SF Gate: Airline woes hit Wichita, home to aircraft companies, especially hard

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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

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Copyright 2003 AP

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