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Boeing defense officials 'lean forward' with bets on future programs in St. Louis area

Annika Merrilees, St. Louis Post-Dispatch on

Published in Business News

Boeing officials signaled, over the past week, that they are shifting their views on the types of defense work the company will take on, as it grows some programs, prepares to end others and embarks on a $1.8 billion expansion project here.

The company is becoming more open to projects where it serves not as the lead, or "prime" contractor, but as a subcontractor or partner, said Bernd Peters, vice president of business development and strategy.

"In areas where it makes sense for us to continue to be the prime (contractor), absolutely we will do that. But we are opening up the aperture, in instances where it makes sense," Peters said.

It wouldn't be an entirely new tactic for the company, which is a subcontractor on Lockheed Martin's F-22.

"We've got to get away from that, 'it's got to be made here' mentality," Peters said. "If the capability already exists out there, there's no pride in us saying 'it's got to be made here.' We will pull it from our suppliers."

At Boeing's complex near St. Louis Lambert Airport in Berkeley, the company plans to end new-build production of the F/A-18 fighter in 2027. Elsewhere on the campus, staff have designed the layout for a manufacturing line to build the T-7 trainer plane, and expect the first parts to arrive later this year. At a brand new, 300,000-square-foot factory across the river in Mascoutah, workers will begin assembling MQ-25 refueling drones later this year.

 

And the company is building a 1.1 million-square-foot manufacturing site next to its Berkeley offices for undisclosed programs.

In the world of aerospace, where decisions play out over the course of decades, Boeing is managing with choices made years ago. Airplanes that first hit the skies more than 40 years ago are still churned out of factories here, packed with new technology and equipment. A development program conceived in the 2010s may not deliver planes until the 2030s.

At the same time, the pandemic-era economy changed the industry's views on how aerospace companies should get paid.

Boeing and its peers went into the COVID-19 pandemic on the hook for fixed-price contracts, meaning that if costs run higher than expected, the manufacturers have to cover the difference. The next few years brought inflation, supply chain problems and historic labor shortages. Losses on those programs accelerated.

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