Boeing to Restructure Defense Division

Thirty percent fewer executive positions since 2010 along with other cuts reflect the realities of defense contracting today.

A number of news outlets on November 8 reported that Boeing was restructuring its Boeing Defense Systems (BDS). The reporting was prompted by an announcement by the company November 7 that it was rotating executives in its Defense, Space, and Security unit that included the statement “… By the end of 2012, BDS expects to have 30% fewer executive positions than in 2010.” Reporting from around the country indicated that this move was going to affect more than executive positions and was far more than re-arranging who sits where.


USA Today (11/7) reports “The shake-up includes disbanding the Missiles and Unmanned Airborne Systems division as of Jan. 1. That unit makes things like cruise missiles and drones that have been in high demand but which are not needed as much as the wars in Iraq and Afghanistan have wound down.” The article reports that “two years ago, Boeing's defense business employed 66,300 people. It's down to 60,500 now, a drop of almost 9%.” Boeing Spokesman Todd Blecher is quoted as saying, “Some workers have gone to Boeing's commercial airplanes side. Employment there has jumped from 80,000 at the beginning of this year to 85,000 now.”


The Wichita (KS) Business Journal (11/8, Barr) reports Boeing “plans to cut 10% of the management positions at its Hazelwood, MO-based Boeing Defense, Space and Security (BDS) unit by the end of 2012, as part of an effort to cut $1.6 billion in costs from the unit beginning next year through 2015.”


Reuters (11/7) reports the cuts are part of a major restructuring that includes reducing BDS divisions from 13 to 10." Boeing will close some facilities in California as part of a far-reaching plan to cut costs amid declining US defense spending. Dennis Muilenburg of Boeing Defense, Space & Security said in a memo to employees, "We are raising the bar higher because our market challenges and opportunities require it, and our customers' needs demand it. Even with the uncertainty ahead of us, we are charting a positive course, and we are committed to excellence, execution and investment.” He said the total savings would reach $4 billion.


The Dayton (OH) Daily News (11/8) reports Blecher said the job cuts "weren't expected to have an immediate impact on workers in Dayton or Ohio. The aerospace giant employs about 600 workers in the state, he said." The report notes that the Boeing Guidance Repair Center in Heath "is a key worksite center in Ohio, while company employees work with NASA at the Glenn Research Center in Cleveland on the next generation Space Launch System."


Also covering the story are the Seattle Times (11/8, Gates), which noted Boeing’s “defense operations in the Puget Sound region remain ‘very robust,’ particularly the P-8 anti-submarine plane and the Air Force KC-46 refueling tanker, said Boeing spokesman Todd Blecher.” Muilenberg is quoted as saying “the defense division wants to reduce its management costs by a further 10 percent by the end of next year, reducing the ratio of managers to non-managers to 12.5 to 1, from 9.7 to 1 today.” Blecher said Boeing is “looking at management levels below the executive ranks” for the next round of reductions.


Other reporting included Aviation Week (11/8) and other media sources.

Details of the November 7 Boeing press release included specific assignments, effective Jan. 1:

• Nan Bouchard will be vice president/general manager (VP/GM) of the C-17 program and Southern California consolidation. She is now VP of the BDS Program Management function.
• Leanne Caret will be VP/GM of a consolidated Vertical Lift division within the BDS Boeing Military Aircraft (BMA) business unit, managing the AH-64 Apache as well as the H-47 Chinook and V-22 Osprey programs. Caret is now vice president of H-47 within BMA's Mobility division.
• Jean Chamberlin will be VP/GM of the BDS Program Management function. She currently oversees the Mobility division, which today includes the C-17, KC-46 Tanker, H-47 and V-22.
• Shelley Lavender will be VP/GM, Integrated Logistics, within the BDS Global Services & Support business unit. She will oversee a broad performance-based logistics portfolio as well as Boeing Defence Australia and Boeing Defence UK. Lavender currently is VP/GM of Global Strike for BMA.
• Ralph Meoni will be VP/GM of a new Electronic & Information Solutions division within the BDS Network & Space Systems business unit. That consolidates his current Electronic & Mission Systems division with the Information Solutions division.
• Tim Peters will be VP/GM of a new consolidated Mobility, Surveillance & Engagement division of BMA. That will include the C-17, KC-46, P-8 and Airborne Early Warning & Control programs. He now is VP/GM for BMA's Surveillance and Engagement division.
• Debbie Rub will be VP/GM of BMA's Global Strike division, managing the F/A-18E/F Super Hornet and EA-18G Growler programs, along with the F-15 and missile programs she currently manages.
• Rub also currently oversees unmanned systems programs. Given the importance of these, their management will continue reporting to BMA President Chris Chadwick. However, to maximize affordability, their functional support will be shared with other BMA organizations.