Calvin Biesecker
Defense Daily
With efficiencies in mind, Boeing on Tuesday said it will consolidate its defense operations over the next four years and create a new international group to put more emphasis on its growing worldwide military sales.
A spokesman for Boeing’s Defense, Space & Security segment told Defense Daily that any cost savings and potential charges associated with the consolidation are immaterial to corporate results.
That said, Boeing is expecting the forthcoming consolidation, which will result in a reduced real estate footprint and the elimination of 500 positions over four years, to make it leaner and more competitive.
“In order to push ourselves further and win more business, we need to make the most of our resources and talent,” Leanne Caret, president and CEO of Defense, Space & Security, said in a statement. “Making better use of our facilities will enhance efficiency and promote greater collaboration.” She also stated that “These steps will help use be a stronger partner for our customers worldwide” and “help drive our global growth.”
By the end of 2020 Boeing expects to reduce its facilities space by 4.5 million square feet. The company will close sites in El Paso, Texas, and Newington, Va., and move a number of jobs from Kent, Wash., to Tukwila, Wash.
Boeing also will move many jobs in Huntington Beach, Calif., to El Segundo, Long Beach, and Seal Beach in Southern California, with other positions moving to St. Louis and Huntsville, Ala. The job shifting will mean that Los Angeles County gains about 1,600 positions, St. Louis 500 and Huntsville about 400.
Boeing is also creating a new global operations group that aligns Boeing Defense Australia, Boeing Defense Saudi Arabia, and Boeing Defence United Kingdom. The new group will be led by David Pitchforth, who will continue to lead Boeing Defence U.K.
Pitchforth will report to Caret. The U.K., Australian and Saudi business will continue to operate independently. Currently, Boeing’s international defense subsidiaries are part of the Global Services & Support division within Defense, Space & Security.
International defense business has gone from 17 percent of overall defense segment sales in 2010 to 31 percent in 2015, Boeing said.
Boeing spokeswoman Queena Jones said by email that the company’s strategic deterrence systems work falls under a division of the Defense, Space & Security segment.
Boeing is one of the bidders for the technology maturation and risk reduction phase of the contract to build the Air Force’s Ground-Based Strategic Deterrent, which will replace the decades-old Minuteman III ICBM. The company also developed the original Minuteman missile in 1958.
Boeing is also bidding for the management and operations contract at the Department of Energy’s Sandia National Laboratories as part of a team with Battelle, the University of New Mexico, the Texas A&M University System, and the University of Texas System. This project is not part of the business impacted by the company’s defense operations consolidation, however.
“This consolidation will further streamline operations, improve productivity, enhance existing resource usage, and better focus our resources around our customers’ needs, which will enable BDS to remain competitive and win new business,” Jones said. “The impact to specific business units and programs has not been fully determined.
