MASCOUTAH • Boeing Co. will open a manufacturing facility at MidAmerica Airport late this year - the company's first assembly operation in Illinois.

State political leaders and Boeing's top defense executive gathered Thursday inside the commercial building that will house the company's modest-size operation. Initially, the venture will yield 75 new jobs, though everyone on hand said they expect the investment will expand over time.

"We see this as an initial step in a long-term, growing partnership," said Dennis Muilenburg, president and chief executive of St. Louis-based Boeing Defense, Space & Security.

The state of Illinois pitched in a $2.3 million "business investment package" to entice Boeing's $7 million investment. The tax credits are based on job creation, Illinois Gov. Pat Quinn said. Other incentives include job training money and local enterprise zone benefits.

Boeing declined to reveal many details or estimate how many jobs could be created in future years. The assembly and subassembly work will cross numerous aircraft platforms.

For MidAmerica Airport, the operation is a glimmer of hope for a facility that has struggled since its inception. The $213 million airport opened in 1998 with the expectation that it would build a sturdy base of commercial air service. It never happened.

Numerous airlines have come and gone - Pan American Airways, Great Plains Airlines, Allegiant Air, among them. Now airport leaders are hoping to lure cargo business to the facility, which has been a money-loser for St. Clair County.

For Boeing Defense, the airport was an appealing option because of its existing infrastructure and its relatively close proximity to the company's St. Louis headquarters and U.S. Transportation Command at Scott Air Force Base.

It appears there was little, if any, competition for the site.

Denny Coleman, president of the St. Louis County Economic Council, said Boeing never approached the county about expanding on its headquarters campus north of Lambert-St. Louis International Airport, and that he wasn't aware of the expansion until it was announced.

From a regional perspective, Coleman said, he was "very happy" for the airport. "MidAmerica has been looking for a significant tenant for some time," he noted.

Boeing spokeswoman Lisa Maull said the expansion to the eastern half of the region is a "logical progression" for a company with significant manufacturing facilities in St. Louis and St. Charles counties.

Boeing's aerospace division employs 16,000 people in the St. Louis area. None of the new jobs in Illinois is expected to come from the current work force. The company will post the new job openings for the MidAmerica facility by the first quarter of 2011, the company said.

Some aerospace analysts said the move into Southern Illinois appears to make sense.

Faced with a smaller share of U.S. military work, the company must look for ways to maximize revenue, said Loren Thompson, military analyst with the Lexington Institute. One way to do that would be to pursue support or upgrade work on the type of military aircraft based at Scott. Further, he added, if Boeing wants to maintain its military business, it needs a "bigger political footprint" to build support in locations like Southern Illinois.

"It is remarkable how responsive politicians become when even a handful of jobs are in their state or district," he said.

Maull said details of the kind of work to be done at MidAmerica are still being worked out.

James Carafano, a military and homeland security expert at the Heritage Foundation, said it would be "hard to believe" Boeing would look at a manufacturing facility in the United States if it failed to help the company compete globally.

The new manufacturing facility would benefit if Boeing wins the Air Force contract for the next generation aerial-refueling tankers. Boeing is competing for the contract to build 179 of the planes. The Defense Department is expected to name the winner in November.

Boeing has not been bashful about promoting the job creation bonanza that would follow its landing of a tanker contract. Also on Thursday, Boeing trumpeted the 580 jobs and $30 million in yearly economic impact the tanker contract would generate for the state of New York.

Back in Illinois, U.S. Rep. Jerry Costello, D-Belleville, predicted other businesses would follow Boeing to the St. Clair County airport. The deal with Boeing was not made overnight, he said, describing how the deal came together only after numerous meetings and visits with Boeing officials.

In the end, Costello said, "it was a perfect fit for their company."

Tim Logan of the Post-Dispatch contributed to this report.