The world’s largest aerospace company is moving its defense division to the Washington, D.C., region at a time when Pentagon defense spending has entered a new era of scrutiny from many corners, including President-elect Donald Trump.
Boeing Co. next month will relocate its Defense, Space & Security division from St. Louis to its northern Virginia offices in Crystal City, spokesman Todd Blecher confirmed to Military.com. The news was first reported by DefenseOne.
“We are making the move to enhance our ability to engage with leaders of our customers in the Pentagon and NASA, as well as key decision makers on the Hill and in the presidential administration,” Blecher said in a statement.
The move is the biggest for the division after it merged with McDonnell Douglas in St. Louis in 1997.
The news comes weeks after Leanne Caret, the president and chief executive officer of the unit, was weighing future options to spend more time inside the beltway to meet with Pentagon officials and lawmakers, DefenseOne previously reported.
At first, “approximately a dozen people will move here from St. Louis, including [Caret],” Blecher said. “Over time that total could increase to more than 50 people.”
Boeing, whose defense contracting business is second only to Lockheed Martin Corp., will continue to have about 14,000 employees in the St. Louis area, Blecher said.
Boeing has unwittingly been in the public eye recently after Trump blasted the company on Twitter over potential prices of the new Air Force One aircraft.
“Boeing is building a brand new 747 Air Force One for future presidents, but costs are out of control, more than $4 billion,” he tweeted last week. “Cancel order!”
Many took issue with Trump’s use of the $4 billion figure to describe the overall cost of the program. While the figure wasn’t that far off from the total estimated value, it’s worth noting the company hasn’t received anywhere close to that amount yet — and the total figure includes funding for two airplanes designed to withstand electromagnetic attacks and other doomsday scenarios.
The remarks caught many industry observers by surprise considering he proposed a Reagan-like military buildup during his campaign.
Boeing attempted to settle the dust.
“We are currently under contract for $170 million to help determine the capabilities of these complex military aircraft that serve the unique requirements of the president of the United States,” Blecher said in an emailed statement at the time.
“We look forward to working with the U.S. Air Force on subsequent phases of the program allowing us to deliver the best planes for the president at the best value for the American taxpayer,” he added.
Michael Hertzog, a spokesman for the Air Force, said for research and development costs, the service has budgeted $2.7 billion (as opposed to $2.9 billion) in the latest spending plan. He said that figure could change “as the program matures with the completion of the risk reduction activities.”
Hertzog didn’t specify a figure for procurement costs.