Boeing Co. (NYSE: BA) said it will close down its historic plant in Wichita, Kan., by the end of next year, citing spending cuts by the U.S. military.
More than 2,160 workers at the facility will be eased out of their jobs beginning in the third quarter of 2012, the company said.
The plant manufactured a wide assortment of aircraft and parts since 1929. At its peak, during World War II, the facility employed 40,000 workers and remained Wichita’s largest employed for years after the war.
“Over the past five years, contracts in Wichita have matured, programs have come to a close or are winding down, and the site does not have enough sustainable business on the horizon to create an affordable cost structure to maintain and win new business,” Boeing stated.
Some of the work being done in the Wichita site will be moved to plants in Washington state, Texas and Oklahoma.
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.
Bass also told reporters that as a result of the Wichita closure, 800 jobs will be added in Oklahoma City, 300 to 400 jobs added in San Antonio and 100 in Seattle, through both transfers and new hires.
Howard Rubel, an analyst with Jefferies & Co. in New York, said the move will be “a historic moment, but reflects the economic reality of a changing and shrinking defense budget,” according to Bloomberg.
Kansas lawmakers were outrage by Boeing’s decision.
U.S. Sen. Jerry Moran said: Boeing's announcement is that things have changed. Well, the only thing that really has changed in my mind in the last year is Boeing now has the contract. When they made the commitments, they didn't.
Similarly, U.S. Sen. Pat Roberts, lamented: Today's announcement by Boeing's leadership is hugely disappointing to me, but more importantly to the thousands of workers whose livelihoods are affected by this decision.
Boeing shares fell in after-hours trading 24 cents to $74.09.