Boeing Plant Purchase "Too Big"

Just earlier this week, everything seemed so warm and friendly between Boeing and British-based GKN PLC, a company that makes aerospace and automotive parts. Boeing reportedly wants to sell its manufacturing plants in Kansas and Oklahoma. GKN, which has already purchased the Boeing commercial aircraft plant in Hazelwood (MO), confirmed it was interested.

Then came Thursday. That's when the Reuters news agency reported GKN had suddenly lost interest and "walked away" from the deal.

Citing an unnamed source close to the deal, Reuters reported Boeing presented GKN with an "all-or-nothing" deal -- either the British company purchase three plants in Wichita, Tulsa and McAlester or there would be no deal. At that point, the wire service reported, GKN decided the Wichita plant was just too big to buy and ended negotiations.

Neither Boeing nor GKN would confirm those reports. On Wednesday, ANN reported Boeing would brief its workers on plans for the three plants sometime this week. Thursday, there was no briefing, but there was an email:

Sent: Thursday, May 20, 2004 1:00 PM

TO: All Wichita, Tulsa and McAlester Employees

The study of options for the future of BCA operations in Wichita, Tulsa, and McAlester continues. Several organizations have indicated interest in the sites. No decisions have been made. Our next step is to exchange information with a selected group of them and conduct tours. You may see some of these visitors on site over the next several weeks. We have prepared office space for them to use while they are on campus.

There is no set timetable for completing this part of our study, but we do expect it to be a slow process. Following the preparation and refinement of the assessments by the selected parties, the company will carefully evaluate all proposals. At that point, we will determine whether to enter into further discussions or to terminate the process. If the decision is to continue discussions, we would expect rather lengthy negotiations toward a mutually acceptable transaction with one of the interested parties.

We will communicate what we can to employees and other stake holders throughout the process. The amount of information we will be able to give you will depend on any privacy agreements we might have with interested parties. Experience tells us that many important issues won't be resolved for quite a while, and that guesses today about what will happen in the future are as likely to prove wrong as they are right. Remember, this is far from a "done deal" at this time. No firm decision can be made or will be made until all the facts are in. We are following a very methodical approach to ensure we get all the facts we need to make a wise decision. Thank you for your patience!

FMI: www.boeing.com