Wednesday, November 7, 2012

Boeing shakes up defense business, cuts management jobs


Boeing Co said Wednesday it will restructure its defense, space and security business and cut 30 percent of management jobs from 2010 levels as part of a cost-cutting drive.
Boeing, the Pentagon's second-largest supplier, said it also will close some facilities in California and consolidate several business units in an effort to trim $1.6 billion in costs by the end of 2015, on top of $2.2 billion in reductions achieved since 2010.
"We are raising the bar higher because our market challenges and opportunities require it, and our customers' needs demand it," Dennis Muilenburg, chief executive of Boeing Defense, Space & Security, told employees in a message obtained by Reuters and confirmed by Boeing.
He said the total savings of $4 billion would make the company healthier and better able to deal with an increasingly complex and challenging marketplace.
"Even with the uncertainty ahead of us, we are charting a positive course, and we are committed to excellence, execution and investment," Muilenburg said. "I like Boeing's competitive position and our approach - facing into it aggressively and with a sense of productive urgency - and not 'hunkering down.'"
The sweeping measures come as all U.S. weapons makers are under pressure to cut costs and preserve profit margins amid dwindling defense spending in the U.S.
Boeing shares rose on news of the restructuring. Early in the day, the stock was down as much as $2.27, or 3.2 percent, at $69.31, partly on concern about dwindling defense spending following President Barack Obama's re-election. But after the news that Boeing would restructure its defense division to cut costs, the stock was trading at $70.15, still down $1.43 for the day, but off its earlier lows.

Read more: http://www.reuters.com/article/2012/11/07/us-boeing-defense-restructuring-idUSBRE8A61Z320121107

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