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Aero-dynamics: Winnipeg's modest industry navigates uncertain skies

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At the beginning of the year, out of the blue Boeing Co. announced it would be shutting down its 85-year-old defence production plant in Wichita, Kan.

It means that by the end of next year, Wichita -- a city about half the size of Winnipeg -- will lose 2,200 jobs.

The move came just months after local and state officials succeeded -- after years of lobbying -- in helping the company win a $35-billion contract to build air force tankers that were to be finished at the Wichita plant.

Without any consultation with city or state officials, the company claimed the Wichita operation was no longer economical.

It's a bitter pill for a city that billed itself as the Air Capital of the World.

And it's a sobering scenario for a city such as Winnipeg that prides itself on having a busy, diversified aerospace industry.

Irrespective of the industry dynamics that have taken a swipe at Wichita's economy -- commercial aerospace companies building Cessnas and Learjets have also dramatically cut their staff there -- it shows a community cannot take that stuff for granted.

And Winnipeg's fairly modest-sized sector -- about 5,300 jobs -- is under the gun.

The mammoth Aveos Fleet Performance hangars on Saskatchewan Avenue are quiet these days. The shops that once employed more than 700 people in a business that was believed to have enough barriers to entry it would ward off most competition is in liquidation.

The shutdown last month threw about 400 Winnipeggers out of work.

Around the other side of the airport at Bristol Aerospace, executives and workers alike must be reeling with each volley from the opposition benches in Ottawa calling for a rethinking of Canada's decision to buy F-35 fighter jets, whose final costs seem to escalate every month.

That's because Bristol and its parent company, Magellan Aerospace, are committed to investing about $120 million in tooling up to build parts for the F-35.

It's already been at it for 10 years and all things being equal, Bristol hopes to be building F-35 parts for another couple of decades. That result will be far more likely if Canada eventually buys the planes.

Don Boitson, the company's senior executive in Winnipeg said on Wednesday, "It's business as usual. We are falling in lockstep with our partners (including the federal government). We have been involved in this for 10 years. We see it going through a different phase right now, but we're not going to get ahead of where our partners are. We are going to trust the process to go through and get to the right conclusions."

Boitson and Bristol do this kind of balancing act all of the time -- trying to find the right balance between commercial and defence work and investing in technology to position them for the future, even if there are no guarantees it will be able to leverage that technology into lucrative contracts.

The fact Bristol has negotiated more than $60 million in loans from the federal and provincial governments to help with the technology ramp-up for the F-35 work apparently does not buy certainty.

On the other side of that risk-reward equation is the expectation of about $1 billion worth of work.

Boitson said the day-to-day ups and downs are not as important as the long-term outlook.

"We've been in business for more than 80 years," he said.

"We have to take away the short-term, day-to-day bits and see if we are positioned for the long run. On this one (the F-35 work) we made a decision for the long run and we are sticking to it."

It's under these conditions that Ken Webb is about to take over as executive director of the Manitoba Aerospace Association.

The Red River College senior official -- he's been vice-president, academic and research for the past 20 years -- will assume his new position in a couple of weeks.

He declined to comment on the industry's challenges just yet. But he said since the aerospace sector has been one of the college's major partners and clients for many years, he's familiar with its dynamics as well.

Even without weighing in directly, his perspective is worthwhile in the midst of the hand-wringing that's going on.

"This is an industry with a lot of opportunities and lots of investment taking place with good things to be done," Webb said.

Despite setbacks and political vicissitudes, aerospace will continue to be big business worthy of leveraging whatever infrastructure the community already has in place.

Republished from the Winnipeg Free Press print edition April 5, 2012 B4

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About Martin Cash

Martin Cash joined the Free Press in 1987 as the paper’s business columnist.

He has spent two decades chronicling the city’s business affairs.

Martin won a citation of merit from the National Newspaper Awards in 2001 for his coverage of the strike and subsequent multi-million-dollar union settlement at the Versatile tractor plant. He has also received honours and awards for his work on agriculture and technology development in Manitoba.

Martin has written a coffee-table book about the commercial and industrial make-up of the city, called Winnipeg: A Prairie Portrait.

Martin Cash on Twitter: @martycash


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