OK AEROSPACE INDUSTRY
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January 26, 2012
OKC leaders: Joy over Boeing’s plan to move jobs tempered by past lessons
By Brian Brus, Oklahoma City reporter
The Journal Record
1/24/2012
OKLAHOMA CITY – Oklahoma City’s economic development leadership is basking in the promise of more than 800 engineering and program support jobs from the Boeing Co., but they’re also keenly aware of the painful lesson Wichita, Kan., recently learned.
“We were not so lucky with General Motors and Lucent Technologies,” said Roy Williams, president and CEO of the Greater Oklahoma City Chamber. “Sometimes you have zero control over what happens to companies in your community.
“But having said that, you do everything you can to establish a relationship and establish a rapport so that if there are issues looming out there, they have the trust and confidence to bring you in and talk about it,” he said.
Boeing officials this month announced that in order to stay competitive, the company would relocate hundreds of jobs from Wichita to Oklahoma City by the end of 2013. Those programs include the B-52, the massive jet-powered bomber designed for the U.S. Air Force. By the end of the transition, the city’s Boeing operations will number about 2,000 employees.
Oklahoma City’s benefit is Wichita’s loss, however, as the company announced the closure of its Defense, Space and Security facility. Less than a year ago, Boeing executives said that if the company won a multibillion-dollar tanker refueling contract, Wichita would benefit from at least 1,500 new jobs. Over the years, that city’s leadership has helped the company with an estimated $4 billion in incentives such as tax breaks and municipal bonds. The company has been in Wichita for about 80 years and has been one of its largest employers.
So Wichita thought it had a relationship and rapport with Boeing, too, just as Williams said Oklahoma City has been developing. It may not be enough.
“We had a good relationship with General Motors; we met often with the GM president,” Williams said. “We thought we had a good relationship with Lucent Technologies as well. But sometimes corporate decision-making isn’t based on relationships. It’s based on economics; it’s based on management philosophy. … You do the best you can and you never take a relationship for granted.”
Oklahoma City Mayor Mick Cornett agreed that it’s impossible to predict or control the direction a company will turn, even with the best communication. He also echoed another of Williams’ points.
“All of our incentives here are performance-based. So they would be free to leave at any time, but their incentives would stop the moment they left,” Cornett said.
Cornett said the metro area has leverage that Wichita doesn’t in that the federal government has continued to show support for Tinker Air Force Base, which has allowed the local aeronautics industry to grow to a healthy size. Cornett said it would behoove the city to maintain a business-friendly culture at all levels of government.
The city has a program similar to the state’s Quality Jobs incentive that pays off on a percentage of a company’s payroll once a preset number of jobs are created at an agreed income level. Williams said earlier that Boeing hasn’t announced yet how much the Oklahoma City jobs will pay.
“Here, they don’t get the incentive until after they have produced,” Williams said. “We don’t front them resources and money and infrastructure, so we have much more of a relationship with them rather than an adversarial position if there’s a change in the business climate.”
And the chamber has beefed up its business retention and expansion program, with two full-time positions dedicated to call on the region’s top 250 to 300 employers to ensure they have access to resources and information, Williams said.
But even then, sometimes local management teams have no idea what their corporate headquarters have in mind, he said.
“Do I acknowledge that things can be cyclical?” Cornett said. “Yeah, Oklahoma City’s riding high today. But we haven’t always been that way, and we probably won’t always be that way. … Our economy will one day be at the other end, and companies like Boeing will have to make new decisions.”
