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Stonecipher: Wichita will always be important to us

By Dominic Gates
Seattle Times aerospace reporter

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That was the double-edged response from Boeing Chief Executive Harry Stonecipher in a conference call yesterday when asked about the possibility of selling the facility that employs 12,400 people.

"There's been no decision made to do anything with Wichita other than what it is doing. Are there studies going on? You bet," Stonecipher said.

"Wichita, though, whether there's a Boeing sign on the side of the building or another sign on the side of the building, is very important to the future of the Boeing company," he said.

A Seattle Times story Sunday, citing an internal Boeing document, said the aerospace company was considering a sale of the plant. The story described a long-term strategic plan for Boeing's commercial-airplane division to shift fabrication work and subassembly to suppliers.

The plan also envisaged selling smaller Boeing plants in Tulsa, Okla., and Melbourne, Ark. All would continue their current work after the sale, but as suppliers to Boeing instead of internal units.

No time frame was given, and no prospective buyers were named.

The news stirred an emotional reaction in Wichita. A routine visit by Stonecipher on Tuesday turned into a third-degree inquisition by Boeing employees and the media.

That day, Stonecipher called Kansas Gov. Kathleen Sebelius and had a conference call with two congressmen and both U.S. senators from Kansas, giving them a briefing on the future of Wichita in light of The Times' report.

Stonecipher spoke publicly on the subject for the first time yesterday during the conference call with analysts and reporters to discuss Boeing's latest earnings report.

The most unambiguous message was that nothing is imminent; no prospective buyers are in negotiations.

"We don't have any changed plan for Wichita right now," Stonecipher said. "I have had absolutely zero conversations with anybody about buying Wichita and, to my knowledge, no one else has."

However, he noted that ever since Boeing's huge acquisitions in the 1990s, the company has been re-evaluating its assets and seeking to reduce its footprint.

"In 1998, when Alan (Mulally, CEO of Boeing Commercial Airplanes) took over the commercial business, he had a team that started looking at how could the commercial business be more competitive," Stonecipher said. "That has involved: What are we going to build ourselves? Where are we going to build it? Can someone else do that for us? Those studies have been ongoing and continue."

At one point, in asserting any sale would categorically not include Boeing Wichita's military operations, Stonecipher seemed to allude to a study of Wichita's commercial operations. But he downplayed its significance.

"We study these things for every location that we have," Stonecipher said. "Don't be threatened by it. We're just doing the responsible thing by trying to make ourselves more competitive."

Stonecipher also offered an assurance that, should the time come, Boeing will give due notice of any sale.

"When that happens, we will engage with the employees, the unions, the communities, the Congress and state politicians," he said. "They will all be part of this decision, whatever it is."

Chris Mecray, an industry analyst with Deutsche Bank who participated in yesterday's earnings call, was left with little doubt that selling the Wichita plant is a long-term strategic aim for Boeing.

"There's nothing surprising about that and nothing in (Boeing's) statements that would contradict that," said Mecray.

"I guess they didn't deny or confirm, but the lack of denial speaks volumes."

One potential buyer emerged yesterday when the head of GKN Aerospace North America-East in St. Louis expressed interest if Boeing Wichita is offered for sale. GKN in 2001 bought the fabrication division of Boeing's military jet plant in St. Louis.

"If something comes up, we'd like to believe we'd be made aware," James Fitzsimmons, the GKN unit's president and CEO told the St. Louis Post-Dispatch.

U.S. Rep. Todd Tiahrt, a Republican whose district includes Wichita, was one of the congressmen Stonecipher called Tuesday.

"There were some things that were comforting and some things that were of concern," Tiahrt said.

The comfort came from what Stonecipher reiterated yesterday: assurances that nothing is imminent and that the military side of Boeing is not for sale. The concern was Stonecipher could not similarly rule out a sale of the commercial operations.

"He could not say that wouldn't happen in the future," said Tiahrt. "This is a potential conclusion that could occur; I see this as a real possibility."

Tiahrt said he will maintain close ties with Boeing management and monitor the situation. He said he views The Times' story as a wake-up call for himself and for Wichita.

"It certainly has gotten the dust out of the rafters," Tiahrt said.

Stonecipher had a different take on The Times' story. He complained that some who had read the article out of context concluded the plant would be closed.

"I can't tell you how destructive your (The Times') article was," Stonecipher said during the conference call.

Then he alluded to his much-changed visit to Wichita on Tuesday.

"You destroyed my whole day," he said.

Dominic Gates: 206-464-2963 or dgates@seattletimes.com

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