American's Tulsa layoffs to have ripple effect

Journal Record, The (Oklahoma City), Oct 3, 2001

TULSA (AP) -- The layoffs of 750 American Airlines employees in Tulsa could have a ripple effect that would lead to the loss of an additional 1,065 local support positions, an analyst says.

The overall projected loss of income from all of the cutbacks would total $46 million, with a $465,000 annual loss in sales tax revenue, said Mike Davidsson, manager of economic research for the Tulsa Metro Chamber.

Also, more aerospace industry cuts are expected as the airline industry staggers following the Sept. 11 terrorist attacks in New York and Washington.

Boeing, which employs 1,500 people in Tulsa, plans to cut 30,000 jobs companywide, but has not specified how many people will be laid off locally.

The Tulsa area has about 320 aerospace companies, employing 32,000 people and providing a $992 million annual payroll.

Davidsson said the area should prove resilient, despite the layoffs.

"It's bad news for Tulsa, but I think the economy can take it," he said.

Tulsa County's economy has been strong this year, with an unemployment rate of 2.8 percent in August compared with a nationwide rate of 4.9 percent. The number of jobs in Tulsa grew at two times the national average during the first eight months of this year, Davidsson said.

This year alone, 5,500 jobs have been added to Tulsa's economy.

"That shows that we are growing and the economy is cranking out a lot of jobs," he said.

"In the short run, you're going to see less retail sales, less restaurant sales, less spending on services and so forth, but I really think that will be temporary."

In Tulsa, American is laying off 400 mechanics and 350 management and support staff members.

The layoffs, the first of an estimated 100,000 job cuts announced in the U.S. airline industry, are about a sixth of the 20,000 people American says it must cut to remain in business.

Robert Dauffenbach, director of the Center for Economic and Management Research at the University of Oklahoma's Price College of Business, said the impact of the cuts will be felt across the state.

"We're going to have to stay abreast of this," he said. "It's going to be very devastating; these are very high-paying jobs, and we estimate overall that there are 143,000 jobs statewide connected to aviation."