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Boeing to relocate $30B defense division headquarters to Virginia

Boeing to relocate $30B defense division headquarters to Virginia

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WASHINGTON — When Donald Trump occupies the White House in January, he will be a lot closer to the senior leaders at Boeing running the Air Force One program he has threatened to cancel. The company announced Tuesday that about a dozen of its senior defense leaders are moving from St. Louis to Boeing’s Washington-area headquarters.

The company has been discussing moving its defense unit to the Washington area for months, and it is not related to Trump’s recent vow, officials said. Rather it is “all driven by being closer to the customer,” Boeing spokesman Todd Blecher said.

Earlier this year, Boeing appointed Leanne Caret to take over its Defense, Space and Security unit, a $30 billion business with 50,000 employees across the globe. Caret “puts a premium on personal engagement with senior leaders of the Pentagon, NASA and the Hill,” Blecher said. “And so this has been under consideration for some number of months.”

Many of the nation’s largest defense contractors-including the likes of Lockheed Martin and General Dynamics-are already located in the Washington area. Northrop Grumman was one of the most recent to join, moving to Falls Church, Virginia, from Los Angeles in 2011. Federal contractor SAIC relocated its headquarters in San Diego to McLean two years earlier.

In all, about a dozen Boeing senior executives will make the move from St. Louis to Washington in January, and eventually about 50 staff members would join them. The company’s Washington operation center is headquartered in a new, gleaming building in Crystal City, Virginia, ear the Pentagon.

The company’s corporate headquarters are in Chicago, but it has run its defense business out of St. Louis, where it builds the F/A-18 Super Hornet, ever since it merged with McDonnell Douglas in 1997.

Some 14,000 employees will remain in the St. Louis area, Blecher said. Employees in St. Louis were told of the decision at 11:30 a.m. Eastern time Tuesday. Since the senior leadership is moving, the company considers the headquarters of the unit to be moving as well.

The decision comes at a critical time for Boeing, which is involved in many high-profile defense and space programs. In addition to building Air Force One, it also makes the new fueling tanker, and it is competing to build a new jet for the Air Force’s fighter jet training program.

The company is developing a spacecraft that would restore NASA’s ability to fly astronauts to the International Space Station. It’s also one of the prime contractors on a giant new rocket, known as the Space Launch System.

Boeing found itself in Trump’s crosshairs last week after he tweeted that the costs of the Air Force One program “are out of control, more than $4 billion. Cancel order!” Later he told reporters that he thought the cost was “ridiculous. I think Boeing is doing a little bit of a number. We want Boeing to make a lot of money, but not that much money.”

Boeing chief executive Dennis Muilenburg called Trump and vowed to work with him to keep the costs down. The company also has pledged $1 million to help pay for Trump’s inauguration. It made the same pledge for President Barack Obama.

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