Offsetting losses in other manufacturing sectors, the St. Louis economy continues to benefit from military aerospace production dating to the first prototypes that rolled out of McDonnell Aircraft Company hangars in the mid-1940s.
Since then, McDonnell and its eventual corporate partner, the Douglas Aircraft Company, were absorbed by Boeing; aircraft design and technology has advanced in ways the engineers recruited by James S. McDonnell could never have imagined; and the customers for the Boeing F/A-18 fighters are spread across the globe.
Through it all, one constant has remained: A military jet manufactured in St. Louis has yet to fly without a human in the cockpit.
Now, more change is afoot as the U.S. moves steadily toward a point where Unmanned Aerial Vehicle (UAVs) missions will one day surpass reconnaissance and combat operations flown by human pilots.
For St. Louis, the gravitation toward a defense system capable of destroying targets from remote locations brings another question into focus: Will the local production of traditional, manned fighter jets wind up as collatoral damage?
A top Boeing official, two key area members of Congress and the analysts are emphatic that Boeing's future here remains solid. UAV production, they maintain, poses no threat to 2,500 local Boeing manufacturing jobs -- the majority of which are dedicated to the assembly of Super Hornets.
"We intend to be in St. Louis for a long, long time," said Chris Chadwick, president of Boeing Military Aircraft. "We want it to be strong, and we are always looking for opportunities to make it stronger. I am very bullish on St. Louis."
In addition to its $5.2 billion contract to supply Super Hornet carrier jets to the U.S. Navy, the St. Louis production arm of the Boeing Defense, Space and Security is poised to fill standing orders for the governments of Singapore and South Korea.
U.S. Sen. Claire McCaskill, D-Mo. hinted in an interview last week that possible near-term agreements with Brazil, Japan and Australia are in the offing.
"A lot of industries would die for that strong a backlog," said Chadwick, predicting Super Hornet production will continue through 2020 if not later (Boeing also manufactures missile systems at factories in St. Charles).
Analysts concur that the outlook for Boeing production in St. Louis, at least for the short-term, remains bright.
"At this point, it's premature to sound the death knell for any program or particular factory," said David Berteau, the director of the Defense Industrial Initiatives Group with the Center for Strategic and International Studies.
UNMANNED FUTURE
Though Boeing's role in the future of unmanned flight remains murky, the Pentagon's intent to move in that direction is clear.
Defense and aerospace analysts with the Teal Group anticipate annual global spending on unmanned aircraft to balloon from current yearly expenditures of $5.9 billion to $11.3 billion in 2020.
The forecast estimates the United States will account for 77 percent of that spending. The Teal prognosis supports a 2010 Defense Department report that projects a 177 percent increase in UAV inventory from 2011-2020.
"Let's just say, in heavily defended airspace, there will be increasing interest in ... unmanned vehicles," said U.S. Rep. Todd Akin, R-Mo., a member of the House Armed Services Committee.
Because they require less air and ground support, UAVs are less expensive to fly. The absence of a cockpit and pilot instrumentation also means the vehicles are smaller and therefore not as costly to produce. Unmanned combat platforms have the additional appeal of keeping American military personnel out of harm's way.
Boeing receives mixed grades from analysts for its UAV research, development and production programs.
The "huge competition" for unmanned vehicles has pitted Boeing, Northrop Grumman and other prominent defense contractors against upstarts like AeroVironment Inc., a trailblazer in UAV design and production, said Michael Blades, an analyst with Frost & Sullivan, a San Antonio marketing and research firm.
And Boeng, he contends, was "late to the party" in developing unmanned aircraft.
As evidence, Blades points to Boeing receiving only two percent of Department of Defense funding for unmanned vehicles in 2010 - a percentage that Blades notes had doubled through September of this year.
Philip Finnegan, the director of corporate analysis for the Teal Group, estimates Boeing currently spends approximately $750 million annually on its unmanned program.
Finnegan argues that Boeing picked up its game with the 2008 purchase of Insitu, a comparatively small UAV developer located four hours south of Seattle in Bingen, Wash.
The acquisition "broadened what (Boeing) can address in unmanned systems," he said.
Insitu produces the unmanned ScanEagle, NightEagle, Integrator and Inteceptor lines already used by the Navy and other branches of the service.
Boeing engineers in St. Charles and St. Louis are currently designing prototypes for the next generation of the company's unmanned fleet, the line of Phantom Works aircraft.
POLITICAL UNCERTAINTY
Ultimately, the fate of unmanned programs at Boeing, and indeed all defense contractors, depends on what the Pentagon wants and the amount of money Congress sets aside to meet those demands.
Akin said the 2011 budget that remains on hold after the Congressional Super Committee failed to reach a consensus on the federal deficit may portend what lies ahead for Pentagon allocations.
The sequestered budget calls for mandatory cuts in defense spending.
"It's just hard to say where the ball is going to bounce," said Akin.
Berteau believes defense contractors large and small will proceed cautiously until - or if - the budget issues are resolved.
"The big companies face the same issue as everyone else today," he said. "They are not getting a clear signal about future demand from their customers (the government)."
Chadwick nonetheless stresses that Boeing will never stand pat with the hand it is holding. "We don't always know where we are headed, but we generally know and are able to target our investment," he said.
Chadwick foresees Boeing bumping up its commitment to unmanned platforms while maintaining the company's support of its existing lines, including F/A-18 production.
Chadwick joins defense analysts and the Pentagon itself in envisioning a future with airborne manned platforms supporting unmanned technology on surveillance and combat missions.
The strategy includes ongoing development of U-Class vehicles designed for aircraft carrier launches and landings.
"I don't know of anyone in the military who doesn't think unmanned carrier jets are somewhere in the future," said McCaskill, who sits on the Senate Armed Services Committee.
The upshot: "It's not going to shock me if, because of budget constraints, the Pentagon says it (may) forgo another (manned) carrier jet."
The "Aircraft Investment Plan" supplementing its 2011 budget, the Defense Department supports that conclusion by noting that within 30 years "today's 'legacy' force" - Super Hornets included - will be mothballed.
Frost & Sullivan analyst Blades says long-range Pentagon planning places Boeing production in St. Louis on a collision course with change - probably not for the better - as the legacy force gradually fades away.
Even if they do manufacture the Phantom Works unmanned aircraft in St. Louis, "there won't be a lot of them," Blades said. "Those things can stay in the air for ten days. How many would you need?"
Steve Giegerich covers the manufacturing and employment for the Post-Dispatch. He blogs on STL JobsWatch. Follow him on Twitter @stevegiegerich and the Business section @postdispatchbiz.






