Boeing to Sell St. Louis Factory - TheStreet

Boeing

(BA) - Get Report

said Thursday that it would sell its 1,700-employee St. Louis-based military aircraft parts fabrication business.

The aerospace giant's

McDonnell Douglas

unit also received an $8.96 billion contract to 222 new "Super Hornet" fighter planes for the U.S. Navy over the next five years, the Department of Defense said Thursday.

The plant closure announcement comes only a day after Deborah C. Hopkins, Boeing's recently hired chief financial officer, said the company was ready to ditch some of its excess production capacity and other assets to save on operating costs.

Shares of Boeing rose slightly following the news. In after-hours trading, Boeing stock was trading up 5/8, or 1.5%, at 41. The stock had risen 1 9/16, or about 4%, to 40 3/8 in regular trading.

Boeing said it would be willing to enter a long-term supplier relationship with the buyer of the St. Louis factory. Boeing is currently operating the factory at 40% of capacity.

The 1.7 million square-foot plant employs about 1,700 workers, 70% of whom are represented by a union. Boeing said it expected most of the employees to be hired by the plant's new owner, but acknowledged that some workers were likely to lose their jobs.

Boeing's new contract for 222 new F/A-18E/F Super Hornet attack jets constitutes the first of up to 548 that the Navy hopes to eventually buy.