(Adds comments by Boeing executive, background on
June 13 Boeing Co 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
Caret told Reuters the restructuring will make the business
faster and help Boeing better anticipate the needs of defense
"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.
Boeing's AH-6i, AH-64 Apache, and CH-47 Chinook helicopters
will become part of the new vertical lift segment, led by David
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 Corp - United Launch Alliance.
The development, global operations, and phantom works
segments will remain largely unchanged within the BDS unit, the
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.
(Reporting by Mike Stone in Washington and Ankit Ajmera in
Bengaluru; Editing by Arun Koyyur and Matthew Lewis)