Posted on 04/17/2003 2:32:26 PM PDT by Archangelsk
April 16, 2003
Slump in Plane Travel Grounds Wichita
By PETER T. KILBORN
[W] ICHITA, Kan., April 14 ? Their income from the aircraft industry has evaporated. Their split-level home of six years, in a neighborhood sliced from farmland, has a Coldwell Banker "For Sale" sign in front. Deborah Salter has sold her jewelry. Her husband, Jim, has sold his truck, guns, tools and lawn mower.
The Salters are moving on, to what they do not know.
Stunned by how their life has unraveled, Mrs. Salter looks to her husband for some solution. "I'm trying to get answers out of him," she said. "He doesn't have any answers."
Families all over Wichita share the Salters' plight. With its four commercial and general aviation plane makers, Boeing, Cessna, Raytheon and Bombardier Aerospace, the city calls itself the Air Capital of the World. One in four of its workers, about twice the national average, works in a factory, two-thirds making planes. The aircraft workers earn an average of $55,642 a year.
But the plunge in air travel since Sept. 11, 2001 ? worsened in recent weeks by war ? has struck Wichita especially hard, coming on top of the general economic downturn and the periodic slowdowns normally experienced by the aircraft industry.
Since the attacks, about 11,000 aircraft workers in Wichita have been laid off, leaving about 37,000. In March, Cessna, the last to order mass layoffs, said it would let 1,200 workers go in May. It will shut its plants for seven weeks in June and July, furloughing 6,000 more of the 8,000 still on the payroll. The unemployment rate, 6.8 percent in January, has doubled since the late 1990's. The aircraft business in Wichita has always been turbulent, sinking deeper than the economy in recessions, as in the early 1990's, and then rebounding. This time around, too, some jobs will come back. Cessna plans a 500-employee aircraft servicing plant. But more than in the past, the companies have moved their production abroad, and are reducing production space.
"They're shrinking the footprint of several plants and selling off parts," said Bob Brewer, local manager of Boeing's engineers' union, the Society of Professional Engineering Employees in Aerospace. "We've never seen anything like that before."
In that sense, this city of 350,000, much of it still glowing from the growth and newfound wealth of the 1990's, represents the extreme of ailing local economies. Yet it provides a window into the kinds of disruptions and uncertainties afflicting many pockets of the country as the long-awaited economic recovery seems stalled and people look to President Bush for answers. Here social services and charities are starved, some stores have closed, paychecks are gone and layoffs are spreading from one sector to the next.
"Why can't the president help people who are losing their houses and jobs?" Mrs. Salter asked. "He's going to send money over there to help build Iraq back up, and we lose everything we've ever worked for. It's not our fault that we lost our jobs, what the terrorists did. It's not. Our lives were going good. I don't understand."
With sophisticated, high-technology products, the aircraft industry had insulated Wichita from the fates of Buffalo, with its steel mills, and Flint, Mich., with its shuttered automobile plants. In an article three years ago, "Where Manufacturing Thrives," Industry Week magazine ranked Wichita first among cities with fewer than one million people.
Now the distress at the aircraft plants, which include Wichita's three biggest employers, is rippling through the city, affecting not just the laid-off workers but a multitude of companies that supply and service the industry.
The lines into Wichita's restaurants have gone. The city has canceled the summer-job fair for teenagers because laid-off aircraft workers need the jobs. A hospital is laying off close to 5 percent of its staff because of declining revenue from patients. For 12 years, Cessna has trained welfare recipients for jobs there. It is suspending the program.
From July to this past January. Food Stamp cases rose 38 percent to 17,323 in Wichita's Sedgwick County, compared with a statewide rise of 28 percent. said Paul Meals, an assistant director of the county office of the state's Department of Social and Rehabilitation Services.
The laid-off aircraft workers are crowding a safety net too stretched to meet their needs, a bitter blow for people who helped others in better times. Year after year, most aircraft workers here contributed 2 percent to 10 percent of their pay to local charities. Now, their community cannot help them when they need help.
United Way's 2002 campaign was the worst since 1970, Patrick J. Hanrahan, the president, said. To cope, he has cut support to all United Way charities by 11 percent, exempting only those providing food, shelter and clothing.
Janet Pape, director of Catholic Charities in Wichita, said 23 percent more people sought the agency's help last year with food, rent, utility bills and other emergency services. "The big thing is the volume of layoff activity," she said. "It's bringing heretofore unseen clients, people who never needed to come to Catholic Charities. I've never seen an economic condition as bad as this."
Donations to Catholic Charities here plunged 14 percent after Sept. 11, Ms. Pape said. "We know we're not out of the woods," she said. "Demand is up and money is down." That means less services like the school counselor.
Catholic Charities dispatches a counselor to schools to work with children with behavioral problems. "I will be eliminating the school counseling service this month," Ms. Pape said. The agency has a program to follow up people who get jobs and move out of its homeless shelter. "We've had to cut back on that," she said.
Steve Hudson, who manages the Living Word Outreach's big food pantry, distributed 1.3 million tons of 60- to 70-pound sacks of food to 84,000 people last year, 13,000 more than in 2001. For money he depends on tithing parishioners. "Some members of our church work for Boeing, Cessna and Lear," Mr. Hudson said. "A lot of them have been laid off. If you don't have income, you don't tithe, so we've been cut." Instead of every two weeks, people get bags once a month.
Mrs. Salter is one of those calling on local charities. She needs dental work and help with her ulcer. She wants help with a place to stay when the house is sold. She and her husband might need counseling because of the strains of unemployment on their marriage. "We're having a rough go," Mr. Salter said.
