a supervisor. I listened, I learned.

      • WSClark

        In the early Eighties, I worked for a truck parts manufacturing plant in Michigan. We developed a satellite plant in Western North Carolina. I was transfered to the plant early on. We bought a building, hired most of the original employees from the previous company, including supervisors. We made quite a success of the operation and quickly exceeded standards.

        Diversification is not difficult.

        We were a heavy manufacturing industry. The previous operation was a garment sewing plant.

        Folks aren’t born to be riveters. They can learn new skills. Why at my advanced age, I lerned to taxt messege!

  3. Could the problem be, at least in part, that today’s owners aren’t airplane manufacturers, they are investment firms? The only one I’m positive about ownership is the company I still refer to as ‘Beech,’ and it is owned by Goldman Sachs and Onex. Is the ownership of what we used to call Cessna, Leer and Boeing also investment firms or are they owned by companies who do manufacture?

    • And should that be Lear? 😉 I can’t remember, and I used that name because I’m not sure of the spelling of Bombardier. Lazy of me, I know.

    • wicked

      I’m sure Olive Ann is spinning in her grave as she watches the company she and her husband created and built, providing jobs for the people of Wichita, will soon be going south…not that it hasn’t been for quite some time, and I mean that in a couple of ways.

    • wicked

      To answer your question in one word, yes.

  4. tosmarttobegop

    I still remember one evening being in a store and reading the front page of the Eagle.
    Toward the top it said that Boeing announced the best third quarter in years.

    A short distance below that was the story of Boeing announced the lay-off of over two thousand employees.

    There are many businesses that thrive on the fact that Aircraft produces a whole body of skilled labor.
    They can pay less and still hire these skilled labor because of such lay-offs.
    But that makes it harder for people like me who also do that type of work yet do not have the skill level or experience of the aircraft employees.

    The laid-off take those jobs that are below their skill level and could be employment for a whole body of people that need the job and could not get the higher skill level jobs.

  5. Does anyone else remember the massive aircraft layoffs of (I think) the early 70s? I was a very young mother and very busy but it seems like it was as bad then as now. Anyone else know whether I am remembering accurately or I’m way off base?

    • I think the layoffs were in the early 70s as well, fnord. I’m not sure, but that sounds correct.

      Things were bad then, too, on a national level, but different; those years, IIRC, are when the seeds of the stagflation for which President Carter was blamed later in the decade (anyone else remember the WIN (Whip Inflation Now) buttons from the Gerald Ford years?) were sown.

      I also recall the recession following the bursting of the dot com bubble, and the adverse effect that had on the local aircraft industry. The answer then was the creation of artificial demand for aircraft through amending the Internal Revenue Code to allow faster depreciation of the aircraft, a move which, IMHO, made the current situation worse.

  6. In the case of “Beech”, the ownership is in the investment house sector. Textron owns Cessna, Bombardier, Lear; Boeing is still Boeing. Spirit, the Boeing “spin off”, is owned by an investment group, IIRC.

    At least Bombardier and Boeing are manufacturing companies (at present); can’t say the same for the others. Bombardier is Canadian I believe. In addition to aircraft (under its name and Lear), it does railroad rolling stock; if my memory is accurate, its products are used by AMTRAK for the Acela routes in the Northeast (closest thing to high speed rail in the U.S. at present), among other things.

    • itolduso

      Textron is now an operating company, instead of a Holding company. It consists of one primarily finanction division, and several manufacturing divisions. In fact, it is a “diversified” manufacturing company, from fuel systems of cars, to handtools, to aircrafts.

      • Looking at Textron’s web site, it looks like a holding company with several operating divisions, rather than an operating company. To me, of course.

        The divisions are “diversified”, to be sure; and, I suspect, if an appropriate offer could be made, Cessna and Bell Helicopters would be willingly sold. I suspect trying to acquire Textron Financial would be more difficult than the manufacturing subs (for that is what they appear to be in reality).

  7. Another apt analogy, Will, would be the steel mills in and around Pittsburgh.

  8. tosmarttobegop

    I saw the outcome of the oil boom going bust in that little part of OKLA.

    A town that at one time was the most populated in the area go to only thirteen hundred.
    Most a ghost of the town rather then a dying shell of once was.

    Before I got laid off, I made the suggestion to the manager that the business could expend and start building work sheds and storage shed.

    Often when there was a unit that could not be sold as a freezer or refrigerator they would be sold to the highest bidder. Most would end up in a back yard as a work shed or storage they were built to be outside for the most part. Kind of air tight, so that if someone put a small heater or A/C in it was a prefect shed for projects and/or storage.

    Because of the way they are built it would be more expensive to buy, the walls have blown insulation and
    in some case had electoral wiring put in the walls.

    But they would have a market for the likes of corporate farms and larger operations along with those private individuals would could afford them. At the time they were owned by Carrier so getting heating and or A/C would have been a snap!

    He told me later he put it up to corporate, but all they could see was that the plant was not surviving.
    So they were more in the mood to close it or sell it then to continue what they were seeing as a failing operation.

    There was a skilled work force, a product that could with little change made into a different purpose but one with a market and need.

  9. itolduso

    Textron is a weird homogeny between a holding company and an operating company, sorta.

    While the divisions are mostly separate, they share HR functions, IT functions, Supply chain to some degree, and so on

    WHen Halderman? was the CEO, it operated strictly as a holding company. PAST CEO Lewis Campbell changed that, making it in essence an operating company with different divisions, none of which can now stand independent, without rebuilding a lot of infrastructure. TO be sure, the major decisions, and in fact many of the minor ones, are now made at the corporate level. THe Divisions “Presidents” are more like Division managers than controlling their own company. Corporate headquarters not only now sets operational goals, which the division Presidents would meet, as in a classical holding compajny configuration, but get dirctly involved with most of the management decisions.
    Legally, I cannot answer I guess the way it is set up, if there is a difference