Will Cessna Leave Kansas Too?

[Made in the USA]

Should that State give Cessna the money, or let that industry go out the back door also??



Cessna wants $25 million to build here
A WSU study says that each dollar invested in the Cessna project, which would add 1,010 jobs, would generate $2.14 to the state in return.
BY MOLLY MCMILLIN AND DAN VOORHIS
The Wichita Eagle


Cessna Aircraft wants $25 million in cash from the state to build an assembly plant in Wichita for its new Citation Columbus business jet, a move that company officials said would add about 1,000 jobs to the area's economy.

The cash is on top of a package of incentives offered to Cessna by Wichita, Sedgwick County and the state, local officials said Monday in unveiling the plan.

The state House and Senate are expected to debate bills this week that would provide the $25 million, which would be paid out over two to four years.

"We've got to take this very, very seriously," said Sen. Jean Schodorf, R-Wichita. "How Cessna goes could be how the other aviation companies go."

The timetable for the Legislature to act is tight. Cessna officials said they need to make a decision on a location in the next four to six weeks.

If it doesn't happen here, the company said it has offers from other states to build there. Cessna officials recently visited Georgia.

"We have all the bias of wanting to stay in Kansas," Jim Walters, Cessna's senior vice president for human resources, said Monday.

But he said Cessna must make a decision that is best for Textron, its parent company, and its shareholders.

Last Friday, officials from Cessna, Wichita, Sedgwick County, the Greater Wichita Economic Development Coalition and the Wichita Metro Chamber of Commerce met with Gov. Kathleen Sebelius, Secretary of Commerce Dave Kerr and House and Senate leadership.

Those state officials understand the importance of Cessna to the future of Wichita, said Chamber president Bryan Derreberry.

Since that meeting, local officials also have briefed legislators from south-central Kansas.

Cessna's project "is an extraordinary opportunity and calls for an extraordinary effort," said Wichita interim City Manager Ed Flentje.

Cessna's plant

The plant would accommodate building Cessna's new $27 million Citation Columbus, its largest business jet to date. Cessna is investing $800 million to develop the Columbus.

The plant would add 1,010 jobs at an annual payroll of $74 million. Cessna, the state's second-largest private employer, behind Sprint, has more than 14,000 employees.

The new factory and jobs have caught the attention of other states, which are aggressively courting the site. Schodorf said she was told that North Carolina had offered Cessna $200 million to build there.

Even if Cessna receives the extra cash from Kansas, the incentive package here is still less than offers from other states, Walters said.

But he said Wichita has the advantage of a skilled work force, the National Institute for Aviation Research and a new technical training school at Jabara Airport. Plus, Cessna's engineering and assembly expertise is also here.

Action in Topeka

Cessna's request is spurring the local delegation to action. The Legislature is set to close at the end of this week.

"Things are moving pretty fast," said Schodorf, the Wichita senator.

The House may vote on a bill that would change the way incentive money can be raised from bonds to cash, available for the Secretary of Commerce to spend as needed.

That pot of money is big enough to cover a $25 million contribution, said Commerce Department spokesman Joe Monaco.

The Senate was to debate a bill today that would create a bond program for incentives, similar to the $500 million bond the Legislature approved for Boeing's Wichita facility in 2003.

"We have to take care of the industry that provides us with a return on investment," said state Sen. Carolyn McGinn, R-Sedgwick.

For every dollar of investment in the Cessna project, the state would receive $2.14 in return, according to a study by Wichita State University's Center for Economic Development and Business Research that was commissioned by the GWEDC.

That means the state's $25 million investment would return $53.5 million in taxes, the study said.

A few legislators said some of their colleagues may complain about Wichita getting such a large chunk of money so late in the session.

"But at the end of the day, they realize that these are jobs that benefit not just Wichita, but the whole state," said Rep. Jim Ward, D-Wichita.

Competing for jobs

Other states want Wichita's aviation jobs, and Kansas doesn't have a big chest of money for economic development incentives, like other states do.

To attract jobs, some states will put up a building, pay for the infrastructure and train the work force, Derreberry said.

"There's no running up and down the road to the state capital," Derreberry said. "It happens."

Cessna, in developing the Columbus and a need for the plant, realized that the competitive landscape had changed, Walters said. Kansas is not yet competitive, he added.

Approval of the money would send a signal to the aviation industry about the state's commitment -- or lack of it -- to the industry's future in the state, local officials say.

All of Wichita's planemakers have enormous backlogs and will have to make similar decisions about growth, said Al Higdon, interim president of the GWEDC.

Sedgwick County Manager Bill Buchanan said the deal is important.

"It's one we just cannot blow," Buchanan said.

"We want the Legislature to do whatever they need to do to make Cessna happy."