Boeing Reorganizes Defense Division After Third-Quarter Losses

Credit: Boeing

Boeing’s Defense, Space and Security (BDS) division announced an organizational streamlining on Nov. 17 as the $26.5 billion business unit seeks a return to growth and to curtail mounting losses on fixed-price development programs.

Eight divisions will be consolidated into four units to manage the company’s operations in space, weapons, fighters, bombers, surveillance aircraft and rotorcraft, the company said. 

“These changes will help accelerate operational discipline and program quality and performance, while stabilizing our development and production programs,” said Ted Colbert, BDS chief executive officer. “These are necessary steps to put BDS on the path to stronger, profitable growth.” 

That means a myriad of BDS programs will be divided between new divisions called Vertical Lift; Mobility, Surveillance & Bombers; Space, Intelligence and Weapon Systems and Air Dominance. 

Steve Nordlund will manage Air Dominance, which includes classified programs, the F/A-18, F-15, T-7, MQ-25, MQ-28 and the non-space portfolio of Phantom Works. 

Kay Sears will lead the Space, Intelligence and Weapon Systems business, including Phantom Works Space and several subsidiaries, including Millennium, Insitu and Argon. Jim Chilton, however, will continue to manage space exploration and launch programs, satellites and Phantom Works Space until Feb. 4, at which point he will become a senior advisor to Colbert. 

Dan Gillian will run Mobility, Surveillance and Bombers, which includes the developmental KC-46 and VC-25B programs. 

Mark Cherry will serve as vice president and general manager for Vertical Lift. 

Meanwhile, Boeing also has consolidated several functional organizations into a single group, which are Manufacturing and Safety, Total Quality, Supply Chain and Program Management.

Finally, Boeing has appointed Steve Parker, a former executive in the Air Dominance and Vertical Lift portfolios, to be chief operating officer. 

The moves come seven months after Colbert succeeded Leanne Caret as CEO of BDS.  

Boeing also announced the restructuring three weeks after BDS reported a 20% reduction in quarterly revenues and a $2.8 billion reach-forward loss on five fixed-price development programs. Those same programs have accounted for $11.5 billion in reach-forward losses overall since 2014. 

Separately, Boeing will consolidate government services within Boeing Global Services for domestic and international customers into a single organization, which will be led by Torbjorn Sjogren. 

Steve Trimble

Steve covers military aviation, missiles and space for the Aviation Week Network, based in Washington DC.


Payback for Boeing massive underbidding policy imo.
What's going on here? Isn't Boeing Defense robbing the Treasury blind? And yet they are still losing money?
Boeing Defense was bloated and bureaucratic: fewer suits helps streamline an organization.