Boeing reshuffled defense with eye towards increased aerospace presence, CEO says

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WASHINGTON — The CEO of Boeing Defense, Space, and Security said that the goal of reshuffling the company’s upper management is to streamline operations and work more closely with the U.S. government and other customers.

Leanne Caret, who took over as CEO in March 2016, said the move follows a “banner year in 2016” and “literally was about taking out a layer of executive management, which is what we’ve done, flattening the organization, and elevating some programs so that they’re direct reports to me.”

Boeing announced June 13 that it was eliminating nearly 50 executive positions and would break up its two current units, Boeing Military Aircraft and Network & Space Systems, into four smaller groups. The Space and Missile Systems unit, to be led by Jim Chilton, will include the company’s current space business, such as satellite manufacturing, ISS operations and the company’s stake in United Launch Alliance.

Leanne Caret, CEO of Boeing Defense, Space, and Security. Credit: Boeing
Leanne Caret, CEO of Boeing Defense, Space, and Security. Credit: Boeing

 Speaking at a June 14 event hosted by Defense One, Caret said she wanted to conduct the reorg near the start of her tenure.

“The longer you stay in any position, your ability to make those changes only becomes harder, not easier, because it so much becomes a part of who you are,” she said.

The executive reshuffling isn’t the first change Caret made since she took over the position from Christopher Chadwick. She moved Boeing’s defense business headquarters from St. Louis, Missouri, to Arlington, Virginia, in order to be closer to the Pentagon, NASA and other Washington stakeholders.

“To listen to customers you just can’t be available when you fly in and fly back out when it’s convenient to you,” she said. “You need to be a part of the community.”

Caret said company decisions need to be conducted in a “thoughtful and pragmatic manner” as it seeks expansion of its production lines.

Revenue for the company’s space sector — formerly known as “Network and Space Systems” — was down in 2016 relative to the previous year: $7.04 billion versus $7.75 billion in 2015, according to the company’s fourth-quarter reports. (For comparison, Boeing’s largest competitor, Lockheed Martin Space Systems, had a revenue of $9.41 billion in 2016 and $9.1 billion  in 2015.)

While Boeing is a big player in the commercial and civil space sectors, one of their bigger space-related defense offerings is the Wideband Global Satcom constellation, which is set to end with the launch of the tenth satellite in 2019.

The Air Force is currently conducting an analysis of alternative (AoA) looking at the next course of action, be it purchasing additional WGS satellites or starting development of a follow-on capability. The study was originally set to conclude this December, though that end date is likely to wind up pushed into 2018.

Caret did not say what she hopes the result of the AoA will be, instead explaining that Boeing is working on finding a solution to best fit the Defense Department’s needs.

“From a defense perspective, it’s continuing to work with the customer on what they want,” she said.

In a statement emailed to SpaceNews, Enrico Attanasio, the executive director of the defense and civil programs at Boeing Satellite Systems, said that “Boeing is a major player in commercial space, government space and satellite services, and whatever the outcome of the AoA, Boeing has the ability to assist and to deliver the architecture that will enable those missions.”

The company also has its eye on taking over the contract for the next generation of the Global Positioning System: GPS 3.

Lockheed Martin is under contract to supply the first 10 satellites in the constellation, but development delays with the satellites and related ground control system have led the Air Force to indicate they’ll recompete the next planned 22. Boeing already runs part of the existing constellation, mainly the GPS 2A and 2F satellites.