Boeing to revamp defense segment, create smaller business units in agility push

Boeing is restructuring its $29 billion defense segment and breaking up two of its divisions into smaller pieces in a push toward more agility.

Boeing will break up two divisions within its $29 billion Defense, Space & Security segment into four smaller organizations as the airplane maker seeks to make its business more agile and competitive.

The restructuring will take effect on July 1 and eliminate one layer of management at around 50 executive-level job cuts, Boeing said Tuesday. This move comes nearly six months after the BDS segment relocated its headquarters to Arlington, Va. from its longtime home of St. Louis for greater proximity with government agencies.

Caret took charge of the Boeing defense segment in February 2016 in the wake of the Air Force's late 2015 award of the long-awaited Long Range Strike Bomber contract to rival Northrop Grumman. This move comes as Boeing prepares to compete for large defense contracts such as the Air Force T-X trainer, for which which it is partnered with Saab against a team of Lockheed Martin and Korea Aerospace Industries.

In this realignment, the military aircraft and network and space systems businesses will evolve into four smaller units: autonomous systems; space and missile systems; strike, surveillance and mobility; and vertical lift.

Autonomous systems, led by Chris Raymond, will house the airplane maker's unmanned aerial and underwater portfolio that includes the Insitu and Liquid Robotics subsidiaries. This unit will also oversee other electronic and information systems.

Space and missile systems, led by Jim Chilton, will have Boeing's share of its United Launch Alliance venture with Lockheed Martin, the International Space Station and other missile and weapons programs.

Strike, surveillance and mobility -- led by Shelley Lavender -- will take on the bulk of Boeing's fighter jet programs currently in the military aircraft division. The new vertical lift unit to be led by David Koopersmith will handle the helicopter programs.

Lavender currently leads the military aircraft division as president and Chilton holds the same role for network and space systems.

Boeing said the BDS Phantom Works advanced research division will remain unchanged as well the development and global operations units.

BDS represents roughly one-third of Boeing's total sales. The company expects the defense business to post $28 billion-$29 billion in revenue this year at a rough 3.4-percent decline from the prior year period.

Revenue in Military Aircraft fell 6.7 percent last year to $12.5 billion and Network and Space Systems declined 9 percent to $7 billion. 


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