Boeing restructures defense divisions, splits Phantom Works

Boeing Defense, Space and Security announced that it will restructure its defense unit following substantial losses incurred by the company due to multiple stalled projects.  

Eight of the company’s divisions will be consolidated into four, with some, such as Phantom Works, an advanced prototyping arm known for its cutting-edge developments, being split among the divisions.  

Reshuffling  

Vertical Lift appears to be the only old division to remain intact. The remaining units will be reshaped into Mobility, Surveillance & Bombers (responsible for bombers, refueling, surveillance, and some other civilian aircraft conversions such as the VC-25B presidential jet); Air Dominance (responsible for fighter jets, trainers and drones) and Space, Intelligence & Weapon Systems (responsible for all space-related systems, missiles and munitions, and undersea developments).  

Classified systems, such as, presumably, Boeing’s involvement in the Next Generation Air Dominance (NGAD) project, will now come under the company’s Air Dominance portfolio, Boeing said in a press release. 

Non-space related Phantom Works projects will now become part of the Air Dominance division, while space-related ones, as well as numerous Phantom Works subsidiaries that work on space research, will be relegated to Space, Intelligence & Weapon Systems.  

“I am confident this reorganization will drive greater and more simplified integration and collaboration across Boeing Defense, Space & Security,” Ted Colbert, the president and CEO of Boeing Defense, Space and Security, is quoted as saying in the press release. 

Financial problems 

The company reorganization comes as Boeing continues to blame significant losses accrued in 2022 on the defense sector. 

Following the disclosure of the company’s H1 2022 results, defense was named as one of the main reasons for the $1 billion loss, along with the troubled 787 program.  

Losses on fixed-price defense contracts, such as the KC46A tanker, the VC-25B presidential aircraft and the MQ-25 tanker drone, were also named as one of the reasons behind reported losses in Boeing’s Q3 2022 results. 

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