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Saturday, Feb. 13, 1999

Kelly Air Force Base to lose some workload to Oklahoma

San Antonio officials hail Lockheed Martin contract as victory because 1,200 to 1,500 jobs will remain

By KELLEY SHANNON
Associated Press

   SAN ANTONIO - The Pentagon announced Friday that $10 billion in aircraft engine repair work at Kelly Air Force Base will be awarded to aerospace giant Lockheed Martin and a military base in Oklahoma.
   About half the work, or approximately 1,200 to 1,500 jobs, will remain at Kelly as Lockheed Martin establishes operations at base facilities that are being privatized.
   Once the city's largest employer, Kelly is closing by 2001.
   The Greater Kelly Development Corp., the city-sanctioned group overseeing privatization of the base, reacted with enthusiasm after the Pentagon's announcement even though some local jobs will be lost.
   "A lot of people forget that this is a closing military base, and we could just lose everything," development corporation spokeswoman Teresa Nino said. "We're excited that we're able to retain some of the jobs here in San Antonio."
   Pratt & Whitney, the other bidder, had indicated it would keep all the engine work at Kelly but reduce from 3,000 to 2,000 the number of employees doing the jobs.
   Under the contract awarded to the public-private team, work on T-56 and TF-39 engines - amounting to $5 billion over a 15-year period - will remain at Kelly and be overseen by Lockheed Martin.
   Work on the F-100 engine, accounting for another $5 billion over 15 years, will be done at the air logistics center at Tinker Air Force Base in Oklahoma City.
   "I'm happy to say that San Antonio achieved a long-overdue win today," said Sen. Phil Gramm, R-Texas. "Although one outcome was better than another, this was finally a fight where the outcome wasn't everything or nothing."
   Sen. Kay Bailey Hutchison, also a Texas Republican, said the Pentagon decision is "a victory for San Antonio and the beginning of a new era at Kelly."
   The Base Realignment and Closure Commission voted in 1995 to shut down Kelly, and 1999 was expected to be a year of significant workforce reductions.
   "This is a great way to start the new year," Nino said.
   Local redevelopment officials say they're pleased with the progress toward privatization at Kelly, noting that the Boeing Co. continues to expand its new aerospace maintenance center at the base.
   By the end of 1998, Boeing employed 800 workers at Kelly. That number is expected to grow to 1,200 by the middle of this year.
   Development corporation chairman Navarra Williams said the addition of Lockheed Martin will help attract more private industry.
   "With both Boeing and Lockheed Martin as flagship tenants at Kelly, there is outstanding opportunity for San Antonio to attract other aerospace and logistics businesses to Kelly," Williams said.
   

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