Boeing to Move Defense Headquarters from St. Louis to DC

By Marcus Weisgerber

December 13, 2016

Boeing will move its defense unit headquarters from St. Louis to Washington, a shift intended improve relations between America’s largest aerospace manufacturer and U.S. government officials.

The move — under consideration for months, briefed to Boeing’s board of directors on Monday — comes one week after president-elect Donald Trump tweeted “Cancel order!” regarding the company’s effort to build new Air Force One jetliners.

Boeing officials notified local and state lawmakers, members of Congress, and Pentagon officials this morning of their plans.

This decision highlights our commitment to more strategically engage with customers and decision makers,” said Todd Blecher, a spokesman for the firm’s defense business, who confirmed the move to Defense One.

There had been whispers for several months that Boeing might shift its defense business to Washington. Blecher said Trump’s tweet and subsequent comments about Boeing last week had no bearing on the decision. (Boeing and Pentagon officials have noted that the Air Force One project is only in the design stage, and said that estimated costs could fall if its parameters change.)

Leanne Caret, the president and chief executive officer of Boeing Defense, Space & Security, will begin working full-time from D.C. on Jan. 3, out of the firm’s Arlington, Va., offices near the the Pentagon. Even before the move was approved, Caret was thinking about spending more time in Washington, to increase her face time with federal decision makers.

If one of our customers wants to talk to us, it will be better to say, ‘Leanne can be in your office in 20 minutes’ versus saying ‘She’s going to call you in 20 minutes,” Blecher said.

The move initially involves only a dozen or so executives. Another 50 people could find themselves in moving to Boeing’s Crystal City compound down the road.

My priority as I came into this role was to really establish strong relationships with our customers,” Caret said in an interview at the Reagan National Defense Forum earlier this month. “They’ll be the true test whether we have done that or not.”

Caret already has an office in Crystal City, as do other top Boeing executives not based in Washington. The firm consolidated several of its offices near Washington at a compound in Crystal City that opened in 2014.

Boeing as a whole has been in transition for nearly a year. There was a shake-up in the defense ranks soon after the company lost an $80 billion contract to Northrop Grumman to build stealth bombers for the U.S. Air Force. In February, Caret replaced Chris Chadwick as the head of Boeing’s defense unit. Last month, the firm announced Ray Conner, the head of its commercial airplanes business, would be replaced by General Electric executive Kevin McAllister. It also said it would stand up a “Global Services” division, to support its defense and commercial products.

Boeing’s corporate headquarters is in Chicago. Its commercial airplanes business is based outside of Seattle and a new maintenance division will be based in Dallas.

The firm has run its defense business from St. Louis since 1997, when Boeing merged with McDonnell Douglas — the iconic aerospace manufacturer that built the F-15 Eagle fighter jet and DC-10 commercial airliner. Boeing still builds F-15 and F/A-18 Super Hornet fighters at a factory on the grounds of Lambert-St. Louis International Airport.

The move will be sure to raise eyebrows in St. Louis, where McDonnell Aircraft Corp. was founded in 1939.

We expect to move about 12 people to D.C. next year,” Blecher said. “We will still have 14,000 in the St. Louis area.…I expect us to be a vibrant part of St. Louis for a long time to come.”

Correction: An earlier version of this story said Boeing's board of directors approved the move from St. Louis to Washington. Boeing executives briefed the board about the move on Monday, however, the plan was not subject to their approval, a company spokesman said subsequent to publication. The article has been updated.


By Marcus Weisgerber // Marcus Weisgerber is the global business editor for Defense One, where he writes about the intersection of business and national security. He has been covering defense and national security issues for more than a decade, previously as Pentagon correspondent for Defense News and chief editor of Inside the Air Force. He has reported from Afghanistan, the Middle East, Europe, and Asia, and often travels with the defense secretary and other senior military officials.

December 13, 2016

http://www.defenseone.com/business/2016/12/boeing-move-defense-headquarters-st-louis-dc/133850/