=20 ---------------------------------------------------------------------- This article was sent to you by someone who found it on SF Gate. The original article can be found on SFGate.com here: http://www.sfgate.com/cgi-bin/article.cgi?file=3D/news/archive/2003/02/09/f= inancial1455EST0010.DTL ---------------------------------------------------------------------- Sunday, February 9, 2003 (AP) Airline woes hit Wichita, home to aircraft companies, especially hard ROXANA HEGEMAN, Associated Press Writer (02-09) 11:55 PST WICHITA, Kan. (AP) -- When the aircraft industry slowed in the aftermath of the Sept. 11 attacks, mechanic Robert Burgar lost his job at Apex Engineering, an aircraft parts manufacturer. For a time, the local food bank kept Burgar and his family fed. Multiply Burgar/ by 14,000, and you begin to understand what's going on = in this Midwestern city that calls itself the "Air Capital of the World." In Wichita, aircraft construction is king, and the king is ailing. Wichita has four major airplane manufacturing plants -- owned by Boeing, Cessna Aircraft, Raytheon Aircraft and Bombardier Aerospace -- and more than 60 aviation subcontractors. Boeing's biggest competitor, Airbus of France, has a wing design facility here. In the past 18 months, about 14,200 Wichita aircraft workers have been laid off. An additional 1,500 job cuts are expected at Cessna this year. "We are ground zero for economic devastation here," said Carolyn Bunch, executive director for KANSEL, a nonprofit agency that provides education and training programs for the unemployed. The Wichita metropolitan area has a population of 544,000 people, according to 1998 statistics. Burgar is better off than many of Wichita's unemployed. After seven mont= hs of looking, he landed a job in June as a city maintenance worker, making $4 an hour less than his old aviation job. The aviation industry was devastated by fallout from the terror attacks and the sluggish economy. The airlines that buy Boeing's jets canceled orders or put off purchases, forcing the manufacturer to reschedule deliveries of more than 500 jets and halve production rates. At the same time, makers of business jets and private aircraft in Wichita also lost customers as corporations responded to the slowing economy with cutbacks. Cessna Aircraft last week lowered to 220 the number of its signature Citation business jets expected to be delivered this year, compared to the 307 Cessna built in 2002. The company is also using an auto industry sales tactic, zero percent financing, on its turbo-prop Caravans purchased for delivery in the first half of 2003. Raytheon Aircraft last week announced another 600 layoffs in Kansas this year, and also lowered its forecast of plane deliveries in 2003 to 321, down from 356 a year earlier. Aviation's problems have spread to the rest of the city's economy. Retail sales are sluggish. Construction activity has slowed. Home sales, buoyed by low mortgage rates, were up 2 percent last year but have since stalled, and local economists say home sales won't provide a stimulus for the economy in 2003. The Center for Economic Development and Business Research at Wichita Sta= te University has forecast that local employment will remain stagnant this year. Manufacturing accounts for 24 percent of all jobs in the Wichita area, figures show. And aviation makes up 69 percent of the manufacturing payroll. These are good paying jobs, averaging $52,603 annually, according to government figures. "All of a sudden the gravy train stops -- and it is harder for someone making $60,000 a year to go on unemployment than someone making $20,000," said Frank Chapell, director of the Kansas Aviation Museum in Wichita. "It is the difference between making payments on a $350-a-month mortgage versus a $1,250-a-month mortgage. That is what makes it tough." Laid-off aircraft workers are now asking for help from the same charities they once supported. Half of the money raised by United Way's campaign fund-raising in Wichita traditionally comes from the four aircraft manufacturers and their employees. Last month, United Way cut $1.19 million of funding to most of its 34 agencies. "It is tough, very tough," said Patrick J. Hanrahan, president of United Way of the Plains. Meanwhile, charities are swamped. Calls to United Way's information line from people looking for help with rent or mortgage payments and utility bills are up 40 percent from a year ago, Hanrahan said. Demand at the Kansas Food Bank Warehouse in Wichita is up 30 percent this year. Chapell remembers how devastating it was after World War II, when thousands lost their jobs after wartime plane production ended. He recalls the brutal 1970s, when the joke here was a billboard asking the last worker leaving town to turn off the lights. He predicted the industry would come back even stronger this time as well. "This is not good, and it is not good because everybody is so used to riding this big burp of aircraft manufacturing," Chapell said. "Is it a death blow? Not by a long run." Chapell said sales will be helped a growth in fractional ownership of business jets, a concept similar to real estate time shares. And airlines eventually will have to replace aging aircraft. "There is not an airplane made in the United States, or maybe even the free world, that does not have at least one part manufactured in Wichita," he said. On The Net: www.boeing.com www.cessna.com www.raytheon.com www.bombardier.com www.airbus.com www.unitedwayplains.org Wichita State University: www.wichita.edu =20 ---------------------------------------------------------------------- Copyright 2003 AP