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

3. 2012 ADC ANNUAL CONFERENCE| PAGE 3 3 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

4. 2012 ADC ANNUAL CONFERENCE| PAGE 4 4 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

5. 2012 ADC ANNUAL CONFERENCE| PAGE 5 5 St. Louis Defense Adjustment Committee Civic Progress Defense Logistics Agency Development Strategies East-West Gateway Coordinating Council ESCO Essex Industries Franklin County Jefferson County Madison County McDonnell Douglas Mo Dept of Job Development & Training Mo Dept of Economic Development Mo Office of Employment Security St. Louis County St. Louis Economic Conversion Project State of Illinois State of Missouri U.S. Army Aviation & Troop Command RCGA Scott Airforce Base Southern Illinois Leadership Council Southern Illinois University St. Charles County St. Clair County St. Louis City UM-Rolla UM-St. Louis Washington University Worker Re-Entry Program

6. 6 2012 ADC ANNUAL CONFERENCE| PAGE 6 Financial Partners Plus state, local and private funding Company surveys Worker surveys Regional Economic Adjustment Plan Impact Analysis

7. 7 2012 ADC ANNUAL CONFERENCE| PAGE 7 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

8. 8 2012 ADC ANNUAL CONFERENCE| PAGE 8 Results 12% unemployed rate, (22% nationally) 66% retained/increased earning level 93% re-employed in St. Louis region 10% of laid-off workers operating their own business 75% of laid off workers re-employed 102,000 net NEW jobs gained!

9. 9 2012 ADC ANNUAL CONFERENCE| PAGE 9 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

10. 10 2012 ADC ANNUAL CONFERENCE| PAGE 10 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

11. 11 2012 ADC ANNUAL CONFERENCE| PAGE 11 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.”