By David Shepardson and Tim Hepher
(Reuters) -Boeing Co has appointed a senior troubleshooter to help turn around loss-making programs at its Defense, Space & Security (BDS) division in what some sources view as a potential template for future efforts to fix wider industrial woes.
Steve Parker, head of Boeing (NYSE:)’s bomber and fighter programs as well as its St Louis defense plants, has been promoted to the new role of chief operating officer for the division, which makes up almost half of Boeing revenues, industry sources said.
A Boeing spokesperson confirmed last week’s appointment, which has not been announced publicly.
Parker will report to Ted Colbert, who was appointed chief executive officer of BDS earlier this year after a career mainly in IT services followed by the helm of Boeing Global Services, which provides parts and engineering for airlines and military.
The move to strengthen industrial leadership comes after delays and cost overruns blighted a series of long-term projects for which Boeing is locked in to a fixed price.
Investors and customers have expressed concerns over development and production delays across the company at a time when Boeing is digging itself out of a crippling safety crisis over the 737 MAX jetliner and $45 billion of net debt.
Chief Financial Officer Brian West said last month fixed-price defense contracts were being “knocked around” by supply chain problems, inflation and labor shortages.
In the second quarter, Boeing took $400 million in charges on programs including the MQ-25 refueling drone for the U.S. Navy and its Starliner commercial crew project for NASA.
It also faces losses on its KC-46A tanker and T-7A trainer programs for the U.S. Air Force and on new Air Force One jets.
BROAD APPROACH
Addressing the nuts and bolts of BDS is significant not only because of immediate pressures but because its work on advanced new design methods is expected to shape future civil jetliner programs at Boeing Commercial Airplanes (BCA).
The Boeing spokesperson said there were no plans to make further COO appointments.
But two people familiar with the matter said it was not excluded that Parker’s new operational role might eventually open the door to similar functions at other businesses.
“It is not an isolated approach,” one of the people said.
In 2006, incoming BCA chief Scott Carson appointed Jim Jamieson chief operating officer of the planemaking unit – a wide brief giving him effective oversight of jet manufacturing and development until his retirement about 18 months later.
Jamieson’s manufacturing muscle was seen at the time as a counterweight to Carson’s sales and financial background after the departure of revered jetliner chief Alan Mulally to Ford.
Those changes came just as Boeing was trying to juggle changes in manufacturing with the development of the Boeing 787, while still bearing the wounds of a 1997 production crisis.
Boeing is once again involved in a radical overhaul of design and manufacturing methods, using digital modelling rooted in the development of the T-7A military trainer.
Boeing has deferred a possible decision on launching a pair of new civil jets by around two years amid debts and questions over the timing of new production systems and engine technology.
Airbus has long had a chief operating officer at its main planemaking arm, though in practice it is more than a divisional role as the defense and helicopter units slot in underneath.
