From scandal to strike, Boeing to Bunge: Top business stories of 2019

From scandal to strike, Boeing to Bunge: Top business stories of 2019

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ST. LOUIS — The region’s boosters have much to crow about this year.

A group of civic and business leaders persuaded a third professional sports league — Major League Soccer — that a team would thrive here. The U.S. government broke ground on a brand-new facility for its geospatial spies. A community of startups began to grow around it.

And big companies did big things:

Clayton-based health care company Centene Corp. made another bet on the industry, announcing the $17 billion acquisition of WellCare Health Plans, boosting likely revenues close to $100 billion a year.

Boeing Co., even in the midst of its 737 Max scandal, quietly grew its regional workforce by 2,000 jobs, to about 16,000.

And the public agribusiness giant Bunge Ltd. said it was moving its global headquarters from New York to Chesterfield.

There were stumbles, to be sure. The effort to forcibly combine St. Louis’ long-divided governments ended abruptly when its champion, the quasi-nonprofit Better Together, couldn’t carry the weight of multiple scandals in addition to its controversial reunification plan.

And then St. Louis Mayor Lyda Krewson shocked the region by pulling the plug on the city’s study on privatizing the St. Louis Lambert International Airport, dealing a blow to city efforts to boost revenues.

Still, the economy was booming. Unemployment was down. Job counts grew. And, all year long, high-tech startups — the Christmas candy for local economies — kept popping up, making announcements, and declaring their openings, here in St. Louis.

Here were the biggest stories:

January: Economic development chief removed

The St. Louis Economic Development Partnership began 2019 in crisis.

Two days after the new year, the board of the agency, formed six years prior to merge St. Louis and St. Louis County’s business recruitment functions, met for hours in closed session. The discussion: the fate of its embattled CEO, Sheila Sweeney.

The week before, a Post-Dispatch investigation reported the agency was essentially run by former St. Louis County Executive Steve Stenger, and its workforce was beset by low morale and poor leadership.

Sweeney, installed in the first year of Stenger’s tenure, was removed Jan. 3. She would later plead guilty in the federal corruption probe that brought down Stenger. The indictments centered on actions taken by the partnership to award contracts to Stenger’s campaign donors, many of which the newspaper reported on months earlier. John Rallo, the businessman who won lucrative deals at Stenger and Sweeney’s behest, was also indicted.

Sweeney would avoid jail time, receiving probation and a $20,000 fine for her role in the scheme.

Partnership President Rodney Crim, largely sidelined during Sweeney’s tenure, took the helm as interim CEO in January. Crim, a longtime economic development official who previously ran St. Louis city’s development arm before moving to Clayton in 2013 to help form the Partnership with Denny Coleman, spent 2019 trying to stabilize the organization.

His efforts have been rewarded. The St. Louis County Council began funding the organization again and in December, the largely new partnership board tapped Crim as its new CEO.

March: Boeing woes, but local growth

Boeing, under fire nationwide, was quietly growing here.

In March, a second fatal 737 Max crash led to the plane’s grounding, whistleblower complaints, Congressional hearings, the CEO’s ouster, and, by year’s end, Boeing’s decision to suspend production starting in January. The move will affect suppliers across the country, including St. Charles-based LMI Aerospace.

At the same time, a surge in defense orders from the U.S. military has led to a 2,000-employee growth spurt in St. Louis operations. In north St. Louis County, Boeing is handling an influx of orders for new F/A-18 Super Hornets, and revamping older ones that have been in the Navy’s fleet for years.

It’s also begun production of the U.S. Air Force’s next generation training jet, the T-7, a franchise contract it won last year for a jet that is expected to remain in production for well over a decade. Even its legacy F-15, revamped with new technology, won its first new orders from the Pentagon in over a decade.

Meanwhile, Boeing broke ground on an expanded munitions factory in St. Charles, which, among other things, converts conventional bombs into guided “smart” bombs using computerized tail fin kits.

August: Bunge moves to STL

Finally, a major corporation announced it would move to the region.

After what seemed to be a string of corporate departures (often via mergers or acquisitions), global grain-trading giant Bunge Ltd. announced in August it was moving its global headquarters from New York to Chesterfield — already home to the company’s North American base.

The move makes Bunge the region’s second-largest public company, trailing only Centene in annual revenue. It also further cements the region’s stature as a food and agribusiness hub — an attribute Bunge touted in its decision to relocate.

Despite the company’s size and footprint here, St. Louisans could perhaps be forgiven for questions about who, exactly, Bunge is, and what it does. The company is focused on the largely anonymous business of buying and selling staple commodities like corn, wheat, rice and soybeans.

Experts and insiders, though, recognize Bunge as a major player in the global agribusiness scene — one of the so-called “ABCD” quartet of dominant grain traders, along with Archer Daniels Midland, Cargill and Louis Dreyfus Co.

Although trade disputes and a global glut of grains have contributed to recent turbulence in the industry, some analysts say Bunge, as a broker of world agricultural trade, will continue to grow.

The company’s recent financial performance has also been buoyed by its ownership stake in Beyond Meat — the vegan “meat” alternative now booming at fast-food chains.