Their 10-year-old daughter, Kara, may need help too. She has been acting up over fears of losing her friends, her pets and her home.
In the late 1990's, Mr. Salter, 47, and Mrs. Salter, 44, earned a combined income of more than $100,000 a year at Boeing, easily enough to pay $114,000 for their house.
Then three years ago, Mr. Salter left Boeing to start a machine-shop consulting business to work with the aircraft industry. The new business took off, he said. "Then Sept. 11," he said, "it dried up, like overnight."
Mrs. Salter started at Boeing 15 years ago, waited out a three-year layoff, and returned. She last worked in a warehouse there for $23.02 an hour. "They told us in October after the attacks there would be deep layoffs," she said. She was let go two months later.
Last week, Congress extended airline and aircraft industry workers' unemployment benefits 26 weeks as part of the $79 billion budget for the war. But Mr. Salter is ineligible, and Mrs. Salter's checks, their only income, come to $1,200 a month. Their mortgage, three months past due, is $1,500 a month.
In looking for work outside the aircraft industry, workers say they have been stigmatized. Mrs. Salter was interviewed for a $6.50-an-hour housekeeping job at a hospital and was turned down when the hospital learned she was a Boeing refugee. "They thought I'd go back there if I could," she said. For more than three times the pay the hospital was offering, she said, "I would if I could."
But she probably will not have a chance. Steve Rooney, president of the machinists union's District Lodge No. 70, which represents most aircraft workers, said his membership dropped from 26,950 in 1999 to 16,899 now.
"Now the problem we've seen in the last few years is the jobs are leaving this state and this country," Mr. Rooney said. "Those jobs won't be back." To compete for the foreign orders that represent 70 percent of its sales, Boeing says it must do more production on the foreign customers' soil.
"The game is very different now," Tim Witsman, president of the Chamber of Commerce, said. "Companies have opportunities to go so many places. We're not competing just with Oklahoma City or Phoenix. It's Mexico, Italy, Japan."
Of Wichita's aircraft industry, he said: "Do I think there'll be a recovery? Yes. Do I think we'll get to the levels of employment we saw in 1998? I doubt it."
As a laid-off employee of a company that has moved many manufacturing jobs abroad, Mrs. Salter qualifies for extended unemployment benefits and tuition for going to school to learn new skills. Like other former co-workers who have not completed high school, she takes classes at the Kansas School for Effective Learning, one of the services the United Way supports.
Her plight, she said of the class, differs only in the details from the problems faced by her classmates.
One classmate, Bob Schrimer, 49, said that he was unable to finish high school because of his dyslexia. At 16, he entered a training program at Cessna and stayed for 12 years. He worked at Boeing for 18 years, becoming a $27-an-hour supervisor in the parts department.
"I've sold a boat," he said. "I had a trailer that I sold." He and his wife, whom he met at Boeing, own two homes, one that they rent out. She still works at Boeing but her job is now in jeopardy. "She's at the bottom of the next layoff list," Mr. Schrimer said. "She will be the first to go." When that happens, he said, they will have to sell both houses.
Mr. Salter does not need more school. He went to college for four years.
With oak cabinets, a big desk, a computer and shelves for machine-design software, he has built a handsome office in his basement for Professional Aerospace Consultants, the business he started three years ago. But he completed his last, small contract in December.
He searches and searches for work by phone and the Internet. He mentions offers of machine shop jobs in China and Minnesota. Are they firm? "Not very," he said. Looking for business outside the aircraft industry, he has designed a pickup truck hitch for pulling recreational vehicles known as fifth wheels.
But he needs an investor to help him build a model. "It's going to have to happen in 30 days," he said, or else he expects that the bank will foreclose on his mortgage.
If the Salters sell their home and get their $187,000 asking price, they would clear $40,000, something to help them into another home. If the bank forecloses, the Salters could get nothing.
"We have nobody to lean on," Mrs. Salter said. "We were always helping somebody else."
I hate to be judgemental here, but if you are making in a year, nearly the price of your home, you should not be in such trouble.
If they put 25% down first, on the $114k, they would have only needed an 88k loan. Pay off $1,500 a month on that, and even with interest, they would be free and clear in under 10 years.
Then three years ago, Mr. Salter left Boeing to start a machine-shop consulting business to work with the aircraft industry. The new business took off, he said. "Then Sept. 11," he said, "it dried up, like overnight."
Sept. 11 was a year and a half ago. His new business went great for a year and a half. That's hardly a fair testing period. If he took out as much capital to start the CONSULTING business as you claim, what did he spend it on and at what point during his 18 good months did he start turning a profit?
Mrs. Salter started at Boeing 15 years ago, waited out a three-year layoff, and returned. She last worked in a warehouse there for $23.02 an hour. "They told us in October after the attacks there would be deep layoffs," she said. She was let go two months later.
It doesn't say at what point during the 15 years she waited out a layoff. I doubt it was during her husband's business upstart. But, $23,02 an hour for 12 years (less in the beginning -- but cost of living was less too) should have covered the layoff time.
These people did not handle their money well. Period. I still feel sorry for them, but I'm not crying crocodille tears. I also am not willing to squeeze my budget or sell my house to accomodate a bunch of similar spendthrifts.
I guess I'd have to withhold judgment until I saw where these lost funds went. It could have gone into stock in Enrons or other companies which, unbeknownst to most, were almost purely hot air.
And it seems to me that you are deficient in your reading and comprehension skills.
We are massively overtaxed compared to the days of Ronaldus Magnus. We are on the wrong end of the Laffer Curve.
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