On Wednesday January 10, 2001, TWA announced that it has filed for Chapter 11 bankruptcy protection, and reached an agreement with American Airlines in which American will acquire almost all of TWA's assets. Using RAP's Local-Regional-State (LRS) Economic Modeling System, three scenarios were run assessing the potential impact of closing TWA facilities in Missouri.
The total loss impact scenario assumes the closure of all TWA facilities in Missouri, resulting in the loss of all TWA jobs in the state - a loss of 12,430 jobs and $604.4 million wages. It appears that the loss of all 12,430 TWA jobs in Missouri would result in a total loss of 32,810 jobs and $876 million wages in 2000. By 2010, the state economy regains 10,000 jobs, for a total loss of 22,960 jobs and $744.5 million in wages. As expected, the St. Louis and Kansas City metro regions would experience the largest negative impacts.
As expected, the Transportation, Communications and Public Utilities sector would be most adversely affected by the loss of all TWA employment in Missouri - losing 14,710 jobs and $620.8 million wages in 2000, with only small recovery in 2010. Interestingly, the Manufacturing sector experiences a loss of 1,072 jobs in 2000. However, by 2004 the manufacturing sector recovers all of these previously lost jobs; and by 2010 there is an additional 371 manufacturing jobs in the state's economy. Also, wages in durable manufacturing recover by 2006; and by 2010 there is an additional $4.9 million in wages. Further, the Government sector experiences a small loss of employment in 2000, losing 325 jobs. However, by 2010 this expands to a loss of 1,427 jobs.
The overhaul base loss impact scenario assumes the closure of TWA's overhaul base facilities in Kansas City (MO), resulting in a loss of 2,661 jobs and $132.4 million wages in the state. It appears that the loss of 2,661 TWA overhaul base jobs in Kansas City would result in a total loss of 6,862 jobs and $171.5 million wages statewide in 2000. By 2010, the state economy regains some of these jobs, for a total loss of 5,282 jobs and $167.1 million in wages. As expected, the Kansas City region would experience the largest negative impacts.
As expected, the Transportation, Communications and Public Utilities sector would be most adversely affected by the loss of TWA's overhaul base in Kansas City - losing 3,173 jobs and $135 million wages in 2000, with almost no recovery by 2010. Interestingly, the Government sector experiences only a small loss of employment in 2000, losing 75 jobs. However, by 2010 the Government sector is expected to lose over 362 jobs - indicating that this sector does not recover over time. Also, wages in durable manufacturing increase over the baseline by 2010.
The administrative and corporate loss impact scenario assumes the closure of TWA's administrative and corporate facilities in Kansas City (loss of 985 jobs and $41 million wages) and St. Louis (loss of 962 jobs and $36 million wages), which would result in the loss of 1,947 jobs and $77.1 million wages in the state. It appears that the loss of all 1,947 TWA administrative jobs in Kansas City and St. Louis would result in the loss of 5,223 jobs and $104.5 million in wages statewide in 2000. By 2010, the state economy regains some of these jobs, for a total loss of 3,865 jobs and $96.7 million in wages. As expected, the Kansas City and St. Louis regions would experience the largest negative impacts.
As expected, the Transportation, Communications and Public Utilities sector would be most adversely affected by the loss of TWA's administrative and corporate offices - losing 2,318 jobs and $78.7 million wages in 2000 with almost no recovery in 2010. Interestingly, the Manufacturing sector experiences a loss of 185 jobs and $3.1 million wages in 2000. Yet, by 2005 the manufacturing sector recovers all of these previously lost jobs; and by 2010 there is an additional 24 manufacturing jobs in the state's economy. Also, wages in durable manufacturing recover by 2007, and by 2010 there is an additional $860,000 in wages. Further, the Government sector experiences a small loss of employment in 2000, losing 57 jobs. However, by 2010 this expands to a loss of 271 jobs.
In summary, the closure of all TWA facilities in Missouri would have deleterious impacts on the Missouri economy. The state economy would recover, albeit slowly. Although this scenario is unlikely to happen, it is possible that the merger would result in the closure of maintenance bases and corporate offices in Missouri. From this analysis, it appears that the closure of the overhaul/maintenance base in Kansas City would have the greatest negative impact on the state's economy - more than the closure of TWA's administrative and corporate offices in Kansas City and St. Louis.
 Total Loss Scenario - Employment by Region, 2000-2010 |
 Overhaul Base Loss Scenario - Employment by Region, 2000-2010 |
 Administrative and Corporate Loss Scenario - Employment by Region, 2000-2010 |
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