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Defense Industry Adjustments

Defense Industry Adjustments. Implications & Strategies for Communities. By Denny Coleman President & CEO, St. Louis County Economic Council Immediate Past Chair, International Economic Development Council. The Challenge & Impact. St. Louis’ Defense-Driven Economy (1990)

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Defense Industry Adjustments

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  1. Defense Industry Adjustments Implications & Strategies for Communities By Denny Coleman President & CEO, St. Louis County Economic Council Immediate Past Chair, International Economic Development Council

  2. The Challenge & Impact St. Louis’ Defense-Driven Economy (1990) • 1 in 7 jobs tied to defense industry • $4.4 billion in total wages • McDonnell Douglas • Largest United States defense contractor • Largest employer in region (42,000 employees) • 720 prime defense contractors In less than six months 10,000 McDonnell Douglas employees displaced McDonnell, Boeing and other direct, defense-related jobs lost (1990-1994):25,000+ • 59,000– estimated employment loss from defense downsizing in St. Louis region

  3. Response, Leadership & Governance St. Louis Defense Adjustment Program • Broad-based involvement by private and public entities • Regional focus • Action-oriented • Two-tiered • Steering Committee • Working Committee • Inclusive • Many functional sub-communities

  4. St. Louis Defense Adjustment Committee

  5. Financial Partners • Plus state, local and private funding Impact Analysis • Company surveys • Worker surveys • Regional Economic Adjustment Plan

  6. Strategic Direction Worker re-training for new skills Company re-orientation for new markets New economic development initiatives • International trade: World Trade Center St. Louis • Innovation: Critical Technology Partnership • Entrepreneurial support: finance, incubators, mentoring and training

  7. 75%of laid off workers re-employed • 12%unemployed rate, (22% nationally) Results • 66%retained/increased earning level • 93%re-employed in St. Louis region 102,000 net NEW jobs gained! • 10%of laid-off workers operating their own business

  8. Lessons Learned Create regional public-private partnerships Use win-win strategies Create broad-based participation and support Focus on strategic versus reactionary Utilize available federal resources • OEA, EDA, DOL, NIST Develop replicable processes with lasting economic development benefits Celebrate and promote successes

  9. Financial Analysts Approve St. Louis County received AAA bond ratings during Defense Adjustment Period Highest possible ranking of economic stability Analysts recognized value of aggressive approach toward a stronger and more diverse economy

  10. St. Louis Defense Adjustment Program “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.”

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