Slowed Defense Spending Prompts Boeing Military Aircraft Reorganization

Boeing has consolidated its military aircraft business into four divisions from six, as part of a rationalization process prompted by slowed defense spending. Two of the previous divisions are amalgamated into a single missiles and unmanned airborne systems division based in St. Charles, Mo., while the current rotorcraft division is split. The attack helicopter business, centered on the AH-64 Apache, joins the fighter business in the global strike division (headquartered at St. Louis), while transport helicopters, led by the CH-47 Chinook, now join tanker and transport aircraft in the mobility division (Ridley Park, Pa.). The fourth entity is surveillance and engagement in Seattle. These changes take effect on October 1.

Boeing’s restructuring comes in the wake of a July Pentagon announcement that purchases of defense equipment over the next five years could be slashed by up to $60 billion. According to Boeing Military Aircraft (BMA) president Chris Chadwick, “This new structure supports BMA’s progression from a product-based business to a capabilities-based business, focusing on supporting our customers in the United States and increasingly important international markets. It is consistent with initiatives under way throughout the entire Boeing defense business that will allow us to remain competitive and grow.”

The restructuring allows Boeing Military Aircraft to shed around 10 percent of its executive positions, with further cuts expected at other levels in the coming months.