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Boeing Is Cutting 50 Executive Positions In a Restructure of Its Defense Unit

Jun 13, 2017

Boeing (ba) said on Tuesday it would restructure its defense, space and security (BDS) division into smaller units and cut about 50 executive positions, as the world's largest plane maker seeks to make its business more responsive to customers.

The business, which accounted for nearly a third of the company's total revenue in 2016, will be divided into seven units, instead of the present five. All will report to BDS Chief Executive Leanne Caret.

The executives to be cut represent a layer of middle management in between senior officials and each individual business unit.

Caret told Reuters the restructuring will make the business faster and help Boeing better anticipate the needs of defense customers.

"Customers have "a desire to move fast, and we need to be part of the solution," she said.

Boeing's defense arm sells a variety of military equipment including jet fighters, missiles and unmanned underwater vehicles to the United States and its allies.

Boeing's military aircraft business, part of the BDS unit, will be rearranged into three smaller segments: autonomous systems, strike surveillance and mobility, and vertical lift.

Autonomous systems, led by Chris Raymond, will comprise Boeing's subsidiaries Liquid Robotics, which makes the Wave Glider ocean surface robot, and Insitu unmanned aerial vehicles, among other businesses.

The strike surveillance and mobility business, led by Shelley Lavender, will include the F-15 and F/A-18 fighters and P-8 maritime patrol aircraft.

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Boeing's AH-6i, AH-64 Apache, and CH-47 Chinook helicopters will become part of the new vertical lift segment, led by David Koopersmith.

Boeing said its network and space systems business, also part of the BDS unit, will be reconstituted as space and missile systems. The business will be led by Jim Chilton.

The business makes satellites and other space and intelligence systems, and includes its joint venture operation with Lockheed Martin—United Launch Alliance.

The development, global operations, and phantom works segments will remain largely unchanged within the BDS unit, the company said.

Boeing is aggressively building its services businesses to capture new revenue and lift profit margins from high single digits to mid-teens by 2020.

Chief Executive Dennis Muilenburg established a services business unit earlier this year that combines commercial aircraft and defense services.

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