Planes and People
Mon February 17, 2014
Business Rundown: Our Military Economy
We just kicked off a year-long celebration of St. Louis’ 250th anniversary. As an editor, I had the pleasure of working with Maria Altman on her audio Valentine to the city. If you haven’t heard the piece yet, you should definitely take a listen; it’s very fun and uplifting.
One of the things I learned from Maria’s story is the role St. Louis has played in the country’s aerospace industry. Besides all the airplanes McDonnell Douglas produced, the company also played a key role in designing the shuttles and ships for NASA’s space programs.
Well, as most any St. Louisan knows, Boeing acquired McDonnell Douglas in the late 1990s, but the company continues to play a big role in our culture and economy. And this past week, we noticed a few interesting developments that could make for a bumpy ride.
The price of a plane
Boeing has supplied two fighter jets to the U.S. Navy for years: the F/A-18E/F Super Hornets and EA-18G Growlers. But both programs may be on the chopping block by 2016. According to a Reuters report, the Navy’s 2015 budget doesn’t include any funding for any extra Super Hornets or Growlers. And, apparently, the Navy’s plans to add funding for termination of the Super Hornet line in 2016.
We won’t know for sure what the Navy’s actual plans will be until the White House submits its 2015 budget to Congress on March 4. In the meantime, Boeing is negotiation with the union that represents the workers on the F/A-18 line, District 837 of the International Association of Machinists and Aerospace Workers.
The Post-Dispatch reported that the two sides are trying to find a way to reduce the cost of making the plane, including reducing the number of Super Hornets built each month from three to two. For its part, the union is hoping that Boeing avoids layoffs and instead offers a voluntary buyout program for workers.
Other military cutbacks
Another part of the region’s air economy is also bracing for a hit. The Air Force is cutting its budget, affecting Scott Air Force Base. The base is looking to cut 40 percent of its active duty personnel. It's hoping to meet that number through a voluntary separations and retirements.
The Belleville News Democrat reports that, even though the Air Force is looking for voluntary reductions at this time, tensions are still fairly high for those who work at Scott. Long-time Air Force personnel and officers worry that even a small misstep could end an otherwise distinguished career.
Of course, one question has yet to be explored: What impact would a smaller Scott Air Force Base have on the economy? After all, about 5,500 people work there – and that’s just the military personnel.
Economy & Innovation