September: GM workers strike

General Motors workers stepped onto the picket line late on Sept. 15.

After contract negotiations between the company and the union broke down, Wentzville Assembly plant workers joined their colleagues across the country, picketing in four-hour shifts, 24 hours a day, for 40 days. It was GM’s longest strike since 1998, when workers in Flint, Michigan, walked out for 54 days.

Workers, paid $250 each week — later upped to $275 — from the union’s strike fund, struggled to make ends meet. Some Wentzville businesses said they were seeing fewer customers as the strike dragged on.

The union was already grappling with controversy. A federal corruption probe uncovered embezzlement allegations against top officials at United Auto Workers Region 5, based in Hazelwood and covering 17 states.

Eventually negotiators reached a tentative deal, closing three U.S. plants but including a path to full-time status for temporary workers and a $1.5 billion investment to build the company’s “next generation” of midsize pickup trucks in Wentzville.

Wentzville was one of the last major plants to vote; 64% of production workers and 70% of skilled trades workers approved the contract. The next day, the union announced that the vote had passed nationally, and GM employees quickly went back to work.

October: Emerson pressured to split

The whole world now knows Emerson owns eight corporate jets.

New York hedge fund and activist investor D.E. Shaw sent a scathing letter to the Ferguson-based industrial company in October, citing the $20-million-a-year aircraft fleet as an example of corporate costs it claimed were as much as $1 billion too high. D.E. Shaw also accused Emerson of overpaying top executives, but its main point was that Emerson should split itself in two.

Shortly after D.E. Shaw’s interest in the company became known, Emerson announced a comprehensive review that could result in just what the activist wanted: a separation of its industrial automation business from other operations that include tools and cooling equipment. The review is expected to be done by February.

By early November, Emerson reached a truce with its critic. It offered a board seat to a nominee suggested by D.E. Shaw and agreed to make some changes in corporate governance.

The few weeks of fireworks seemed to benefit shareholders: Emerson stock has risen more than 25% in 2019 — the best annual performance since 2013.

November: Spy center breaks ground

Top U.S. intelligence and military dignitaries descended on north St. Louis in November to turn shovels of dirt.

Almost four years prior, federal officials chose the 97-acre site at Jefferson and Cass avenues as the new home of the National Geospatial-Intelligence Agency’s $1.7 billion western headquarters.

The decision followed a tense competition that pitted the city against its Metro East neighbors, both competing for the huge construction contract and, more importantly, the facility’s 3,000-plus high-paying jobs.

The NGA had called St. Louis home for decades. But it also said it desperately needed to modernize its south Mississippi riverfront headquarters.

Preparation for November’s groundbreaking had been painful: The city had to buy out dozens of property owners in the St. Louis Place neighborhood and clear land that had held generations of residents; the costs exceeded $114 million.

The opening is planned for 2025. Multiple geospatial companies, hoping to capitalize on the NGA investment, have already announced startups here. And city officials are planning now how to encourage complementary development around the site.

North St. Louis hasn’t seen a larger project in decades.

December: Airport privatization bid implodes

Five days before Christmas, St. Louis Mayor Lyda Krewson killed the bid to privatize the airport.

Top city officials agreed last year to consider leasing St. Louis Lambert International Airport to private contractors, an idea that was almost immediately polarizing. Proponents saw it as a chance for St. Louis to make $1 billion; critics questioned the effort’s transparency, conflicts of interest and the need at all, given recent growth there.

By December of this year, Krewson was hearing bad news from almost all sides. Closed meeting minutes leaked to the Post-Dispatch suggested favoritism by Krewson’s staff. The St. Louis County Port Authority voted to study the issue itself — and to explore regional governance of the city-owned airport. Business leaders began approaching Krewson with concerns.

And that was it. On the Friday before the holidays, Krewson went on St. Louis Public Radio to announce the effort’s end.

“We’ve got a lot of opportunities there,” Krewson told Sarah Fenske, host of St. Louis on the Air. “But if we don’t have the support of our community, of our business leaders and our elected officials, then we’re not going to get there with this process.”

Christmas day: Union Station’s aquarium opens

All aboard, for a whole new Union Station in downtown St. Louis.

The $187 million redevelopment opened to the public in stages, beginning in September, the first time the region got a peek at the remaking of the historic Market Street train depot-come-indoor mall, which had been nearly vacant for years.

The new Union Station is now an entertainment complex, complete with a mirror maze, ropes course, carousel, mini golf course, two new restaurants and a 200-foot Ferris wheel.

Steve O’Loughlin, president of Lodging Hospitality Management, which paid $20 million for the station in 2012, said the complex attracted twice the number of visitors he expected in its first few months — up to 10,000 people daily on a busy weekend.

The St. Louis Aquarium at Union Station launched on Christmas Day.

Hundreds, dressed in Santa hats, festive sweaters and homemade crocheted caps, lined up to get in.

Jacob Barker, Bryce Gray, Erin Heffernan, Annika Merrilees, David Nicklaus and Janelle O’Dea, of the Post-Dispatch, contributed to this report.

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