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Boeing to close large plant in Wichita

John Dimsdale Jan 5, 2012

Stacey Vanek Smith:Later today, President Obama and Defense Secretary Leon Panetta will lay out a plan to cut Pentagon spending by $400 billion over the next 12 years. The cuts are required by congressional deficit reduction plans and that’s already hitting some places — like Kansas — especially hard.

John Dimsdale has more.

John Dimsdale: Boeing will close a military aircraft factory in Wichita, laying off 2,000 workers over two years. Other Boeing facilities will pick up Wichita’s production.

Todd Harrison: I think this is just one of the first examples of industry proactively moving to reduce excess capacity.

 Todd Harrison is a defense budget analyst with the Center for Strategic and Budgetary Assessments.

Todd Harrison: Because they know the money is not going to be as free-flowing in the future as it was over the past decade.

He says other cities should brace for similar defense factory closings, especially those that make armored ground vehicles, rocket motors and ships. The Teal Group’s Richard Aboulafia expects today’s budget cuts will also mean fewer military jobs.

Richard Aboulafia: The one obvious area to make cuts is personnel.  Anything to cut ground troops because if there’s a universal political consensus on anything, it is that there’s no stomach to fight a large ground war right now. 

 In Washington, I’m John Dimsdale for Marketplace.

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