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St Louis and McDonnell Douglas Corporation

St. Louis McDonnel Ariel View

Overview:

In St. Louis, Missouri, McDonnell Douglas had a large presence, employing more than 40,000 employees. Within a six-month period, close to 10,000 employees were laid off.

OEA Support:

An OEA-funded planning effort identified the impacts of the downsizing and helped the community develop a strategy for community response.

Overview

The McDonnell Douglas Corporation, now The Boeing Company, is one of the largest aerospace manufacturers and defense contractors in the United States.

In the 1990s, St Louis, Missouri had a defense driven economy. The 720 prime defense contractors employed approximately one out of seven workers in the area, with the McDonnell Douglass Corporation employing 42,000. Within a six-month period, close to 10,000 employees were laid off, impacting the community significantly. Between 1990 and 1994, an additional 25,000 jobs were lost. By 1997, only 99,000 were employed by defense-related firms, down from a high of 159,000 in 1989.

OEA Support

In an effort to assist St. Louis and the State of Missouri adjust to these cuts in employment, the St. Louis Defense Adjustment program was created with the assistance of OEA. Over the next several years, OEA provided planning and organizational funding to support a coordinated and comprehensive regional response to the downsizing.

The plan focused on:

  • Public/private investment and partnership through the Department of Labor Business Diversification Pilot project
  • Conferences, seminars, and training for economic diversification activities
  • Employee retention through both the Cornerstone partnership (a regional training center) and the McDonnell Douglass Worker Retraining Center
  • Small business growth through St. Louis Enterprise Centers and Center for Emerging Technologies
  • A Regional Revolving Loan Program to help develop business in the area
  • Increased focus on exports through the World Trade Center in St. Louis
  • Diversification of the regional industry and business base by focusing on advanced manufacturing, biotechnology and life sciences, and the environment

Results

As a result of this plan and OEA support, by 1994, 75 percent of all workers laid off earlier were re-employed, working in the greater St. Louis region. Two-thirds of those workers earned as much or more money than they did while working at their previous job, including 10 percent that own their own businesses.

The success of this city can be best summed up by this New York Times quote:

“As one of the first regions to confront weapons cutbacks and develop plans for dealing with them, the St. Louis area is emerging as a national laboratory for the post cold war economy. St. Louis responded quickly with government and private sector efforts to help laid off workers and further the diversification of the region's economy. cold-laid-region”

New York Times, August 8, 1991