Eyeing billions of dollars in savings, Boeing [BA] yesterday said it plans to consolidate some of the organizations within its defense segment, reduce facilities and broaden work with suppliers all aimed at further reducing costs and boosting affordability.
Since affordability initiatives began in 2010 at Boeing’s Defense, Space & Security segment, the company has achieved $2.2 billion in savings and the new initiatives are expected to generate similar savings through 2015, the company said.
Within its defense business, Boeing will have reduced its executive positions by 30 percent since 2010 and the forthcoming consolidations will likely result in additional layoffs, although the company said none are immediately planned.
Boeing said the new affordability initiatives are not driven by the looming prospect of budget sequestration, which could reduce planned defense spending in the United States by around $500 million over 10 years beginning in 2013. The initiatives are also not being driven by this week’s national elections, the company said.
“We are at one of the most challenging yet opportunity-rich times in our history,” Dennis Muilenburg, president and CEO of Boeing’s defense segment, said in a statement. “While funding for the U.S. Department of Defense is under extreme pressure, we’re innovating and expanding our core, in the U.S. and around the globe, to sustain and grow our business.”
Boeing said that its ongoing affordability initiatives have allowed it to invest in new technologies and systems to enable future growth, including the Phantom Eye hydrogen-powered unmanned airborne system, the 702SP small platform satellite, the Maritime Surveillance Aircraft, and a number of international programs.
The consolidations, which go into effect on Jan. 1, 2013, include the merger of four organizations within the Boeing Military Aircraft (BMA) division into three. The Mobility organization will merge with the Surveillance and Engagement organization to create the new Mobility, Surveillance & Engagement division within BMA. That division will include the C-17 transport and KC-46 Tanker programs.
The Chinook helicopter and V-22 tilt-rotor programs that are part of the current Mobility organization will transfer to the new Vertical Lift organization within BMA, and will also include the Apache and AH-6 rotorcraft programs that are currently part of the Global Strike division within BMA.
Boeing also says that within BMA its Missiles and Unmanned Airborne Systems division will be eliminated so that weapons programs such as the Joint Direct Attack Munition, Small Diameter Bomb, and Harpoon will be reassigned to Global Strike.
Unmanned systems such as ScanEagle, Hummingbird and Unmanned Little Bird will continue to report directly to BMA President Chris Chadwick, although functional support such as finance and human resources will be shared with other BMA organizations to improve affordability.
In the Network & Space Systems (N&SS) division, a sister organization to BMA, the Electronic & Mission Systems and Information Solutions divisions will merge into a new Electronic & Information Solutions division. The Space & Intelligence Systems, Space Exploration and Strategic Missiles & Defense Systems organizations within N&SS are unaffected by the realignment.
The defense business realignment within Boeing will be accompanied by executive changes as well. Leanne Caret, who is vice president of H-47 within BMA’s Mobility division, will lead the Vertical Lift Division within BMA.
Jean Chamberlin, who currently oversees the Mobility division, will become vice president and general manager for the Program Management function in Boeing’s defense segment. Nan Bouchard, who currently runs the Program Management function, will now lead the C-17 program and the consolidation of facilities in Southern California.
Shelley Lavender, who heads Global Strike, will become vice president and general manager for Integrated Logistics within the Global Services & Support business unit of the defense segment. Lavender will oversee the defense segment’s performance-based logistics portfolio as well as Boeing Defence Australia and Boeing Defence UK.
In other personnel moves, Ralph Meoni, who currently oversees the Electronic & Mission Systems organization, will lead the new Electronic & Information Solutions division. Tim Peters, who leads the Surveillance & Engagement organization, will oversee the Mobility, Surveillance & Engagement division.
Debbie Rub, who manages Boeing’s F/A-18E/F Super Hornet and EA-18G Growler programs, along with the F-15 and missile programs, and unmanned systems programs, will become the head of the Global Strike division.