As part of its long term-cost cutting plan, Boeing Space and Defense is shuttering some facilities and reshuffling jobs to facilities in St. Louis, Missouri and Huntsville, Alabama.
Boeing will eliminate 500 positions nationwide over the next four years beginning in 2017, a company spokesman tells FlightGlobal. The company does not know where those cuts will come from specifically yet, but plans to inform its employees first when the decision is made, he adds.
The company plans to close sites in El Paso, Texas and Newington, Virgnia, the company says. Positions at the Kent, Washington facility will move to nearby Tukwila. Meanwhile, Boeing will shift 1,600 jobs to Los Angeles County, California, 500 jobs to St. Louis, Missouri and 400 jobs to Huntsville, Alabama.
“By the end of 2020 Boeing will reduce facilities space by approximately 4.5 million square feet,” says Leanne Caret, president and chief executive of Boeing Defense, Space & Security.
David Pitchforth, current managing director of Boeing Defence UK, will take over a restructured global operations group that will align Boeing Defence Australia, Boeing Defense Saudi Arabia, and Boeing Defence United Kingdom. The three organizations will continue operating independently, the company says.
Even as the defence industry’s stock prices soared last Wednesday following the election of Donald Trump, Boeing appears to be following the consolidation plan it began six years ago as military budgets tightened. Last month, the company announced the closure of its Macon, Georgia defence plant in December.
In 2012, the company announced its plan to cut 30% of defense executives from 2010 levels. Today’s announcement marks another hit for the Kent facility, which saw 2,000 jobs move to Missouri and Oklahoma. Boeing’s Wichita, Kansas site, shut down in 2014 after more than 80 years.
Until the new presidential administration arrives in January, Boeing and its peers Raytheon, Lockheed Martin and Northrop Grumman will continue to face tight defence budgets at home. But abroad, the US defence industry could find new opportunities.
Last week, the Defense Security Cooperation Agency (DSCA) announced foreign arms sales totaled $33.6 billion in Fiscal Year 2016. While that marks a $13 billion decrease compared to last year, US defence companies are nonetheless turning their eyes toward global markets.
For Boeing, which has struggled with its sales of fighter jets in recent years, foreign sales could provide a stabilising force in an uneasy domestic market. In September, the US Congress announced it would examine the long-awaited sale of fighter jets to Qatar, Kuwait and Bahrain. Qatar has requested 36 Boeing F-15E Strike Eagles, with an option for a total of 72, and Kuwait has asked for 28 Boeing F/A-18 E/F Super Hornets, with an option for a total of 40 aircraft.