Shifting economic winds cause Wichita air firms to alter course
Saturday, September 14, 1985
The Kansas City Times
By Rod Perlmutter, Financial Writer
WICHITA — When Tom Pierce talks about the 1970s, his voice has a storybook tone to it.
Once upon a time, the biggest problem facing the Machinists union members working at Wichita’s aircraft manufacturing plants was not finding a job, but finding a place to live, said Mr. Pierce, secretary-treasurer of District 70 of the Machinists union.
Once upon a time, the Wichita Area Chamber of Commerce advertised throughout the Midwest to bring skilled Machinists to Wichita to build aircraft.
“That doesn’t seem real to me now,” Mr. Pierce said sadly. “It seems like a hundred years ago now, the way people are suffering, but that was Wichita.”
Today, Wichita suffers from a three-year aircraft recession that cut the dues-paying working membership of the union from about 20,000 in 1980 to about 8,800 in August — as well as slashing the number of aircraft jobs in half nationwide from about five years ago.
The recession also grounded many 1970s assumptions about Wichita’s aircraft industry, still the city’s largest employer. As a result, the industry has recently faced dramatic changes:
* Cessna Aircraft Co., long known as the “General Motors of the aircraft industry” and the last independent aviation company in Wichita, announced a purchase agreement Friday whereby the General Dynamics Corp. of St. Louis will acquire Cessna. The-merger came after months of rumors, fueled by Cessna’s losses over the last two years and the company’s need for capital.
• Gates Learjet Corp., which created a new era in corporate transportation when it built its first business jet in Wichita in 1963, finished its last Wichita-built jet earlier this month. Instead of building jets in Wichita, it will now only assemble parts for aircraft to be completed in Tucson, Ariz.
• Beech Aircraft Corp.; though claiming dominance in turboprop aircraft, finds itself overlooking a diminished and more competitive market.
• Boeing Military Airplane Co., filled with dozens of military orders, has grown to replace Cessna as the largest aircraft employer in the state.
And the growth of Boeing symbolizes a disquieting reality in the industry — the most secure job for an aircraft machinist in Wichita today is with a corporation with a strong military presence.
Despite the military contracts, the commercial aircraft industry remains in a slump that has lasted three years. The downturn, however, has also created opportunities.
For example, it has forced companies that did most of their business with the aircraft industry to broaden into other areas, said Larry Danielson, vice president of economic development for the Wichita Area Chamber of Commerce.
As a result, the work force has shifted. The number of service employees rose from 37,000 in 1979 to 42,000 in 1985, and the number of wholesale and retail employees rose from 46,000 to 50,000.
The result has been most dramatically reflected in Wichita’s unemployment rate, which peaked in 1983 at 10.9 percent and is now down to 5.1 percent. The corporate attitude, Mr. Danielson said, is: “Instead of sitting around licking our wounds, let’s not wait for the aircraft industry to come back.”
(This is an excerpt from a 3,000-word article in September 14, 1985 issue of The Kansas City Times.)