HAZELWOOD — Boeing's defense division announced Friday that it had reached an agreement to buy a major supplier, threatening to reduce operations by the end of the year. It saved a factory in northern St. Louis County that it claimed was important. Fighter plane.
Boeing announced it would take over the St. Louis GKN site and hire 550 workers at the plant, nearly all of the 600 people still employed at the Hazelwood plant.
Financial terms of the deal were not disclosed.
Steve Parker, Boeing's senior vice president and chief operating officer for defense operations, said the deal is a “win-win-win” for Boeing, GKN employees and St. Louis.
“Boeing is growing across the region with a healthy balance of current programs, while also exploring future opportunities,” Parker said in a statement. “This contract not only allows us to serve our customers, but also provides highly skilled GKN employees with the opportunity to apply their immense talent in support of the warfighter and the St. Louis defense and aerospace industry. You can give.”
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Boeing's contract with GKN Aerospace's Hazelwood facility comes at a pivotal time for the defense contractor and its 16,000 employees in the St. Louis area. The U.S. Navy just awarded Boeing a $1.3 billion contract for 17 more F/A-18 fighter jets, and President Joe Biden's administration has signed a $180 contract with Israel for up to 50 F-15 fighter jets. It is pursuing a billion dollar contract. This is one of the largest arms deals with Israel. country a few years later. Both fighter jets are assembled here.
Meanwhile, Boeing has begun a $1.8 billion expansion of its facilities around St. Louis Lambert International Airport as it prepares to compete with defense giant Lockheed Martin for the U.S. Air Force's next-generation fighter jets. and is widely believed to be part of this plan.
But GKN, which was an in-house manufacturing unit until Boeing sold it in 2001, has emerged as a potential problem for Boeing's St. Louis operations for more than two years. GKN announced plans to close the Hazelwood factory in early 2022, issued formal layoff notices last summer, and said it would begin laying off the factory's 700 employees before closing the factory by the end of this year. Ta.
Boeing sued GKN and its British parent company Melrose Industries in December 2022, claiming that GKN was the only supplier capable of producing the “super plastics” and “flight control surfaces” needed for fighter jets, and that the closures were against GKN and its British parent company, Melrose Industries. They claimed that this was in violation of the contract with the aircraft company. . Boeing claimed that GKN and Melrose wanted Boeing to buy the factory on unfavorable terms, and that the companies had even turned down other acquisition offers.
But GKN and Melrose said the factory's operations had become “unsustainable” and were tied to a loss-making contract with Boeing.
Given Boeing's dependence on suppliers, a deal with GKN seemed almost inevitable. In a court filing last month, Boeing said GKN planned to destroy critical parts needed to build F-15 and F/A-18 fighter jets and asked for an emergency hearing. GKN agreed not to destroy the equipment.
Some point to Boeing's troubles with GKN as further evidence that the aerospace giant has outsourced too many tasks over the years, but the criticism largely comes amid high-profile equipment failures on commercial aircraft. , aimed at the company's commercial aircraft business.
But the contract means Boeing, which is vying for a new fighter jet contract to maintain St. Louis' status as a strategic production site for the U.S. military, is worried that production there will be halted and unwelcome publicity for its defense business. This is expected to eliminate concerns that this may occur. .
