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Boeing revamps ailing defence business

Boeing has recorded USD6.9 billion in earnings charges on its KC-46 tanker programme. (US Air Force)

Boeing is giving its Defense, Space & Security (BDS) business a facelift to try to improve the troubled unit's financial performance.

The US aerospace manufacturer announced on 17 November that BDS has consolidated its eight divisions into four to simplify its organisation and boost internal collaboration.

The new Air Dominance division includes F-15 and F/A-18 fighters, the T-7A Red Hawk training jet, and the MQ-25 Stingray and MQ-28 Ghost Bat unmanned aircraft. The new Mobility, Surveillance & Bombers division contains the KC-46A Pegasus tanker, the P-8 maritime patrol aircraft, and the VC-25B Air Force One presidential aircraft replacement programme.

The other new divisions are Space, Intelligence & Weapon Systems, which includes satellites, munitions, the Insitu unmanned aircraft subsidiary, and Vertical Lift.

The changes represent the first reorganisation that BDS has undertaken since Ted Colbert became its president and CEO in April. โ€œThese are necessary steps to put BDS on the path to stronger, profitable growth,โ€ Colbert said.

BDS sustained a USD2.8 billion operating loss in the third quarter (Q3) of 2022 fuelled by problems in five fixed-price development programmes, including the KC-46 and VC-25B, which took earnings charges of USD1.2 billion and USD766 million, respectively, in Q3. The long-struggling KC-46 has recorded a total of USD6.9 billion in charges, more than the other four fixed-price programmes combined.

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